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Estimating timber depreciation in the Brazilian Amazon

Published online by Cambridge University Press:  01 February 2000

RONALDO SEROA DA MOTTA  and
CLAUDIO A. FERRAZ DO AMARAL
RONALDO SEROA DA MOTTA
Affiliation:
Institute for Applied Economic Research Av. Presidente Antonio Carlos 51,17 andar, 20020–010, Rio de Janeiro, Brazil E-mail: seroa@ipea.gov.br
CLAUDIO A. FERRAZ DO AMARAL
Affiliation:
Santa Úrsula University Av. Presidente Antonio Carlos 51,17 andar, 20020–010, Rio de Janeiro, Brazil
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Abstract

This study estimates depreciation values for timber extraction activities in the Brazilian Amazon for 1990 and 1995. A generalized approach following Vincent and Hartwick (1997) is applied enabling us to calculate depreciation based on all three methods proposed in the literature. We also calculate Hotelling rents for timber as a whole and for mahogany alone. Apart from the expected differences in the results for each method, the results show substantially low depreciation estimates as a direct consequence of the high timber stocks and scarcity perception by economic agents due to the lack of property rights in the region. For mahogany alone we obtain substantially higher values. We conclude that if scarcity rents are not fully perceived, or they really do not exist in such huge supply conditions as our estimates may suggest, charges related to other forest services are fundamental to make environmental accounting an useful tool for planning in the Amazonian context.

Type
Research Article
Information
Environment and Development Economics , Volume 5 , Issue 1 , February 2000 , pp. 129 - 142
Copyright
© 2000 Cambridge University Press

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Footnotes

This paper is based on a report prepared for the Forestry Department at the Food and Agriculture Organisation (FAO) with the financial support of the Danish Trust Fund for Environmentally and Socially Sustainable Development and the ESSD at the World Bank. The authors wish to acknowledge the valuable research assistance of José Ricardo Brun Fausto. We are very thankful to Ives Dubé, from the FAO Forestry Department, for motivating us to undertake this study. We also thank Michael Linddal, Salah El Serafy, Steven Stone, Beatriz Castanneda and Carlos Young, as well as the managing editor and two anonymous referees for helpful comments on earlier versions of this work.