The effect of the beef zero deforestation commitment in the Brazilian Amazon: A spatial panel data analysis

This paper investigates the effects of the Beef Zero Deforestation Commitment (Beef ZDC) on deforestation rates in the Brazilian Amazon. Using a spatial panel data regression model, the study analyzes data from 280 municipalities across three states of the Brazilian Amazon at three time points. The outcome variable, created through a geoprocessing technique, reflects the intensity of slaughterhouse activity under the zero-deforestation commitment within municipal jurisdictional limits. The findings show that higher Beef ZDC intensity is significantly associated with reductions in deforestation, with a 1 % increase in Beef ZDC intensity leading to a total 0.32 % decrease in deforestation, accounting for both direct and indirect effects. The direct effect means reductions within the municipality, likely due to stricter environmental standards and enhanced monitoring, while the indirect effect stems from spatial dependence, where actions in one municipality affect neighboring areas. Additionally, the study reveals a spatial autoregressive effect, where deforestation in one municipality triggers significant further deforestation in adjacent areas. The analysis underscores the importance of incorporating spatial dependence, using the adequate unit of analysis and considering local governance contexts, such as institutional arrangements, political economy factors, and organizational practices in investigating the outcomes of hybrid regulatory initiatives.