TY  - RPRT
        AU  - Mata, Daniel Da
AU  - Dotta, Mario
AU  - Severnini, Edson
        TI  - Industrial Activity, State Capacity, and Deforestation: Evidence from Brazil
        PY  - 2026/Mar/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 18380
        UR  - https://www.iza.org/index.php/publications/dp18380
        AB  - Does industrial activity drive deforestation and land degradation, and can limited state capacity be overcome to decouple economic growth from environmental harm? We examine these questions in the context of slaughterhouse plant openings in Brazil from 1994 to 2019. Guided by a simple conceptual framework and using a staggered difference-in-differences approach, we show that plant openings increase livestock production while reducing forest cover and degrading pastureland. However, following the introduction of legally enforceable, incentive-compatible agreements between slaughterhouses and federal prosecutors—which penalize purchases of livestock from illegally deforested areas but act as a green certification mechanism—plant openings increase productivity without driving deforestation. Our findings suggest that tying firm performance to environmental goals through market-aligned legal mechanisms can generate economic and environmental gains at low cost to the government.
        KW  - industrial activity
KW  - slaughterhouses
KW  - deforestation
KW  - land degradation
KW  - state capacity
KW  - green certification
        ER  -