Rafael Araujo


Assistant Professor of Economics, FGV EESP


I am an Assistant Professor of Economics at FGV EESP.

I am interested in environmental issues and their social effects.

Feel free to contact me about research, code, and data.


Estimating the Spatial Amplification of Damage Caused by Degradation in the Amazon

with Juliano Assunção and José A. Scheinkman and Marina Hirota
Proceedings of the National Academy of Sciences. Preprint

The Amazon rainforests have been undergoing unprecedented levels of human-induced disturbances. In addition to local impacts, such changes are likely to cascade following the eastern–western atmospheric flow generated by trade winds. We propose a model of spatial and temporal interactions created by this flow to estimate the spread of effects from local disturbances to downwind locations along atmospheric trajectories. The spatial component captures cascading effects propagated by neighboring regions, while the temporal component captures the persistence of local disturbances. Importantly, all these network effects can be described by a single matrix, acting as a spatial multiplier that amplifies local forest disturbances. This matrix holds practical implications for policymakers as they can use it to easily map where the damage of an initial forest disturbance is amplified and propagated to. We identify regions that are likely to cause the largest impact throughout the basin and those that are the most vulnerable to shocks caused by remote deforestation. On average, the presence of cascading effects mediated by winds in the Amazon doubles the impact of an initial damage. However, there is heterogeneity in this impact. While damage in some regions does not propagate, in others, amplification can reach 250%. Since we only account for spillovers mediated by winds, our multiplier of 2 should be seen as a lower bound.

The Value of Tropical Forests to Hydropower

Energy Economics. Preprint

Tropical forests affect rainfall on a continental scale. I develop an approach to value this ecosystem service provided by tropical forests to the energy sector using an econometric climate model that connects tropical deforestation with rainfall, hundreds or even thousands of kilometers away from the forest. As an application, I estimate the impact that Amazon deforestation has on the power generation capacity of the Teles Pires hydropower plant in Brazil, one of the ten largest plants in a country that has hydropower as its main source of energy. The decrease in energy generation is higher in the wet season, with an average decrease of 10% and 17% in extreme scenarios, amounting to a potential loss for the hydroelectric operator of USD 21 million per year. I then map the regions of the Amazon that would have the highest conservation values for the hydroelectric. The results provide evidence of the economic importance of ecosystem services of tropical forests to economic activities.

Working papers

The Effects of Transportation Infrastructure on Deforestation in the Amazon: A General Equilibrium Approach

with Juliano Assunção and Arthur Bragança
Media: VoxDev

Investments in transportation infrastructure can impact the environment beyond their immediate surroundings. We build an inter-regional trade model to estimate the general equilibrium effects of changes in infrastructure on deforestation. Using panel data on the evolution of the transportation network from Brazil and land use data in the Amazon, we estimate the model and find sizable effects of infrastructure on deforestation. Model simulations show that ignoring general equilibrium underestimates deforestation impacts by one quarter. We also show that this model can be used to evaluate the deforestation induced by individual projects, an essential input for public policies.

When Clouds Go Dry: An Integrated Model of Deforestation, Rainfall, and Agriculture

Deforestation of tropical forests affects rainfall, changing the productivity of the agricultural sector, the main driver of deforestation. This deforestation-rainfall mechanism is in effect even in regions that are thousands of kilometers away from the forest, but does it result in a sizable externality? I develop an integrated climate and land-use model to measure the externality impact that land use decisions have on agricultural productivity through changes in rainfall. As an application, I use pixel level climate data for the entire Amazon Rainforest and pixel level land use data for the Brazilian state of Mato Grosso, one of the most important agricultural hubs in the world. I then consider a counterfactual where farmers are allowed to deforest protected areas. I find that, due to the precipitation decrease resulting from deforestation, the returns of crop production decrease by 2% with some regions losing up to 8%. Tail events increase this loss of crops production in some regions to 12%.

Efficient Forestation in the Brazilian Amazon: Evidence from a Dynamic Model

with Francisco Costa and Marcelo Sant’Anna
Media: VoxDev
R&R The Review of Economic Studies

Abstract: This paper estimates the Brazilian Amazon’s carbon-efficient forestation – i.e., when farmers internalize the social cost of carbon. We propose a dynamic discrete choice model of land use and estimate it using a panel of land use and carbon stock of 5.7 billion pixels between 2008 and 2017. Business-as-usual implies an inefficient release of 44 gigatons of CO2 in the long run resulting from deforestation of an area twice the size of France. We find that small carbon taxes can mitigate a substantial part of inefficient deforestation. Only relatively larger taxes on cattle production would achieve a similar effect.

Going Viral: Public Attention and Environmental Action in the Amazon

with Francisco Costa and Teevrat Garg

International agreements to reduce anthropogenic environmental disasters rely on public pressure driving local action. We study whether focused media and increased public outcry can drive local environmental action, reducing environmental damage. Although an annual affair, forest fires in the Brazilian Amazon received unprecedented public scrutiny in August 2019. Comparing active fires in Brazil versus those in Peru and Bolivia in a difference-in-differences design, we find that increased public attention reduced fires by 22% avoiding 24.8 MtCO2 in emissions. Our results highlight the power of public attention to compel local action on pressing environmental issues.


Simulating Climate Risk Scenarios for the Amazon Rainforest

Climate Policy Initiative and AWS, 2023.
Media: O’Eco, O Globo

Mapping the Effect of Deforestation on Rainfall: a Case Study from the State of Mato Grosso

Climate Policy Initiative, 2021.
Media: Valor, O’Eco

Measuring the Indirect Effects of Transportation Infrastructure in the Amazon

Climate Policy Initiative, 2020.
with Arthur Bragança and Juliano Assunção