Friday, September 4, 2009

Rainforest, cows and cash.

Here is an interesting article from the NY Times regarding deforestation in Brazil, and an attempt to mitigate deforestation by paying landowners not to cut.

Basic econ here: costs and benefits. How does this story fit in with our discussion of externalities?

2 comments:

Anonymous said...

This plan has one main problem, throwing money at the farmers not to clear land, makes it so that there is constant paying off of the farmers not to destroy the next year. It would be like sitting there and paying some one not to talk for the next ten minutes. You have the silence for ten minutes then they are perfectly capable of talking the second that ten minutes is up. If you want silence then you have to pay them again. Others see what you are doing, come by and asked to get paid to do the same. Eventually your resources are drained.
If the countries really wanted to address the problem they could buy the property rights to the land. With property rights comes the ability to preserve that land for their interest.
On an aside note, tropical farmland is quickly depleted as the rains leach all the nutrients from the soil rather quickly, the real richness and fertility of the land is held inside the life there.
-Kyle Dexheimer

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