Optimal transport network under environmental constraints

Spatial and environmental questions are often studied separately. Transport networks offer a natural setting in which economic development interacts with environmental constraints such as forests and protected areas. This paper studies whether environmental constraints change an optimal allocation of a transport infrastructure planning problem. We apply the optimal transport network framework of Fajgelbaum and Schaal (2020) to Brazil, where agricultural frontiers are close to the Amazon Rainforest. We impose protected-areas restrictions to the network and combine them with a re-calibration of transport and construction costs. The resulting network avoids broad expansion into the Amazon, not mainly because protected areas mechanically block links, but because Brazilian cost estimates make forest corridors expensive to upgrade, especially where rainfall is high. Investment instead concentrates in a few regional clusters, where the planner reinforces many neighboring links rather than building long corridors.