Tropical deforestation accounts for almost one-fifth of greenhouse gas emissions worldwide. Because of its substantial deforestation, Indonesia is thought to be the world's third-largest producer of greenhouse gases, after the United States and China.

The Amazon rainforest has been described as the "lungs of our planet" because it provides the global environment with the essential service of continuously recycling carbon dioxide into oxygen. More than 20 percent of the world's oxygen is produced in the Amazon rainforest. In 2001, the Amazon covered approximately 5.4 million square kilometers, which is only 87 percent of its original size.^[1] Rainforests have decreased in size primarily due to deforestation. Despite reductions in the rate of deforestation in the last 10 years, the Amazon rainforest will diminish by 40 percent by 2030 at the current rate.^[2] According to WWF Brazil, deforestation and forest fires are responsible for 75 percent of Brazilian greenhouse gas emissions. 

In The Political Economy of Deforestation in the Tropics (NBER Working Paper No. 17417), co-authors Robin Burgess, Matthew Hansen, Benjamin Olken, Peter Potapov, and Stefanie Sieber find that Indonesia's decentralized and relatively weak governmental controls over forest resources in the post-Suharto era have contributed to illegal logging and widespread deforestation.

This is similar to the situation in the Brazilian Amazon. The far northern state of Roraima is very dependent upon timber sales and cattle production, and politicians are extremely beholden to these special interests. A few years ago, a group of state police set fire to a large part of Xixuaú, one of the communities where CEN has worked. The police also attempted to arrest the head of a local NGO, Associação Amazônia, on trumped charges in order to block the NGO's efforts to include the Reserva Xixuaú-Xiparinã in a new federal reserve, which would prevent forest extraction and cattle farming on the land. Ultimately, the police effort failed, but this demonstrates how far local and state officials will go to support the efforts of logging interests and cattle ranchers.

Recently, there have been increasing calls for part of the state of Pará, where CEN is working, to split to become a new state. This new state of Tapajós, of which Santarém would be the new capital, would be heavily reliant upon soy and timber revenues. Local and state politicians would be increasingly susceptible to influence by these interests, in the same way as they are in Roraima. The communities where we are working would be increasingly threatened by illegal logging, cattle ranching and soy farming, and deforestation rates in the region would undoubtedly increase.

The results of the Burgess et al. study suggest that, in their efforts to encourage conservation in forest-rich countries like Indonesia, Brazil, and the Democratic Republic of Congo, policymakers should consider the incentives of the local officials and politicians who may be profiting from the exploitation of these resources. The authors conclude that standard economic theories combined with innovative means of monitoring illegal extraction can offer powerful insights into what drives shortsighted and destructive resource management. 

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