Out of the Woods? The Long-Term Costs of Biodiversity Loss for Brazil’s Agricultural Sector

This paper constructs a novel biodiversity dataset for Brazil, measuring the annual change in species richness during 1985-2020 at 300m resolution. It then uses a spatio-temporal ARDL model to establish the long-run effects of bio-diversity loss on agricultural yields. Brazil lost 8 percentage points in species richness compared to an undisturbed baseline during 1985-2020, largely driven by substantial reductions in regions bordering the Amazon. Long-run crop yields decreased up to 4% for every percentage point in biodiversity loss, and up to 10% when considering pest control species. Resulting soybean and maize yield decreases reduced agricultural GDP by 15.3% in 2020.