Background and Context #

Nature crimes, which refer to illegal forms of logging, fishing, mining, forest conversion and wildlife trade (WRI, 2025), exploitpose a profound and complex threat to conservation, impacting not only forests but also local communities, Indigenous Peoples, civil society organizations, and governments. In the Brazilian Amazon, deforestation has sharply increased since 2012, largely driven by illegal activities such as logging, gold mining, land grabbing, and especially cattle ranching. The livestock sector, for example, closely tied to the meat industry, is estimated to be responsibleAccording to the study used in this analysis, 91% of deforestation in the Brazilian Amazon occurred between 2008 and 2021, within the potential cattle purchasing zones of active slaughterhouses, indicating a strong spatial and functional linkage between deforestation dynamics and the cattle/meat supply chain (Imazon, 2023). While the IImazon study does not attribute deforestation causality exclusively to livestock production, it provides robust evidence of the sector’s central role in areas where deforestation effectively occurs. (Imazon, 2023), The conversion of native vegetation into pasture often marking the first step in broader land speculation and claims of ownership in undesignated public lands (Alvarenga, 2018; Silva et al., 2021).

he literature on nature crime in the Brazilian Amazon presents a coherent analytical framework in which governance weaknesses lie at the core of deforestation dynamics. Weak law enforcement capacity, insecure land tenure, limited institutional coordination, and data constraints create conditions that enable illegal activities—most notably cattle ranching—to expand at the forest frontier. These activities, in turn, drive observed patterns of deforestation and forest degradation. A related strand of the literature quantifies the economic consequences of this process, valuing forest loss and estimating the fiscal and social costs associated with enforcement failures and policy responses. Together, these strands show that deforestation outcomes, economic losses, and policy effectiveness are jointly determined by underlying governance structures and cross-border dynamics.

While this study focuses on Brazil, the choice is not merely national in scope. Brazil contains the largest share of the Amazon biome and concentrates much of the region’s deforestation pressure, meaning that governance failures and policy responses within its borders have direct spillover effects on cross-border dynamics of nature crime across the Amazon basin.

A key finding across Cunha et al (2016) is the strong linkage between the livestock sector and forest conversion. In Brazil, deforestation is overwhelmingly driven by agricultural expansion, which accounts on average for 97% of total forest loss, whereas illegal mining represents 0.4% and other unspecified causes account for 1.8% (Mapbiomas Alerta, 2024). The expansion of pasture often marks the initial step in land speculation and the assertion of ownership in undesignated public lands, thereby facilitating broader illegal activities at the forest frontier. This linkage reflects governance failures at multiple scales—from local land-tenure disputes to national policy implementation gaps—that together sustain deforestation pressures. Empirical work such as Cunha et al (2016) indicates that improvements in enforcement and the expansion of protected areas have contributed to changes in deforestation patterns, suggesting that policy design and implementation are central to shaping outcomes in the Amazon region.

Illegal deforestation involves a fundamental economic trade-off between the private benefits of nature crime and the social value of keeping forests standing. For perpetrators, activities such as illegal logging, cattle ranching, and land speculation generate short-term, liquid gains with relatively low expected penalties. From a social perspective, however, deforestation entails a substantial opportunity cost: the loss of ecosystem services provided by standing forests, including climate regulation, carbon storage, water cycling, biodiversity, and other non-market benefits that underpin long-term economic welfare. While these benefits have clear and measurable monetary value, they are largely external to private decision-making and remain uncompensated. As a result, illegal forest conversion yields private profits for a few actors but generates large net economic losses for society as a whole.

Nature crime globally is estimated to generate between USD 110–281 billion (FACT Coalition, 2024), underscoring the magnitude of illegal extraction and the associated opportunity costs of forest loss. High commodity prices—e.g., for gold and cattle products—continue to incentivize illegal activities in the Amazon basin, while governance weaknesses in Brazil amplify domestic costs and constrain policy responses.

A comprehensive cost assessment for Amazon deforestation must integrate multiple valuation channels. The valuation of ecosystem services—particularly carbon storage—provides a crucial dimension of these costs. The climate-regulation benefits of standing forests imply substantial global and regional monetary values that should be incorporated into any comprehensive cost estimate, complementing direct revenue losses from timber, minerals, and other illegal rents. Direct damages include illegal extraction rents and the foregone rents from land converted to pasture or other uses, while indirect damages encompass losses in ecosystem services such as water regulation, biodiversity, soil stability, and pollination, along with climate-related damages from carbon emissions and storage losses. Monetary valuation serves not only to communicate social costs but also to inform enforcement, fines, and reparations, reinforcing environmental justice objectives.enforcement, fines, and reparations, reinforcing environmental justice objectives.

Andersen (1997), for example, conducted one of the earliest comprehensive cost–benefit analyses of deforestation in the Brazilian Amazon. The study compared the total economic value of standing forests with the net present value (NPV) of alternative agricultural uses. At a 2% social discount rate, the economic value of an intact rainforest was estimated at about US$18,000 per hectare in 1990, equivalent to roughly US$41,000/ha in 2024. This included local and global benefits such as sustainable timber and non-timber products, water and fire regulation, watershed protection, carbon storage, biodiversity, recreation, and existence values. By contrast, the optimal agricultural land-use sequence (logging, followed by shifting cultivation and later perennial crops) yielded an NPV of US$24,000/ha (≈ US$55,000/ha in 2024), rising to US$120,000/ha (≈ US$275,000/ha in 2024) when urban spillover effects were considered. Andersen concluded that while the private benefits of deforestation then exceeded its social costs at about 10% forest loss, global costs would rise nonlinearly with additional clearing. The study thus argued that international transfers above US$9,000/ha (≈ US$20,000/ha in 2024) would be needed to maintain the forest at its globally optimal level.of deforestation then exceeded its social costs at about 10% forest loss, global costs would rise nonlinearly with additional clearing. The study thus argued that international transfers above US$9,000/ha (≈ US$20,000/ha in 2024) would be needed to maintain the forest at its globally optimal level.

Moreover, deforestation in Brazil is not only a domestic issue. Much of the illegal activity occurs in transboundary areas and contributes to broader regional dynamics of nature crime. However, cooperation between Amazonian countries remains limited, and there is a lack of aggregated data on cross-border impacts (UNODC, 2023; Crisis Group, 2023).

The impacts of deforestation extend far beyond vegetation loss. They include severe consequences for water availability and quality, regional biodiversity, and global climate. These damages diminish local and global well-being, making the monetary valuation of such losses essential. Economic valuation not only helps communicate the social costs of environmental crimes but also supports the design of enforcement mechanisms, fines, and reparations, strengthening accountability and environmental justice (Hanusch, 2023). Developing robust methodologies for estimating these impacts is thus critical for strengthening legal accountability and ensuring environmental justice.

Objectives of the Study #

The objective of this study is to assess illegal deforestation in the Brazilian Amazon and to estimate, in monetary terms, the associated losses in ecosystem services and socio-environmental benefits,, based on high-resolution land-use data. By quantifying these impacts, the study aims to provide an evidence-based foundation to inform policy design, enforcement strategies, and decision-making processes related to nature crime.

Given these implications, Conservation Strategy Fund (CSF – Brazil), in partnership with Amazon Conservation (ACA) funded by the World Bank-led, GEF-funded Amazon Sustainable Landscapes Program (ASL), intends to address the World Bank’s strategic objectives to work in a coordinated manner with governments, ACTO, cooperators, civil society organizations, and especially, with local communities to support awareness raising, capacity building, and knowledge management so as to prevent and mitigate the impacts of nature crimes.

Methodology for estimating the socio-environmental impact of illegal deforestation in Brazil #

Brazilian Amazon – Focus área #

The Amazon rainforest is one of the most biodiverse biomes in the world. Spanning across nine countries in Latin America, some areas of the forest contain more than 20% of all known terrestrial species and store approximately 100 billion tons of carbon. Moreover, it plays a critical role in regulating the continental climate due to its influence on moisture recycling and distribution (Yao et al., 2024). In addition, the Amazon is essential for global carbon sequestration and maintenance, making it a strategic biome in the fight against climate change (Boulton et al., 2022).

Despite recent downward trends, deforestation rates in the Amazon continue to reach alarming levels annually. In 2023 alone, more than 2,9 million hectares¹ of forest and other native vegetation formations were lost in the Brazilian Amazon (Mapbiomas, 2024). As shown in Figure 1, municipalities in the state of Maranhão and Pará registered the highest deforestation rates, particularly Altamira municipality, which recorded 20,000 hectares of forest loss. This spatial concentration highlights that municipalities, such as Altamira and its neighbours, are hotspots, where targeted enforcement and restoration efforts could yield larger impacts.



figure 1: deforestation map for 2023, per municipality in the brazilian amazon. data from mapbiomas (2024)

The Brazilian Amazon is under intense and multifaceted pressure from environmental crimes and unsustainable land-use changes, including illegal mining, soybean cultivation, cattle ranching expansion, and real estate speculation. These activities, combined with degradation drivers such as forest fires, are accelerating the loss of native vegetation and the fragmentation of ecosystems.

Drawing on high-resolution land-use data from MapBiomas platform, it is possible to quantify the extent and nature of these transformations, identifying the specific land uses that replace forested areas. For this analysis, we used data from the MapBiomas Collection 9 dataset (MapBiomas, 2024), which provides information on forest cover and its transitions to other land uses, such as agriculture and pasture². The dataset includes land-use transitions between 2022 and 2023 and was the only data source available at the time this study was conducted. Given that this report considers two land-use change scenarios—conversion of forest to pasture and to agriculture—the transition data are essential for conducting the valuation analysis. These data and their application will be described in greater detail in the following sections.

In 2023 alone, MapBiomas data show that approximately 18.7 thousand hectares of forest and other native vegetation formations were converted into pastureland , while about 2.7 million hectares were transformed into agricultural cropland . These figures highlight the disproportionate role of cattle ranching as a driver of deforestation compared to other agricultural uses, underscoring the structural challenge of aligning land-use practices with conservation goals. It is important to highlight that, since this study focuses exclusively on illegal deforestation, we adopt the estimate from Instituto Centro da Vida (ICV, 2024) indicating that 90.8% of deforestation in the Brazilian Amazon is illegal. To assess illegal deforestation, we apply the ICV estimate that 90.8% of deforestation in the Brazilian Amazon is illegal as a proportional adjustment to the 2023 MapBiomas land-use transitions, multiplying the total areas converted to agriculture and pasture by this share to derive the illegally converted hectares. Based on this assumption, the present analysis evaluates the impacts of the illegal conversion of approximately 17 thousand hectares into agricultural cropland and 2.4 million hectares into pastureland.

table 1: land-use transitions between 2022 and 2023 in the brazilian amazon. source: mapbiomas, collection 9 (2024)

State	Forest area converted to pastureland (in hectares)	Forest area converted to agriculture (in hectares)
Acre	58,271	0
Amazonas	190,184	384
Amapá	18,087	442
Maranhão	442,468	592
Mato Grosso	665,555	13,329
Pará	818,042	2,136
Rondônia	213,825	338
Roraima	65,877	1.022
Tocantins	260,040	475
TOTAL	2,732,349	18,718

Methods to Estimate the Socio-Environmental Impact of Deforestation #

Before presenting the estimate of the socio-environmental impact of illegal deforestation, it is necessary to explain the conceptual bases for the definition of value. Value is a measure of well-being that can be represented according to socially defined “trade-offs” through relative importance to an economic agent. In the context of illegal deforestation in the Brazilian Amazon, these agents include those who gain private benefits from forest conversion, such as illegal loggers, land grabbers, and cattle ranchers, as well as those who bear the costs, including local and Indigenous communities, governments, and society at large. While some actors capture short-term private gains, the aggregate impact represents a significant net loss of value for society as a whole. Accordingly, this study adopts a social welfare perspective, quantifying the overall economic damage caused by illegal deforestation rather than the private profits of the perpetrators.

In other words, value is relative since it is related not only to the characteristics of the object in question but also to the context in which it is inserted, its relative scarcity (supply) and the pressure for the use of resources (demand). In other words, value is socially defined and depends on how changes in resource conditions affect people’s well-being. The assessment of what is lost or gained from a change – such as deforestation – therefore, depends on a reference point or baseline, which represents the current situation and allows us to measure variations in individual preferences.

The monetary measurement of the loss of social welfare aims to bring information to society and, mainly, to decision-makers, about the effects of changes in environmental attributes. In this perspective, the analysis adopts a predominantly national welfare perspective for ecosystem services whose benefits accrue primarily within Brazil. This type of instrument can arise with different objectives, such as the definition of ecological compensation, the evaluation, and prioritization of investments, or the calibration of economic incentives such as payment programs for environmental services. Given the focus of this report on illegal deforestation, our assumption is that the use of economic incentives is not pertinent, and that compensation of lost value must instead be enforced, alongside the application of penalties as deterrent (in the form of fines or other sanctions).

In this sense, economic valuation compares and weighs what can be gained or lost in different scenarios exemplified here:

a) Maintenance of the standing forest and preservation of the economic value arising from the provision of environmental services;

b) Deforestation with the loss of environmental services in which an area of ​​native vegetation is converted into pasture for cattle production.

c) Deforestation with the loss of environmental services in which an area of ​​native vegetation is converted into agriculture.

The measurement of impact categories makes use of different valuation methods that can be divided into three approaches:

• Opportunity cost of land or lost benefits (direct values): these are the benefits Amazonian and global society lost as a result of deforestation. The opportunity cost is calculated based on the expected economic return from the land use alternatives of those who have the ownership to the land. The options related to the opportunity cost are providing wood and non-timber resources from the forest. In addition to the economic return, lost well-being values ​​that are not marketed in the market are also considered, such as cultural and recreational services.

• Area replacement or recovery cost: represents the cost of the appropriate techniques to recover the damaged environment and human well-being.

• Loss of ecosystem services (indirect values): deforestation generates a loss of well-being as the standing forest provides several ecosystem services that would be affected, such as carbon sequestration, water regulation, and erosion control.

Each approach described above makes it possible to value the loss of well-being differently. Table 2 summarizes the various impacts measured in this methodology.

table 2: approaches for valuing the impact of deforestation and the respective measured activities

Economic valuation approach	Specific impact
Opportunity cost (Direct value approach)	Timber and non-timber products3
Loss of ecosystem services (Indirect value approach)	Carbon removal4
	Bioprospecting5
	Erosion control6
Replacement cost	Forest recovery7

Source: Own elaboration

It is essential to consider that the approaches are complementary and must be addressed together. In other words, it is assumed that there may be a hypothetical recovery in the year after deforestation. However, even if recovery takes place, there is a time until the environmental services are mostly restored.

Therefore, the different costs per hectare for each specific impact activity, which were taken from a literature review, are then multiplied by the area impacted by deforestation.

(3)

On what:

C = Social cost of deforestation (in USD)

H = Impacted illegal area (in hectares)

A = Cost per hectare for each specific land opportunity cost impact activity (in USD/ha)

B = Cost per hectare for forest recovery (in USD/ha)

E = Cost of loss of ecosystem services (in USD/ha)

The formula is based on parameters found in the literature, which are related to the input information: the size of the deforested area (in hectare).

Further details on the calculation of each valuation approach in each specific impact activity are described in the next subsections.

Opportunity Cost Approach (Direct Value ) for Measuring the Impact of Deforestation #

Direct values are correlated with the concept of the opportunity cost of land, which is defined as the economic gain from alternative land uses. For example, the opportunity cost of conserving an area may be the alternative net income generated by cattle ranching on pastureland (Imazon, 2017). When analyzing a conventional (business-as-usual) scenario that maintains the trend of deforestation, the opportunity cost of the land is related to the net income that could be generated by sustainable timber and non-timber forest products.

The opportunity cost of land is estimated using the expected Net Present Value (NPV), which represents the average economic return of the land over time. The NPV is used to compare the returns from timber and non-timber products with those from other land uses with different production cycles. Therefore, economic alternatives are evaluated for activities that would no longer be suitable for newly deforested areas in the Brazilian Amazon.

The reduction in timber and non-timber forest products was valued based on their use value, which derives from the direct supply of timber and other non-timber products such as Brazil nuts and rubber. In a deforested scenario, the potential to use these resources is lost. The estimate is based on the availability of timber per hectare from the study by UFMG (2017a) and Strand et al. (2018). This volume of timber (m³/ha) could be responsibly extracted in the region at a market price of R$160/m³, as described for forest concessions by the Ministry of Agriculture, Livestock and Food Supply (MAPA, 2022).

Operational costs must also be considered, including supervision, inspection, monitoring, planting, thinning, and administrative costs, which total around R$11.39/m³, according to the 2023 data (Imazon, 2015). Based on this, the potential income that could be generated if the forest were conserved for a timber concession was calculated.

Our estimates for timber and non-timber products represent the social use value of sustainable, legal extraction. In practice, these values are not always realized by landholders because private incentives favor conversion: cattle supply chains have lower transaction costs and greater liquidity; weak enforcement reduces expected penalties; infrastructure and credit often favor ranching; and landholders apply higher private discount rates to longer-horizon forest revenues. To avoid overstating benefits, we deduct extraction and compliance costs, constrain volumes to sustainable yields, and run extensive sensitivity and “market-frictions” scenarios (including low-uptake cases) to reflect limited feasibility in parts of the region. value of sustainable, legal extraction. In practice, these values are not always realized by landholders because private incentives favor conversion: cattle supply chains have lower transaction costs and greater liquidity; weak enforcement reduces expected penalties; infrastructure and credit often favor ranching; and landholders apply higher private discount rates to longer-horizon forest revenues. To avoid overstating benefits, we deduct extraction and compliance costs, constrain volumes to sustainable yields, and run extensive sensitivity and “market-frictions” scenarios (including low-uptake cases) to reflect limited feasibility in parts of the region.

The projection of lost benefits from non-timber products is based on UFMG (2017b) and Strand et al. (2018), which consider Brazil nuts and rubber. The UFMG (2017b) study shows that the income value from Brazil nuts is R$64/ha/year in the Amazon (already updated to 2023 values).

Similarly, the Amazon region also produces an average of 4.42 kg/ha/year of rubber at an average price of R$9.20 per kilogram (Strand et al., 2018; UFMG, 2017b). The UFMG (2017b) study indicates that the income value from rubber is R$6/ha/year. Thus, for the valuation of non-timber products, the impacted area is multiplied by these updated values.

It is important to note that these opportunity cost estimates are applied uniformly across the study area and do not differentiate between land-use categories or protection status (e.g., protected areas where extraction is restricted), reflecting the municipality-level resolution of the available data.

Indirect Values (Ecosystem Services) Approach to Measuring the Impact of Deforestation #

Deforestation affects social well-being by reducing the provision of critical environmental services. This approach is separated from the land opportunity cost because it includes values that are not accounted for as direct economic returns, such as carbon sequestration and biodiversity.

Carbon was valued as an ecosystem e service that contributes to climate regulation, rather than as a potential return from carbon credits through the REDD+ mechanism. To reflect the societal value of carbon⁸, we applied a precautionary approach estimate of the Social Cost of Carbon (SCC), set at US$ 56/tCO2 (IWG, 2021 and one conservative scenario of value of USD 15.00 per ton of CO₂ was used (World Bank, 2022a) over a 30-year period, considering a different stock (tons of CO₂ per hectare) in the Brazilian Amazon by municipality (Heinrich et al., 2021). This approach does not assume that all forest areas would be eligible or covered by REDD+ projects, but rather reflects the social value of avoided emissions. However, it is important to consider that one hectare of deforested land, when converted into pasture, can still sequester 16.2 tCO₂ (Portela & Rademacher, 2001). This residual sequestration is deducted when calculating the net carbon loss from converting native vegetation to pasture. A lthough these market-specific costs are not applied here, since the valuation refers to the social—not financial—benefits of carbon storage.

Erosion control is classified as an indirect use value and plays a critical role in soil protection and conservation. This ecosystem service is essential for both ecosystem integrity and societal well-being, as it mitigates negative externalities such as river siltation, landslides, and the loss of soil fertility. Although its benefits are not directly consumed, erosion control underpins key economic sectors by reducing damages to agricultural productivity, hydropower generation, and water infrastructure. By preventing soil degradation and sediment accumulation, this service contributes to the long-term sustainability of land-use systems and associated economic activities. For this assessment, the economic value of erosion control in the Amazon was estimated using the unit values reported by Costanza et al. (1997), applied to the regional context.

The biodiversity value was estimated using the valuation function derived from Siikamäki’s (2015) meta-analysis, which synthesizes empirical evidence from 54 independent data points across multiple geographic and ecological contexts. This function calculates the annual per-hectare economic value of biodiversity conservation, focusing specifically on studies that found positive and statistically significant relationships between the value of habitat or species protection and key socioeconomic variables. These variables include population density—capturing the influence of human presence and demand for ecosystem services—and per capita GDP, which serves as a proxy for the capacity to pay for conservation benefits (World Bank, 2022b). By integrating these parameters, the approach provides a robust, empirically grounded estimate that links ecological outcomes with socioeconomic drivers, allowing for context-specific valuation of biodiversity in the Brazilian Amazon.

Replacement cost approach to forest cover recovery #

The replacement cost method is used to determine the cost of recovering the forest cover. This includes the value of the inputs and activities necessary for the forest restoration. Based on a literature review, the recovery costs for each method of restoration, per hectare, were collected and are displayed on Table 3. These costs can vary significantly depending on biophysical and ecological conditions, such as the level of soil degradation, the presence of invasive species, and the distance to seed sources or remaining forest patches.

table 3: cost of forest recovery technique in the brazilian amazon

Forest recovery technique	Value (2022 USD / hectare)	Reference
Seedling plantation	4,132	Ibama (2019)
	2,816	Imazon (2015)
	2,328	Brancalion (2019)
	4,765	TNC (2017)
	3,660	AVERAGE
Natural regeneration	49	Brancalion (2019)
	899	Imazon (2015)
	49	TNC (2017)
	332	AVERAGE
Assisted natural regeneration	475	Ibama (2019)
	344	Brancalion (2019)
	649	TNC (2017)
	489	Average value

The restoration costs, presented on Table 3 , can vary widely because they are sensitive to a set of biophysical and ecological conditions that affect the effort required to return degraded land to functional forest cover. For example, areas with more severe soil degradation or low seed availability require additional site preparation, soil amendment, or introduction of planting stock, increasing costs relative to areas where soils are intact and natural regeneration is feasible. Similarly, the presence of invasive species or high competition from grasses and weeds can necessitate costly control measures to enable establishment of native vegetation, and greater distances to seed sources or remnant forest patches reduce natural seed influx and may require supplemental planting (Siminski et al., 2021; Nature Conservancy Brasil, 2017). These context-specific factors help explain why restoration costs per hectare can vary significantly across landscapes and methods. Based on the literature review, the average of the different studies was chosen for each of the three forest recovery techniques. There are several scenarios for valuing this impact by multiplying the impacted area by the recovery cost for each desired technique.

Combining Direct, Indirect Values and Restoration Cost to Calculate the Impact of Illegal Deforestation in the Brazilian Amazon #

To combine the monetary values of different components, it is necessary to clarify their correspondence with the valuation approaches. In this framework, direct values refer to the opportunity cost approach, capturing foregone economic benefits (e.g., timber and non-timber products), while indirect values correspond to the ecosystem services approach, reflecting the loss of regulating and supporting services (e.g., carbon sequestration, water regulation, and biodiversity). These are complemented by the replacement cost approach, which estimates the cost of restoring forest cover. To combine these components, it is necessary to assess the monetary impact in the year under consideration. It is important to note that no double counting occurs when summing direct and indirect values (Fu et al., 2011).

The analysis is grounded i n the legal and economical principal that restoration will occur in the region, given that the deforestation is illegal — meaning that those responsible should be held accountable not only for the environmental damage caused but also for the full costs of restoration. Based on global meta-analyses (Rey Benayas et al., 2009; Meli et al., 2017), forest recovery is a gradual process whose pace depends on the type of ecosystem function considered. On averageOn average, abundance and some biogeochemical functions, such as soil stability and nutrient cycling, can recover within one or two decades, whereas biodiversity composition and carbon stocks typically require 20–50 years to approach reference levels.

For the purposes of this economic assessment, we adopted a 30-year time horizon as a conservative approximation of the period over which most ecosystem services significantly recover under active or assisted restoration scenarios (Rey Benayas et al, 2009; Meli et al, 2017).most of the (REY BENAYAS et al., 2009; Meli et al, 2017). As forest regenerative, s ustainable economic activities, such as the extraction of timber and non-timber forest products, may resume, allowing partial recovery of up to 80% of the ecosystem services typically provided prior to degradation .

Therefore, it is necessary to consider the flow of benefits over time. For this purpose, the Net Present Value (NPV) formula is used to bring all future benefit flows to the initial year of analysis.

Economic Impacts of Illegal Deforestation in the Brazilian Amazon #

As a methodological outcome of assessing the economic impact of a nature crime of illegal deforestation in the Brazilian Amazon in 2023, it is possible to estimate the total socio-environmental cost associated with this nature crime . These estimates are derived from the combination of three complementary valuation approaches described earlier: (i) the opportunity cost approach (direct values), capturing the foregone benefits from sustainable forest uses; (ii) the ecosystem services approach (indirect values), reflecting non-market welfare losses such as carbon storage, biodiversity, and water regulation; and (iii) the replacement cost approach, which estimates the cost of restoring forest cover. For each hectare of illegal deforestation, these components are estimated and aggregated across the affected area, ensuring that direct, indirect, and restoration-related impacts are jointly accounted for without double-counting.

This restoration can be carried out through different forest restoration techniques, ranging from lower-cost approaches such as natural regeneration to more complex and costly methods such as direct seeding.

Accordingly, two scenarios are presented below: one reflecting higher costs associated with the implementation of more complex restoration techniques (direct seeding), and another reflecting lower costs linked to simpler approaches (natural regeneration).

The following table presents the total estimated costs of impacts under both scenarios, considering the two main land-use conversion contexts: conversion to pastureland and conversion to agricultural cropland.As noted in Section 3.1, MapBiomas data for 2023 indicate that approximately 18.7 thousand hectares of forest and other native vegetation were converted to pastureland, while around 2.7 million hectares were transformed into agricultural cropland. These figures reinforce the disproportionate role of cattle ranching as a primary driver of deforestation, highlighting the structural challenge of reconciling prevailing land-use dynamics with conservation objectives.

Given that this study focuses exclusively on illegal deforestation, we rely on the estimate from Instituto Centro da Vida (ICV, 2024), which indicates that 90.8% of deforestation in the Brazilian Amazon is illegal. This proportion is applied to the 2023 MapBiomas land-use transition data as an adjustment factor, allowing us to isolate the share of land conversion attributable to illegal activities.

Based on this approach, the analysis considers the impacts associated with the illegal conversion of approximately 17 thousand hectares into agricultural cropland and 2.4 million hectares into pastureland.table 4: scenarios and total costs of nature crime in 2. 4 million hectares illegally deforestated

	Scenario with lower-cost restoration techniques (natural regeneration)	Scenario with more complex restoration techniques (direct seeding)
	Impact of conversion to agricultural areas (16 thousand of hectares)	Impact of conversion to pastureland (2.4 millions of hectares)	Impact of conversion to agricultural areas (16 thousand ofhectares)	Impact of conversion to pastureland (2.4 millions of hectares)
Total cost (SCC – Social Cost of Carbon price)	US$ 651 million	US$ 25 billion	US$ 1.1 billion	US$ 110 billion
	US$ 25.6 billion for lower-cost tecnhiques for agricultural and pastureland areas	US$ 111 billion for more complex tecnhiques for agricultural and pastureland areas
Total cost (REDD carbon price)	US$ 42 million	US$ 2.7 billion	US$ 111 million	US$ 7.7. billion
	US$ 2.7 billion for lower-cost tecnhiques for agricultural and pastureland areas	US$ 7.8 billion for more complex tecnhiques for agricultural and pastureland areas

Source: Own elaboration



Figure 2: total cost (USD) distributed by municipality

The results reveal a stark contrast between the economic impacts of different land-use conversion types and restoration strategies. While the conversion of forest to agricultural cropland generates substantial restoration costs, the conversion to pastureland represents a disproportionately higher financial burden. This discrepancy is largely explained by the vast difference in the scale of converted areas—2.7 million hectares to pasture compared to only 17 thousand hectares to agriculture—as well as potential differences in the degree of ecological degradation, which influence restoration requirements.

From a methodological standpoint, the comparison between natural regeneration and direct seeding highlights the significant influence of restoration technique choice on total cost estimations. Natural regeneration, representing a lower-cost approach, results in total estimated damages of US$ 42 million to US$ 651 million for agricultural conversion and US$ 2.7 billion to US$ 25 billion for pasture conversion. In contrast, the adoption of direct seeding—a more complex and input-intensive technique—raises these costs to US$ 111 million to US$ 1.1 billion and US$ 7.7 billion to US$ 110 billion, respectively. This cost escalation underscores the trade-offs between ecological effectiveness and financial feasibility in restoration planning.

From a policy and enforcement perspective, these findings emphasize the urgency of preventing illegal deforestation as the most cost-effective strategy. The financial resources required for restoration, especially in large-scale pastureland conversions, are substantial enough to strain both public budgets and potential private sector contributions. Moreover, given that ecological restoration occurs s over decades, these estimates likely understate the full long-term socio-environmental costs. ecological recovery, the monetary costs reported here only partially capture the long-term biodiversity and ecosystem service losses, suggesting that the true socio-environmental cost of illegal deforestation is even greater than the financial estimates indicate.

Presenting the results on a per-hectare basis offers a clearer understanding of the relative economic burden of restoration across different land-use changes and restoration strategies. The figures indicate that restoring areas converted to agriculture generally incurs higher per-hectare costs than those converted to pastureland, regardless of the restoration technique Applied (table 5 ). For instance, under natural regeneration, agricultural conversion costs are estimated at US$ 2,476 /ha using a REDD prices for carbon compared to US$ 1,097/ha for pasture for the same scenario, while direct seeding raises these costs to US$ 6,532 /ha and US$ 3,125/ha, respectively.

table 5: average cost values per hectare

	Scenario with lower-cost restoration techniques (natural regeneration)	Scenario with more complex restoration techniques (direct seeding)
	Impact of conversion to agricultural areas	Impact of conversion to pastureland	Impact of conversion to agricultural areas	Impact of conversion to pastureland
Cost per hectare (Social cost of carbon)	US$ 38,335/ha	US$ 10,204 /ha	US$ 64,837 /ha	US$ 44,366 /ha
Cost per hectare (REDD prices)	US$ 2,476/ha	US$ 1,097/ha	US$ 6,532/ha	US$ 3,125/ha

Source: Own elaboration



figure 3: cost per hectare of restoration of illegaly deforested land (USD) by municipality in the brazilian amazon

This pattern reflects differences in the intensity and type of land-use impacts. Agricultural conversions, especially for large monoculture crops, often involve higher soil disturbance, chemical inputs, and removal of vegetation, which can hinder natural regeneration and increase the need for complex restoration interventions (MARTÍNEZ-RAMOS et al., 2016). In contrast, pastureland—even degraded—may retain some capacity for natural regenerating, reducing the per-hectare investment required, particularly when using lower-cost restoration methods (SILVA et al., 2023; MARTÍNEZ-RAMOS et al., 2016).

Overall, large-scale monoculture agriculture typically results in more e intensive mechanization and widespread soil degradation, demanding more substantial soil amendments and site preparation for restoration, whereas pasture systemscan exhibit more variable levels of degradation, leading to a wider range of restoration costs depending on site-specific conditions.

The comparison between natural regeneration and direct seeding further emphasizes the financial implications of restoration strategy choice. Direct seeding consistently more than doubles per-hectare costs, underscoring its resource-intensive nature. While potentially delivering faster or more reliable ecological outcomes in heavily degraded areas, it may be financially prohibitive if applied indiscriminately. This reinforces the importance of tailoring restoration approaches to site-specific conditions, combining cost-efficiency with ecological effectiveness.

Taken together, both total and per-hectare cost assessments highlight the scale of the economic liability associated with illegal deforestation in the Brazilian Amazon. These findings strengthen the case for proactive prevention, robust enforcement of environmental regulations, and strategic allocation of restoration resources. By aligning restoration techniques with the severity of degradation and local ecological contexts, it is possible to optimize outcomes while minimizing the financial burden on public budgets and conservation programs.

Conclusion #

This study assessed the socio-environmental costs of illegal deforestation in the Brazilian Amazon by combining three complementary valuation approaches: opportunity cost (direct values), ecosystem service losses (indirect values), and restoration costs. The results show that total damages are substantial, ranging from US$ 2.7 billion to US$ 25.6 billion under lower-cost restoration scenarios, and from US$ 7.8 billion to US$ 111 billion under more complex restoration assumptions.

These estimates are driven primarily by the large scale of pasture expansion, which accounts for the majority of deforested areas and associated impacts. Even on a per-hectare basis, the results highlight significant economic losses, reflecting both the depletion of market and non-market values and the long-term costs of ecological recovery.

Overall, the findings indicate that illegal deforestation generates substantial net economic losses for society, as private gains from land conversion are outweighed by the broader social costs associated with ecosystem degradation and restoration obligations.

Final Considerations and Decision-Making Insights #

The Brazilian Amazon faces growing pressure from multiple fronts, particularly from cattle ranching, illegal logging, gold mining, and land grabbing. If emissions and deforestation trends of the last decade continue, the Brazilian Amazon will lose another 59 million hectares (an area larger than France) by 2050 (Nobre et al, 2023), leading to irreversible losses of biodiversity, ecosystem services, and significant economic costs. The economic impact of illegal deforestation in the Brazilian Amazon in 2023 is estimated to fall within the range of US$ 2.7 billion to US$ 25.6 billion, in the scenario with lower-cost restoration techniques. These estimates assume that a share of deforested areas can recover through natural regeneration under favorable ecological conditions and are evaluated over a 30-year time horizon. In cases where natural regeneration is not feasible due to higher levels of degradation (e.g., soil compaction or nutrient depletion), higher-cost restoration techniques, longer recovery periods, and greater losses of ecosystem services are expected, as reflected in the upper-bound scenarios.

The lower bound of the estimate reflects scenarios in which natural regeneration occurs under favorable biophysical conditions and lower opportunity costs, while the upper bound captures cases with higher restoration costs, longer recovery periods, and higher implicit values of lost ecosystem services, particularly carbon storage. As for the scenariothe scenario for the scenario with more complex restoration techniques, the estimated value fall within the range of (natural regeneration techniques in agricultural and pastureland) and US$ 7.8 billion to US$ 111 billion. Compared to natural regeneration, scenarios relying on more complex restoration techniques are particularly sensitive to assumptions regarding implementation costs, labor intensity, and maintenance requirements. The wide estimated range therefore captures plausible variation in restoration pathways rather than uncertainty about the existence of impacts, highlighting the importance of site-specific conditions and implementation choices in determining total economic costs. The social costs of lost ecosystem services, including climate regulation, soil protection, etc for one scenario with more complex restoration techniques (direct seeding). To contextualize the values estimated by this study, the economy of Brazil’s Northern region (which comprises much of the Amazon) has a GDP on the order of R$ 970 billion (≈ US$ 176 billion) in recent years, reflecting the region’s formal, legally generated economic output. This means the annual cost of deforestation is non-negligible relative to regional output, around 63%.

These figures represent the real economic damages borne by society, rather than forgone opportunities, underscoring the urgency of policies that align economic development with forest conservation. But this figure does not tell the whole story: these are net losses to society, whereas a portion of the value is transferred to illegal actors via timber, land speculation, or cattle expansion. In other words, private interests capture gains while public goods are degraded.

Importantly, these figures are likely conservative, as they do not yet account for other indirect and external impacts, such as the escalation of land conflict , or public health risks associated with forest loss.

This analysis highlights the urgent need for coordinated action to halt illegal deforestation and transition towards sustainable land use models. The expansion of unregulated economic activities and the persistent lack of effective land governance not only accelerate biodiversity loss but also undermine Brazil’s potential to generate long-term economic value from standing forests. Most of these damages are not currently internalized through functioning economic instruments. The total economic value of standing forests is still largely uncompensated. Carbon markets remain volatile and geographically limited; high-integrity forest carbon credits face credibility and demand challenges; biodiversity credits are at an early, experimental stage and are structurally complex; and the costs of ecological restoration are overwhelmingly borne by public agencies or external funders, not by those responsible for illegal clearing. In practice, this means the social losses quantified above are real, immediate, and mostly uncompensated.

The current response from public authorities is still not sufficiently dissuasive. Illegal deforestation persists because expected penalties, such as fines, asset seizure, loss of land claims, are uncertain, slow, or reversible. By contrast, the private gains from clearing are fast and liquid: timber can be sold, cattle can be moved, and land claims can be regularized later through political pressure. Strengthening deterrence, therefore, requires not only legal prohibitions but credible, timely, and costly consequences for offenders.

There is evidence from other fronts of environmental crime that this is possible. In the case of illegal gold mining, for instance, valuation tools have helped prosecutors and environmental agencies calculate damages in monetary terms and use those values to guide fines, civil liability claims, and restoration orders (Gasparinetti et al, 2024; Conservation Strategy Fund, 2023). Applying a similar approach to illegal deforestation, i.e. attaching a quantified, jurisdiction-specific economic cost to each hectare cleared, would allow enforcement agencies to seek compensation that reflects the true socio-environmental damage, rather than symbolic or arbitrary penalties. This shifts part of the restoration burden back toward perpetrators.

At the same time, long-term forest conservation cannot rely solely on repression. A durable solution also requires creating legitimate, predictable revenue streams for keeping forests standing, especially for actors who are not engaging in crime but are under economic pressure to convert land. Established mechanisms such as REDD+ initiatives, alongside emerging initiatives such as the Tropical Forest Finance Facility (TFFF), aim to channel finance toward standing forests through performance-based payments. These mechanisms could help close the gap between public value and private incentives by rewarding conservation in a stable, reliable way. However, unless these benefits are explicitly redistributed to the local level to communities, smallholders, and legitimate landholders in high-pressure frontiers, they will not fully counterbalance the incentives to clear. In practice, even with new finance, strong command-and-control style policies from governments will remain essential to contain organized deforestation and land grabbing.

Put together, the evidence suggests that halting illegal deforestation in the Brazilian Amazon is both an economic and institutional challenge. It is not enough to “make the forest more valuable on paper”; the policy mix must (i) raise the expected cost of environmental crime for perpetrators, (ii) ensure that the cost of restoration is enforced rather than socialized, and (iii) create accessible, long-term economic alternatives to extensive cattle ranching and speculative clearing.

To change this trajectory, a set of strategic interventions is required:

• Strengthen and enforce environmental legislation by improving the speed, certainty, and magnitude of penalties for illegal clearing. This includes: (i) linking fines and civil liabilities to standardized, jurisdiction-specific estimates of socio-environmental damage per hectare; (ii) streamlining administrative and judicial procedures to reduce delays in sanctioning and enforcement; (iii) strengthening monitoring and traceability systems to ensure that illegal clearing is rapidly detected and attributed to responsible actors; and (iv) enhancing inter-agency coordination (e.g., environmental agencies, prosecutors, and land registries) to enable effective asset seizure, enforcement of restoration obligations, and prevention of land regularization linked to illegal deforestation.

• Secure land tenure and clarify property rights, especially in areas vulnerable to land grabbing, enabling sustainable forest management, restoration, and community-based use.

• Create and scale predictable financial mechanisms that reward standing forests, for example, performance-based payments and initiatives such as the TFFF, with explicit provisions to channel benefits directly to local communities, smallholders, and other legitimate stewards, not only to national or international intermediaries.

• Expand real-time monitoring, traceability, and transparency (including public access to satellite data and enforcement outcomes) to reduce impunity and allow civil society, prosecutors, and control agencies to act more quickly on illegal clearing.

• Foster inter-institutional collaboration among federal, state, and local authorities, civil society, and Indigenous communities to improve land-use planning and align territorial governance with conservation goals.

• Promote political will and accountability by translating scientific evidence—such as the economic cost of inaction—into compelling arguments for decision-makers, donors, and the public.

In sum, protecting the Brazilian Amazon is not only an environmental imperative:it is an economic governance necessity. Forests offer viable, scalable pathways for sustainable development, climate mitigation, and community resilience. By prioritizing legal enforcement, sustainable alternatives, and transparent governance, Brazil can avoid the high costs of deforestation and unlock the full value of its most vital natural asset.

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Notes #

1. Values from Mapbiomas Collection 9 – Land Cover and Transitions Database (2024).

2. Under the MapBiomas hierarchical land-use and land-cover classification system, areas classified as “forest” comprise Forest Formation, Wooded Sandbank Vegetation, Floodable Forest, Mangrove, and Savanna Formation. In this study, the term “forest” is used to refer to the aggregation of these classes.

3. Native vegetation deforestation means a loss of opportunity to exploit timber and non-timber products (such as coffee, bananas, cocoa, guarana, among others).

4. Maintaining the forest provides some ecosystem services such as carbon removal, contributing to climate regulation and mitigating climate change.

5. Research and exploitation of the biodiversity of a region, its genetic and biochemical resources of commercial value.

6. The standing forest is essential as it retains water in the roots and soils. In degraded soils, soil absorption capacity is lost, which contributes to increased flooding and loss of ecosystem functions.

7. Forest recovery consists of transforming the pasture area used for livestock into an area with the basic ecological functions of a forested area.

8. Social Cost of Carbon is defined by the economic cost originated by an additional ton of carbon dioxide or its equivalent (Nordhaus, 2016).