Fire risk perpetuates poverty and fire use among Amazonian smallholders

Forest fires exacerbate carbon emissions, threaten biodiversity and cause welfare losses to local populations. Most fires accidentally ignite from mismanaged swidden and pasture fires. We provide evidence that fire risk in the Brazilian Amazon, the world's largest remaining tropical forest, perpetuates low yield and environmentally degrading agricultural activities. Using a combination of household interviews and remotely sensed data on fire occurrence in Eastern Amazon municipalities of Paragominas and Santarem, we show that smallholders in consolidated farm-forest frontier regions are locked into a vicious cycle that inhibits their adoption of fire-free practices. Households that invest in more capital-intensive fire-free agricultural technologies experience greater revenue losses from escaped fires than non-fire users. Changes in revenues are as sensitive to these fire impacts as they are to changes in physical capital investments. To overcome this fire-poverty trap, a big push of coordinated local incentives is needed. Policies mitigating fire risk may achieve a triple-win that reduces greenhouse gas emissions, forest degradation, and fosters inclusive economic development.