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Protecting and restoring natural ecosystems are critical cost-effective strategies to fight global climate change. Brazil holds vast amounts of degraded lands in tropical regions and, thus, has great potential to contribute to restoration-based carbon sequestration. However, by design, Brazil’s innovative and successful satellite-based monitoring system focuses on combating primary forest loss, and does not detect the clearing of secondary vegetation. In this paper, we document the substantial growth in the area occupied by secondary vegetation in the Brazilian Amazon during 2004-2014, and investigate the extent to which that regeneration resulted from unanticipated spillover effects of law enforcement policy. Using large and rich pixel-level data over that time period, we nd that increasing (by one standard deviation)the intensity of enforcement in a pixel’s neighborhood increases regenerated area in that pixel by 6%. Counterfactual exercises suggest that improvements to the existing monitoring system could further contribute by augmenting total secondary vegetation cover by nearly 300 thousand hectares. This is the first study documenting positive spillover effects of command-and-control environmental policies, suggesting that such policies can have greater impacts onsocial welfare than previously thought.

Suggested citation: Assunção, Juliano, Clarissa Gandour, and Eduardo Souza-Rodrigues. The Forest Awakens: Amazon Regeneration and Policy Spillover. Working Paper 002. Rio de Janeiro: Climate Policy Initiative, 2019.