This study is part of an international project undertaken by the Forestry Department at the Food and Agriculture Organization (FAO) of the United Nations and The World Bank. It aims at the application of forestry accounting in distinct regional scenarios. Apart from Brazil, studies were also performed in Australia, Chile, Philippines and Zimbabwe.
To do so, methodological lines were set up in a background paper by Vincent and Hartwick (1997), carefully briefed and commented by distinguish experts and here denominated as V&H (1997).
The Brazilian case was selected to be applied in the Amazonian context. That choice was justified on the basis of the wide recognised importance of the region in ecological terms as well as its increasing economic relevance since it currently generates more than 70% of the total round wood produced in Brazil.
That choice was not taken however without considering the data availability problems since it will be requiring information which is usually difficult to find even in forestry activities taking place in modern economic scenarios. The open access features of the Amazonian context is by nature one of lack of institutional enforcement, proper managerial practices and, consequently, fragile information systems. We have made the most of data availability, even though, some generalizations have been necessary. Bearing that in mind, our results will need to be seen under this perspective.
On the other hand, the application of depreciation estimation methodologies in that Amazonian context has proved to bring about issues which, though are theoretical and methodologically fully recognized, are not always revealed in other regional exercises. High timber stocks, lack of property rights and informal economic relations, are issues that require great deal of caution when one is applying economic depreciation methodologies. We hope that in addressing them, we have attached a greater value added to this methodological exercise.
Previous estimates for natural capital depreciation in Brazil faced the same data barriers, particularly in forest accounts for which estimate values with 1985 as the closing year1 were used. Apart from being more comprehensive in methodological procedures, our study was able to rely on recent survey data and cover the 1990/95 period which can capture the dramatic deforestation process and the radical increase in timber production started in the late eighties.
Whatever the context, environmental accounting faces theoretical and methodological controversies. Even though sustainability principles can explain methodological differences,2 some theoretical issues, such as appropriate discounting and dynamic optimal behaviour, play an important role. This study will attempt to address these issues on the lines of V&H (1997) to the Brazilian Amazon.
Section 2 presents an overview of the forest conversion pattern in the Brazilian Amazon and its relationship to the local timber exploitation activity. Following H&V (1997), methodological approaches are presented in the following section. Due to the Amazonian context, property right enforcement issues are analysed in Section 4. The following section describes our estimation procedures and analyses the results. The last section offers additional comments in the appropriateness of forest accounting in the Brazilian Amazon and raises some questions related to its usefulness for environmental planning in the region.
