Araguaia biodiversity corridor cost benefit analysis: Large scale restoration and sustainable agribusiness in Amazon and Cerrado

• Published in: Land use policy 2024-06, Vol.141, p.107122, Article 107122
• Main Authors: Lucchesi, Andrea, Khanna, Madhu, Pereda, Paula C., Ussami, Keyi A., Ruggiero, Patricia G.C., Dornelas, Victor S., Lallement, Tess
• Format: Article
• Language: English
• Subjects: Amazon and Cerrado recovery; Avoided soil erosion and replacement cost; Carbon capture and social cost of carbon; Climate change economics; Cost benefit analysis; Ecological reforestation
• ISSN: 0264-8377; 1873-5754
• DOI: 10.1016/j.landusepol.2024.107122

Ecosystem restoration is an important tool for reducing ecosystem loss and contribute to diminish the negative impacts from deriving from climate change, but can be very costly. This paper focuses on the cost-benefit and cost-effectiveness analysis of recovering almost one million hectares of legally protected areas in the Araguaia Biodiversity Corridor (Brazil) following the Brazilian Forest code regulation. We analyze two paths for recovery, ecological and economic (including timber and agroforestry systems). We consider the direct and indirect local costs, as well as monetized environmental benefits using the social cost of carbon and avoided soil erosion. According to our estimates, in 50 years, the recovery of the Araguaia Corridor will lead to net societal benefits with either the ecological (US$ 19.8 billion) or economic (US$ 18.9 billion) pathways in all macro-regions (north, central, and south) and rural property sizes (small, medium and large). The recovery captures 262 million tCO2eq and avoids 527 million tons of soil erosion with the economic path; these estimates are 23% and 1.7% higher, respectively, when using the ecological path. Importantly, we show that the restoration activity is not carbon credit dependent on being profitable when based on the economic path proposed. Additionally, this study highlights the high profitability of agroforestry systems, especially in small farms. There are also relevant local impacts, from 12 to 38 thousand new direct jobs. Even considering a limited menu of ecosystem services (carbon and soil), we show that social benefits from the Araguaia biodiversity corridor restoration exceed its social costs, justifying the subsidization of ecosystem restoration. In this sense, land use policies can incorporate mechanisms for financial support, grants, or incentives to encourage and facilitate ecosystem restoration efforts in the region. •The recovery of the Araguaia Biodiversity Corridor indicates positive net benefit values for all regions and property sizes.•We add to the literature by showing that the recovery activity is not carbon credit-dependent to be profitable.•The agroforestry and timber systems proposed proved to be profitable and economically sustainable.•The recovery proposed presents low costs per captured tCO2eq and ton of erosion reduction.•The proposed production changes benefit landowners by allowing the compliance with the Brazilian Forest Code.