Abstract
Deforestation, driven by industrial agriculture and cattle farming, has significantly impacted communities and ecosystems across the globe. In this paper, we develop a discrete-time Markov model to evaluate the effectiveness of market-based interventions, such as payments for ecosystem services (PES) and taxes, in addressing forest loss within the context of large-scale agriculture. Specifically, we focus on how commodity price variability influences deforestation decisions. To model these price fluctuations, we represent agricultural prices as geometric Brownian motion (GBM). By linking commodity price dynamics to land use transitions, our model aims to provide insight into how financial mechanisms can slow or stop deforestation. We find that the structure of the implemented policies have a large effect even if the total dollar amount across different structures were to remain constant. Therefore, decision makers should carefully choose the structure of their policies depending on their objectives with regards to poverty alleviation, deforestation prevention, and reforestation incentives.
Recommended Citation
Brame, Karma; Calderon, Wendy; Clark, Kaylee; Hiller, Josh; and Negrete, Natalia
(2026)
"A Doubly Stochastic Model of Government Interventions to Preserve Ecosystems Services in the Context of Large-scale Industrial Agriculture,"
Spora: A Journal of Biomathematics: Vol. 12, 76–89.
DOI: https://doi.org/10.61403/2473-5493.1118
Available at:
https://ir.library.illinoisstate.edu/spora/vol12/iss1/6
