DETERring Deforestation in the Amazon: Environmental Monitoring and Law Enforcement
- American Economic Journal: Applied Economics (Forthcoming)
We study Brazil's recent use of satellite technology to overcome
law enforcement shortcomings resulting from weak institutional
environments. DETER is a system that processes satellite
imagery and issues near-real-time deforestation alerts to target
environmental enforcement in the Amazon. We propose a
novel instrumental variable approach for estimating enforcement's
impact on deforestation. Clouds limiting DETER's capacity to
detect clearings serve as a source of exogenous variation for
the presence of environmental authorities. Findings indicate
that monitoring and enforcement effectively curbed deforestation.
Results hold across several robustness checks.
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