When nobody is watching - COVID-19 impacts on the Amazon rainforest / Working Paper

Abstract

Deforestation is crucial to engage global threats such as climate change and biodiversity loss, yet little is known about the effect of COVID-19 on it. Using an event study design and a difference-in-differences approach, we find that COVID-19 increased deforestation by 35% across the Peruvian Amazon. This increased CO2 emissions by more than 17 million tons, representing a social cost equivalent to 3 times the national budget for forest management. The main mechanism behind these outcomes is the reduction in monitoring efforts, combined with an increase in illegal activities related to coca production and mining. The results illustrate that monitoring and enforcement are key to curb deforestation.