Do protected areas hamper economic development of the Amazon region? An analysis of the relationship between protected areas and the economic growth of Brazilian Amazon municipalities

Abstract

The Brazilian Amazon harbours 70 % of the world’s tropical forests and is essential to the country’s economy because it maintains biodiversity, sustains the livelihoods of the indigenous people and local communities, and provides ecosystem services such as water production, soil stabilization, flood prevention, and climate regulation. In the last three decades, the Brazilian government has established a regional protected area (PA) network that currently covers approximately 48 % of the region. Despite their importance, some sectors of the Brazilian society have argued that the expansion of the PAs across the region hampers the local economic development, because they make less area available for non-forest economic activities such as large-scale agriculture, mining, and power generation. In this study, we analysed the relationship between local economic growth and PA coverage in 516 municipalities in the Brazilian Amazon from 2004 to 2014. We modelled the impact of the coverage of the three types of PAs (strictly-protected, multiple-use, and indigenous lands) on the (i) compound annual growth rate (CAGR) of the real gross domestic product per capita (GDP per capita), and (ii) real gross value added per capita (GVA per capita) of the agriculture, industry, services, and government sectors in each municipality. The models also considered the following control variables at the municipal level: area, age, per capita GPD in 2004 (or per capita GVAs in 2004), population growth rate between 2004 and 2014, education index, deforested area outside PA per capita, deforested area inside PA per capita, degraded area outside PA per capita, degraded area inside PA per capita, and presence of illegal mining within PA. We applied spatial Durbin error models (SDEM) to analyse the direct, indirect, and total impacts of the PAs on the local economic growth. We did not find a statistically significant relationship between the local economic growth and PA coverage in any of the three PA groups evaluated. Only the total impact of the GVA per capita of the industry was negatively correlated with the coverage of the strictly-protected PAs. Our findings do not support the arguments used by some interest groups of the Brazilian society that the social and environmental gains generated through the expansion of PAs across the region constrain the overall local economic growth.