DETER-ing Deforestation in the Amazon: Environmental Monitoring and Law Enforcement

We study Brazil's recent use of satellite technology to overcome law enforcement shortcomings resulting from weak institutional envi-ronments. DETER is a system that processes satellite imagery and issues near-real-time deforestation alerts to target environmental enforcement in the Amazon. We propose a novel instrumental vari-able approach for estimating enforcement's impact on deforesta-tion. Clouds limiting DETER's capacity to detect clearings serve as a source of exogenous variation for the presence of environmen-tal authorities. Findings indicate that monitoring and enforcement effectively curb deforestation. Results hold across several robustness checks. (JEL K32, K42, O13, Q23, Q28, Q54, Q58)