I am doing a school research project. I just visited the web site www.rain-tree.com. It says that it is less profitable to log the Amazon rainforest than to profit from it in other ways, especially in using it for the production of drugs.
If it is obviously more profitable to leave the Amazon intact, why is it still being logged?
Joey.
Even if it’s more profitable in the long term to produce drugs, logging comapnies aren’t in that business. They make a (quick) profit from cutting down trees.
Where might I get more specific and precise statistics on how the short term profits of logging compare to the long term profits of leaving them intact?
Joey
Seeing as it’s homework, maybe you should find out some answers for yourself.
Would you rather earn $1 million this year, or take $1,000 this year but have the knowledge that you, and your children, and their children, can earn that much next year, and the year after… and so on?
If you go for the second option then well done for seeing the big picture, but you might not go far in the logging business 
Quite frankly I find the claim outrageous.
“Schneider (1992) reports upper bound values of $300 per hectare for land in Rondonia, Brazil.” (http://www.ucl.ac.uk/~uctpa15/EDINBG.pdf). In other words land in the Amazon is only worth $120/acre. If it were possible to obtain a return of $2,400/acre in perpetuity from sustainable harvesting that amounts to a nearly 2000% return on investment annually . If that were true every investor in the world would pouring money into buying rainforest in the Amazon as fast as they could.
I would have to call the whole website into question. Raintree is an ‘alternative medicine’ manufacturer. They have a vested interest in presenting an eco-friendly viewpoint to increase sales.
Despite several links to papers on there page I can not find the source for their claim that “The latest statistics show that rainforest land converted to cattle operations yields the land owner $60 per acre and if timber is harvested, the land is worth $400 per acre. However, if these renewable and sustainable resources are harvested, the land will yield the land owner $2,400 per acre.” It is more than a little suspicious that they have the space to provide references, but not that most important reference.
Joey you need to understand that most of the information on the internet is unreliable. You can’t just believe something because it appears on a webpage of a company making money out of selling products based on the fact that they save the rainforest. I strongly suggest that you evaluate the Raintree page against the following webpage and see what conclusion you come to about trusting it.
http://www.lib.lfc.edu/internetsearch/evalweb.html
It seems that raintree fails or is suspect on almost all points. Of particular relevance is:
Bolding mine. In this case the autor is the company selling the nutritional supplements.
The problem is that the raintree company is saying exactly the opposite. They are saying that logging only returns only return $400/acre and cattle rasing $60dollars/acre while sustained harvesting yields $2400 dollars/acre. It doesn’t mention whether these are annual figures or on some longer timeframe, but they are both clearly presented as being calculated on the same basis. In other words Raintree is saying that logging returns $1000 this year and sustained harvesting returns $1 million dollars this year.
If the logging and cattle raising figures are only for one year and the harvesting figure is calculated over some longer timeframe then the comparison is meaningless because they have not told us what that timeframe is. That such a question could even be asked shows that the Raintree page is not a credible source of information.
At what dollar value do you place depleting the Amazon rainforest and the resulting changes to the world climate by logging?
From the paper I linked to earlier it appears that it is compete bunkum. Both figures are hideously overblown.
The $400 timber value becomes around $45/acre.
“TaLampietti and Dixon note that most of the studies relate to Central and South America (14 studies out of 20 analysed). Average per hectare values come to $86-101 for Central and South America”
The $2,400/acre figure for harvesting becomes $5/acre, maximum.
“With regard to pharmaceutical products, the subject of extensive debate, Pearce and Puroshothaman (1995) suggest values of $0.01 to $21 ha per year, based on established probabilities of finding a successful drug from plant species currently at risk. This assumes a tropical forest area of 1 billion hectares. Ruitenbeek (1989) has rough estimates of medicinal plant value in
the Korup forest, Cameroun, which translate to around $0.2 to $0.7 per hectare. Using a very different approach, Simpson et al (1994) suggest that, taking an optimistic point of view, a pharmaceutical company’s willingness to pay would be a maximum of $20 per hectare in Western Ecuador and very much less, perhaps $1 per hectare, elsewhere. Thus, adopting different
approaches, these studies produce very low values for pharmaceutical values. Mendelsohn and Balick (1995) suggest a value of undiscovered tropical forest drugs to the pharmaceutical companies of $2.8-4.1 billion. They divide this by 3.1 billion hectares of tropical forest to obtain average values of $0.9 to $1.3 per hectare. The 3.1 billion hectares figures appears to be an exaggeration, whereas the Pearce-Puroshothaman (1995) estimate appears too low. Using a figure of 1.7 billion hectares of total tropical forest, the Pearce-Puroshothaman figures would reduce further to a range of nearly
zero to $12.3 per hectare, and the Mendelsohn-Balick figures would rise to $1.6 to $2.4 per hectare5. "
I understood that most deforestation in the Amazon occurs as the result of persons in poverty clearing land for subsistence agriculture. Most logging occurs within 300 miles of a sawmill in order to be cost effective.
So I think the question posed is a strawman and is not the right question to be asking. If you begin with the premise that the Amazon should not be de-forested, then the question should by why is it being deforested, and how can it be stopped? I have a hard time telling someone in the Amazon not to cut down some trees to grow food to eat.
Also, the Amazon is huge. I don’t think there is any bar to using the Amazon now for drug research. But I don’t think the subsistence farmers have the funds to invest in drug research and defer eating until their drugs (if any) are ready for market.
** LemonThrower ** wrote…
That’s about it, but it is not the whole story. (you cant see my location any more but I am writing from São Paulo, Brazil) First go to google and look up the key words ** slash and burn amazon ** (I got back more than 19,000 hits), learn about this because it is one of the biggest answers to your question. The other problem is that the U.S. and Europe create a market for the deforestation. People go out to government land and poach Teak and other hard woods that are endangered, the more common trees are also sold as pulp to make paper. Since regulations are hardly enforced (or officials are simply bribed to look the other way) there is really no real incentive to do any thing in sustainable way.
This may be true in some areas but not in the Brazilian Amazon. Most deforestation is done for large-scale cattle ranching, by wealthy investors, although deforestation by poor subsistence farmers is also very important. A growing cause of deforestation is the development of large-scale soybean farms (again by wealthy investors).
From here:
In other words, cattle ranchers are responsible for more than twice the deforestation by subsistence farmers.
In many cases, the long-term value tropical forest land is probably greater when it is kept as forest than when it is converted to cattle or agricultural land. However, one has to take into account many other factors in calculating this value - ecosystem services such as rainfall, prevention of climate change, loss of biodiversity, etc. - rather than the just the possibility of the sustainable harvest of non-timber forest products such as medicinal plants. Since these ecosystem services are externalities - that is, not of direct and clear benefit to those who are doing the deforestation - they are usually not taken into account as a cost.
The influence of the rainforests on world climate is way over-rated.
However, this is not to say that there is a few million other reasons to value the Amazon rainforest far above it’s gross logging cash value. Think biodiversity; once it’s gone it’s gone forever.
While the burning of fossil fuels is a much greater contibutor to atmospheric CO[sub]2[/sub] increase, tropical deforestation is also a significant cause. (One source I checked gave fossil fuel burning as contributing 58%, deforestation (most of which is tropical) as about 17%).
This article gives some estimates of the values of various services of tropical forest land:
“NTFPs” are non-timber forest products, such as medicinal plants, resins, fibers, latex, etc.
From this list we can see that “climate benefits” is about the only value that can compete with logging for tropical forest land. NTFPs are relatively minor. And since climate benefits are externalities, they are rarely taken into account in valuing land use alternatives.
The tropical forests are in equilibrium. There is no net growth, so all the oxigen produced by photosyntesis during the day is consumed by the respiration of plants during the night. The CO2 thus produced is further incremented by Co2 resulting from decomposition of organic material.
I agree that rain forests must be protected for preservation of biodiversity, but not for their climate benefits.
Does anybody knowif the huge investment made by the late D.K. Ludwig in the Amazon region ever paid off? In the 1970’s Ludwig set up a huge pulp paper plantation at Jari, off the Amazon. He tried to plant tropical pines, after the native jungle was burned out…last I heard the investment never paid off…is Jari still functioning?
Has ANYBODY ever been able to farm the Amazon region (profitably)?
When forests are cut and burned, most of the carbon they contained enters the atmosphere. (Even when forests are logged, most of the wood ends up being burned, since most tropical forests contain hundreds of species of trees only a few of which are of valuable for timber.) The “climate benefits” of forests in these valuations are those that accrue from not logging them. That is, logging them produces a “negative” value in terms of climate change that must be offset against the value of conversion (the price of the timber harvested, plus the economic returns of cattle or agriculture on that land).
A great deal of current research indicates that tropical forests are not currently be in equilibrium. Studies indicate that Amazonian forests may be increasing in biomass, due perhaps to increased uptake of CO[sub]2[/sub]. (Of course, because of the very high rate of deforestation, the net amount of carbon contained in these forests is falling overall, even though locally forests are increasing in mass.)
From here
It may also be that as temperatures rise, trees will reach a point at which they can no longer increase photosynthesis, which could also lead to them becoming a net carbon source.
In short, it was a financial disaster, for a variety of reasons. Ludwig was bought out by Brazilian interests. Although the project is still functioning after a fashion, most of the income is going to service the enormous debt.