The likelihood of a water market in Brazil

The paper examines the likelihood of a water market in Brazil. The US water market, probably the oldest and most well-documented case, is initially analyzed. In the American West, water permits were transformed into property rights more than 140 years ago. However, mainly due to high transaction costs, only recently the trading became regular. Analyzing the Brazilian case, it is clear that the country does not have the problem of water availability that the American West has. On the other hand, Brazil has poor water infrastructure. As such, more than 35% of cities had no water for months in 2012, although the country possesses 12% of the world’s fresh water. To implement a water market, the first step would be to change the water diversion entitlements in keeping with the property rights. It is argued that this would be an opportunity to force users to invest in water infrastructure. Thus, a model is built to study the conditions under which the market would lead to a Pareto superior situation. Keywords: water right, water market, Brazilian water law.

The impacts of climate changes on agriculture production and adaptative strategies for family farmers in the Brazilian Sertão

This study analyzes the impacts of climate conditions on the agricultural production and how adaptative strategies may alleviate such effects. First, it analyzes the dynamics of climate variables between 1974 and 2013 in the semi-arid region of the State of Bahia, the largest and most populous State of the Sertão. Secondly, based on a panel with climatic and production data, it assesses the 1 Paper submitted to the 44o Encontro Nacional de Economia – Foz do Iguaçu, December 13th to 16th , 2016. 2 ex-post impacts of these climate variables on the agricultural production of the municipalities in the region. Thirdly, it estimates the relation between several adaptive strategies and the family farmers’ production, based on microdata of the Brazilian Agricultural Census for small farmers in the region. The study evaluates four main agricultural productions: milk, cattle, goat, sheep and corn. The final and general aim of this study is to discuss the effectiveness of strategies for small farmers which would create climate resilience and attenuate the negative impacts of climate change on the agricultural production of this vulnerable region.

Spillover effects of blacklisting policy in the Brazilian Amazon

We analyse the effects of the Priority Municipalities List, that indicates the primary targets of environmental police monitoring, on deforestation of municipalities in the neighbourhood of the listed. We argue that being a neighbour to a priority municipality causes an exogenous variation in environmental authorities’ presence, and use a difference-in-differences estimator to determine the impact of such presence on deforestation. As an innovative feature, we introduce a spatial version of this estimator to correct spatial dependence. Our estimations show that the net effect of treatment is a decrease in deforestation of 15% to 36%. This result is robust to changes in the measure of deforestation as well as in the neighbourhood criteria. Estimates also indicate that effects get weaker the greater the distance to the priority municipality

Predicting Amazon fires for policy making

Wildfires are one of the main threats to the conservation and development of Brazilian Amazon. To address them, policy has relied mainly on fire brigades whose effectiveness crucially depends on correct geographical positioning. Seeking to contribute for better policy planning, the paper focuses on identifying the main predictors of fires at municipal level. An unparalleled panel dataset is built from satellite imagery and socioeconomic data covering the years of 2008, 2010 and 2012. Methodological contributions are made with simple procedures for model selection and robustness assessment. Of the 41 potential predictors, only 9 were significant with tolerable uncertainty, comprising deforestation, pastureland, forest, indigenous lands, temperature and soil texture.

Policies for reduction of greenhouse gases emission and their costs and opportunities for the Brazilian industry

Recent Brazilian industrial policies attempt to accelerate the industrial growth and, among other goals, develop a more efficient industry in terms of energy use. However, typical mechanisms of mitigation policies, such as carbon pricing, can act in a counterproductive way against the incentives of the industrial policy. In this paper we fill a gap in Brazilian literature, estimating the impact of policies to reduce emissions in Brazilian industry, imposing caps to the emissions (CAP scenario) or carbon markets (CAP-ANDTRADE scenario). The results show the importance of sectoral considerations and the design of mechanisms in the formulation of mitigation policies.

Impacts of Changes to the Brazilian Electricity Matrix

This study seeks to understand the impact of different scenarios of electricity generation on an economy, employment and GHG emissions in the country. These scenarios were developed by the Energy Scenarios Platform (PCE), organized by the Avina Foundation, which selected four scenarios of nationally renowned institutions to elaborate long-term national electricity planning, based on a set of premises and common information. Scenarios are geared towards goal setting. 3. The main objective is therefore to analyze their priorities as their respective advantages and disadvantages with the main objective of their macroeconomic, social and environmental impacts.


Leveling Up?An Inter-Neighborhood Experiment on Parochialism and the Efficiency of Multi-level Public Goods Provision

Many public goods can be provided at different spatial levels. Evidence from social identity theory and in-group favoritism raises the possibility that where higher-level provision is more efficient, subjects’ narrow concern for local outcomes (parochialism) could harm efficiency. Building on the experimental paradigm of multi-level public good games and the ‘neighborhood attachment’ concept, we conduct an artefactual field experiment with 600 participants in a setting conducive to parochial behavior. We find evidence for parochialism, but contrary to our hypothesis, parochialism does not interfere with efficiency: The average subject responds to a change in relative productivities at the local and regional level in the same way, whether aware of their neighbors’ presence in the small group or not. The results even hold for subjects with abovemedian neighborhood attachment and subjects primed on neighborhood attachment.

From Rivers to Roads: Spatial Mismatch and Inequality of Opportunity in Urban Labor Markets of a Megacity

The spatial mismatch between residential locations and jobs can be particularly relevant for low-skilled individuals. In this paper, we first explore such phenomenon from the perspective of the distance of the residence to the geographic concentration of jobs, and locational disadvantages of the urban form itself. Such unequal conditions in the labor market present a great challenge for the spatial sustainability of the multiple equilibria achieved simultaneously at the labor and the housing markets. We estimate the main aspects that influence wage differentials among individuals, focusing on the role of accessibility on labor market outcomes.

The Spatio-Temporal Dynamics of Ethanol/Gasoline Price Ratio in Brazil

We use a new methodology to analyze the spatio-temporal evolution of ethanol/gasoline price ratio for the end consumer in Brazil. This model allows estimating the distribution of prices throughout the Brazilian territory using a continuous space model estimated by Bayesian methods. We use data from the National Agency of Petroleum, Natural Gas and Biofuels price survey system, a weekly sample of 10\% of fuel suppliers in Brazil to estimate continuous projections of the price ratio for the entire country for the 2007-2014 period. We use this model to build an indicator of ethanol advantage throughout the Brazilian territory, and show how this advantage has been reduced after 2009.

Empirical Analysis of Scoring Auctions for Oil and Gas Leases

I study a scoring auctions implemented in Brazil to sell oil exploration rights. Differently from most sales of this kind, bidders had to submit a multi-dimensional bid that included a bonus and an exploratory program. A non-linear scoring rule determined the winner. I develop and implement a methodology to estimate the underlying primitive distribution of tract values and exploration commitment costs. Estimating the distribution of those primitives allows the evaluation of counterfactual revenues in alternative bidding schemes. I find that a first price auction would imply a 9.7% higher revenue from the sales examined, an increase in government revenue of 10.3 million U.S. dollars.

Road and Development: some empirical evidences from Brazilian experience

This paper investigates the role of infrastructure improvements, especially those related to transport network, on regional development. It aims to verify that the greater proximity to markets, by reducing transportation costs, provides greater regional development, causing urbanization and changes in local labor markets, that   leads to improvements in the living conditions of the population. We adopt an emprical strategy based on a difference-in-difference approach, taking into account four different investments in Brazilian transport. The main results show that construction of new limited access highways has contributed to the development of those municipalities directed and indirected benefited by the highway, improving well-being of those living in the countryside.

Local Socioeconomic Impacts of Brazilian Hydroelectric Power Plants

This paper estimates the short- and medium-run effects of the construction of large hydroelectric power plants (HPPs) on the economic development of Brazilian municipalities. Two main findings emerge from this analysis. First, the median impact of the construction of HPPs on the local economy is modest and follows an inverted U-shape over a five-year horizon. Second, the estimated effects display a lot of dispersion: despite the median impacts being typically small and following similar patterns, the effects on some municipalities are much more severe than in others. These results do not provide support for the view that large construction works can unequivocally spur local development.