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Market News

 June 29, 2016
Proposed Amazon dam would fuel land speculation, deforestation, study says

 A proposed dam in the heart of the Amazon will lead to a wave of deforestation as remote areas of the world's largest rainforest are opened to agriculture, said a study from Brazilian researchers published on Tuesday.

Local businesses with contracts to help build the proposed Tapajos dam complex are likely to use their profits to buy land in the Amazon for soy farming or cattle ranching, said the study published by the Federal University of Western Para in northeastern Brazil.

Such land purchases would increase deforestation as developers push into the jungle, also imperiling the land rights of Munduruku indigenous people who live there, it said.

New waterways and other infrastructure created after damming the Tapajos River would make it easier to turn forested land into plantations, said Philip Fearnside, a professor at the National Institute for Amazonian Research and one of the study's authors.

"A lot of the land in the Amazon doesn't have a legal title," Fearnside told the Thomson Reuters Foundation. "There would be a tremendous windfall for the people who claim that land."

Speculators would likely move onto untitled land and cut down trees to stake a claim of ownership, he said. "The social and environmental impacts would be huge."

Supporters say rising land values associated with the dam would increase agriculture, creating jobs and boosting exports.

With Brazil facing a severe recession, backers of the dam say new investments are needed to boost hydro-electricity production and farming.

Hydroelectric power plants produce about 80 percent of Brazil's electricity, and supporters say dams help combat climate change by producing renewable energy.

The proposed dam would flood an area about the size of New York City, disrupting the livelihoods of indigenous groups and other communities who depend on the river for fishing, the study said.

Concerns over indigenous land rights led Brazil's environment agency IBAMA to suspend construction permits for the dam in April.

About 150,000 people would be directly affected by the proposed project, Juan Doblas, a technical advisor who worked on the study, told the Thomson Reuters Foundation. (Reporting by Chris Arsenault, Editing by Ellen Wulfhorst. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, women's rights, trafficking and climate change.