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Abstract
Brazil has committed itself to reduce its greenhouse gas (GHG) emissions by 36.1%
and 38.9% compared to projected emissions for 2020. In order to accomplish this, the
deforestation in the Amazon will have to be reduced by 80% and in the savannah
region (Cerrado) by 40% by that year. Concurrently, Brazil is the country with the
greatest potential to increase its agricultural production and contribute to the
challenge of feeding an increasing world population. Moreover, agribusiness is a key
sector of the Brazilian economy for income generation and promotion of foreign
exchange. This article discusses the economic impact of a restrictive policy of
deforestation on the agricultural and livestock sector and the national economy using
a computable general equilibrium model. The results point to low losses in GDP from
the limited deforestation scenario as compared with the baseline, but non negligible
impacts in the agricultural, livestock and food sector.