Poor transportation infrastructure is often regarded as one of the main barriers to the acceleration of economic growth in Brazil. Due to the poor condition of most of the roads and the absence of other modes of transport, freight rates are extremely high, curbing internal trade and reducing the competitiveness of the country’s producers. As a response, the federal government has established a goal to implement a large portfolio of transportation infrastructure projects in the coming decade.

Nevertheless, this portfolio includes paving roads and building railroads in the Amazon, raising fears it might stimulate environmental degradation and increase deforestation in the world’s largest rainforest. Identifying these impacts and proposing measures to mitigate them is, therefore, critical to enable Brazil to improve its stock of transportation infrastructure in a sustainable way. However, in the current practice, Feasibility Studies (Estudos de Viabilidade Técnica, Econômica e Ambiental – EVTEA) and Environmental Impact Assessment (Estudo de Impacto Ambiental – EIA) – the two instruments that delimit the area of influence of the project – are not transparent as to the methodology used for delimiting the area of influence, especially when it comes to delimiting the indirect effects. This leads to the delimitation of areas that do not necessarily reflect all the effects that the project may cause. A clear and substantiated identification of indirect effects, monitoring, strict enforcement of the law, among other measures, can be better targeted to mitigate these risks. This would allow the country to improve its logistics infrastructure without negatively affecting the environment.

Climate Policy Initiative/Pontifical Catholic University of Rio de Janeiro (CPI/PUC-Rio) provides policymakers with a better understanding of the full impact of logistics infrastructure development. Improving transportation infrastructure has the potential to facilitate trade and increase competitiveness of Brazil’s agriculture. However, reduced transportation costs will also affect how and where agriculture is done. These are important indirect effects when evaluating logistics projects. This Whitepaper highlights the need for the logistics projects’ EVTEA and EIAs to incorporate and correctly identify the indirect effects that result from the changes in transportation costs induced by improvements. It describes how using a combination of geoprocessing tools and statistical analysis can be used to identify these impacts and provides an example of their importance.