Fiscal policy and deforestation
We investigate the impact of fiscal policy on deforestation in the Brazilian Amazon and Atlantic Forests. We first construct a theoretical dynamic model to examine the effects of government spending and tax revenues on the environment. We then run a VAR model to test the implications of fiscal polic...
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| Format: | Article |
| Language: | English |
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Elsevier
2024-12-01
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| Series: | Sustainable Futures |
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| Online Access: | http://www.sciencedirect.com/science/article/pii/S2666188824001540 |
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| author | Luccas Assis Attílio João Ricardo Faria André Rossi de Oliveira |
| author_facet | Luccas Assis Attílio João Ricardo Faria André Rossi de Oliveira |
| author_sort | Luccas Assis Attílio |
| collection | DOAJ |
| description | We investigate the impact of fiscal policy on deforestation in the Brazilian Amazon and Atlantic Forests. We first construct a theoretical dynamic model to examine the effects of government spending and tax revenues on the environment. We then run a VAR model to test the implications of fiscal policies on Brazilian deforestation, using data from June 1998 to May 2022. Our results suggest that government expenditures reduce deforestation in both forests. Moreover, deficit-inducing and balanced-budget fiscal policy shocks have dampening effects on deforestation, with the latter being more effective. This is good news for developing countries like Brazil. They can combat deforestation through fiscal policy in a way that doesn't worsen their fiscal situation. Our findings were unaltered when we considered the effects of a simulated fiscal policy based on spending on public goods only (social assistance, science and technology, defense, education, health, national security, and transportation). |
| format | Article |
| id | doaj-art-da876404f5fe487f8480254aa40040f8 |
| institution | OA Journals |
| issn | 2666-1888 |
| language | English |
| publishDate | 2024-12-01 |
| publisher | Elsevier |
| record_format | Article |
| series | Sustainable Futures |
| spelling | doaj-art-da876404f5fe487f8480254aa40040f82025-08-20T02:36:59ZengElsevierSustainable Futures2666-18882024-12-01810030510.1016/j.sftr.2024.100305Fiscal policy and deforestationLuccas Assis Attílio0João Ricardo Faria1André Rossi de Oliveira2Federal University of Ouro Preto, Rua do Catete, 166, Centro, Mariana, MG 35420-000, Brazil; Corresponding author.Florida Atlantic University, Department of Economics, OD 201H, College of Business, 777 Glades Road, Boca Raton, FL 33431, United StatesUtah Valley University, Finance and Economics Department, KB 421F, 800 W University Pkwy, Orem, UT 84058, United StatesWe investigate the impact of fiscal policy on deforestation in the Brazilian Amazon and Atlantic Forests. We first construct a theoretical dynamic model to examine the effects of government spending and tax revenues on the environment. We then run a VAR model to test the implications of fiscal policies on Brazilian deforestation, using data from June 1998 to May 2022. Our results suggest that government expenditures reduce deforestation in both forests. Moreover, deficit-inducing and balanced-budget fiscal policy shocks have dampening effects on deforestation, with the latter being more effective. This is good news for developing countries like Brazil. They can combat deforestation through fiscal policy in a way that doesn't worsen their fiscal situation. Our findings were unaltered when we considered the effects of a simulated fiscal policy based on spending on public goods only (social assistance, science and technology, defense, education, health, national security, and transportation).http://www.sciencedirect.com/science/article/pii/S2666188824001540E62Q23Q28 |
| spellingShingle | Luccas Assis Attílio João Ricardo Faria André Rossi de Oliveira Fiscal policy and deforestation Sustainable Futures E62 Q23 Q28 |
| title | Fiscal policy and deforestation |
| title_full | Fiscal policy and deforestation |
| title_fullStr | Fiscal policy and deforestation |
| title_full_unstemmed | Fiscal policy and deforestation |
| title_short | Fiscal policy and deforestation |
| title_sort | fiscal policy and deforestation |
| topic | E62 Q23 Q28 |
| url | http://www.sciencedirect.com/science/article/pii/S2666188824001540 |
| work_keys_str_mv | AT luccasassisattilio fiscalpolicyanddeforestation AT joaoricardofaria fiscalpolicyanddeforestation AT andrerossideoliveira fiscalpolicyanddeforestation |