Estimating the costs of environmental protection in Brazil

Abstract

In this paper an effort is made to estimate the amounts of money the government of the state of Sao Paulo, Brazil, must transfer to counties in which environmentally protected areas of any sort have been established by the state. A methodology to estimate these transfers is proposed, based on the potential loss of production in the protected areas, and the corresponding amounts are calculated. The results indicate that protecting 7.68% of the state's territory will cause a maximum decrease in its GDP of 0.05%. The estimation of monetary values for environmental costs is of interest because it provides a basis for judgement among different environmental protection alternatives and between these and other investment projects.