Essays on environmental economics

This dissertation comprises two essays examining how institutions shape incentives for forest disturbance in the Brazilian Amazon. The first essay investigates whether uncertainty about property rights, proxied by overlapping registrations in the Rural Environmental Registry (CAR), affects deforestation. Exploiting variation in the timing of overlapping registrations across rural properties in Acre, Pará, and Mato Grosso within a staggered difference-in-differences framework, I find that the emergence of an overlapping registration leads to a statistically significant increase in deforestation — approximately 30.6% relative to the pre-treatment mean of the never-treated group. The effect is delayed, persistent, and concentrated among small rural properties subject to a differentiated legal regime under Brazil’s Forest Code, consistent with a deterrence failure mechanism. An extension to forest fire activity reveals a negative and significant effect, interpreted as evidence that tenure uncertainty reshapes the mode of forest conversion: landholders substitute fire-based clearing with clear-cut deforestation as a strategy to assert territorial control over disputed land. The second essay examines whether monitoring-based enforcement affected forest degradation in the Brazilian Amazon during 2007–2016, extending the empirical framework of Assunção et al. (2023) to two forest degradation measures: canopy disturbance from selective logging and forest fire activity within standing forest. Using cloud cover over monitored areas as an instrumental variable for enforcement, I find that enforcement significantly reduced canopy disturbance (with an estimated 10.1% reduction per additional enforcement fine) but had no detectable effect on forest fire activity. A cost-benefit analysis shows that accounting for avoided forest degradation reduces the break-even carbon price of the monitoring-and-enforcement regime from USD 0.69/tCO2 (deforestation only) to USD 0.42/tCO2, indicating that standard evaluations based solely on deforestation understate the climate benefits of satellite-based environmental governance. Together, the two essays underscore that institutional imperfections (tenure insecurity and enforcement asymmetries) shape both the level and the form of forest disturbance, and that comprehensive governance assessments require monitoring frameworks that track multiple margins of forest loss simultaneously.