Positive externalities and costs of protected areas in areas of sugarcane production

• Grant number: 11/14794-3
• Support Opportunities: Scholarships in Brazil - Scientific Initiation
• Start date: December 01, 2011
• End date: November 30, 2012
• Field of knowledge: Applied Social Sciences - Law - Public Law
• Principal Investigator: Flavia Trentini
• Grantee: Carolina Costa de Aguiar
• Host Institution: Faculdade de Direito de Ribeirão Preto (FDRP). Universidade de São Paulo (USP). Ribeirão Preto , SP, Brazil

Abstract

The existence of protected areas within the rural property promotes collective benefits, that contribute to the preservation of the environment. Private action takes place the increase social welfare, what is called positive externalities. The study seeks to analyze the transaction costs associated with these externalities, since the market does not carry the necessary information in order that the positive externalities should be perceived by economic agents and consumers, and how it reflects on the issue of protected areas within the agricultural area. For this purpose, the paper is used as the theoretical basis for Environmental Law and the New Institutional Economics (NIE). The NIE provides the analysis of transaction costs resulting from the interference of Environmental Law in economic activity, as Environmental Law tries to organize the way in which society uses natural resources, setting limits such as protected areas. The methodology used in the literature and case study research. The unit of analysis of the case study is a sugarcane processing mill, due to the expressiveness of the sugarcane industry, which uses much of the country for production, and the increasing importance of industry and biofuel ethanol. Ethanol is a good whose information about the production process is difficult to consumer obtain, resulting in an asymmetry of information and costs that affect economic efficiency. Thus, we study the behavior of economic agents in the face of positive externalities and costs derived from protected areas, so you can understand whether the internalization of externalities allows lower costs, and thus enables environmental protection.(AU)