We examine the impact of carbon prices on the optimal allocation between agriculture and forest in the Brazilian Amazon. We show that modest emission prices would make it optimal for Brazil to restore the forest in most of the land in the Amazon, what would result in substantial CO2 capture.

Bio: José A. Scheinkman is the Charles and Lynn Zhang Professor of Economics at Columbia, Theodore Wells '29 Professor of Economics (emeritus) at Princeton, and Research Associate at NBER. Scheinkman's most current research is on the economics of preservation of tropical forests.