Coefficient of Correlation of Rates of Deforestation to the Price of Soybeans? ... 0.13

[JohnWxy]

http://www.everythingbiomass.org/Portals/EB/Biofuels%20and%20Indirect%20Land%20Use%20Change_Debate%20Sept%2009.pdf#page=21&zoom=100">Chart of Price of Soybeans and Rates of Deforestation


deforest-
ation........ soy
rate......... beans
sq km/yr .. price
29000...... 6.07
18000...... 6.04
16000...... 6.04
25000...... 6.31
15000...... 6.30
27500...... 7.54
18000...... 7.55
13000...... 7.67
13950...... 5.98
13100...... 5.87
14000...... 5.71
11000...... 5.70
21300...... 5.17
18000...... 5.00
17400...... 4.76
17950...... 4.62
17700...... 6.73


coefficient of correlation = 0.134428325


The Hypothesis of Indirect Land Use Change posits that when a quantity of corn is bought (to make ethanol) this drives up corn prices. As prices for corn go up this drives up the price of soybeans which causes soy farmers in Brazil to chop down trees in the Amazon (before illegal lumber operators can get to them, that is).

A correlation coefficient of .13 indicates there is no correlation between the price of soybeans and rates of deforestation.

But then, who cares about empirical evidence from the real world?

[naaman fletcher]

1. Good post but..

Shouldn't one also run it as a rate of change vs. Rate of change, and possibly try a lag on the deforestation rate under the assumption that it might take a while for farmers to react to a price change.

[JohnWxy]

2. I'm just guessing here, but I'm thinking the guy who did the charts at link provided

probably used yearly average prices to go with annual rates of deforestattion (all I've ever seen has been annual rates of deforestation). He would be the source for that info.

since 2004 amazonian deforestation rates have been going down.


http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=115x224081

[JohnWxy]

5. Correlating Deforestation to soybean price with one yr delay gives a correllation of negative .37

http://sites.google.com/site/truthisstrangerthanfictionx/Deforestation_Rate_to_Soybean_Price_1.xls


The excel spreadsheets include graphs of the correlated values too. You can see, especially with the one year delay that there is a tendency for the deforestation rates to go down as the price goes up.


correlating rate of deforestation (for the year the growing season ends) to soybean price gives a Correlation Coefficient of: -0.341484556


correlating rate of deforestation (for the year following the year the growing season ends) to soybean price gives a Correlation Coefficient of: -0.3702501


Now, if you consider a correlation on the order of .34 to .37 meaningful at all, these are NEGATIVE values - just the opposite of what the proponents of ILUC (e.g. Searchinger) contend.

OF course, the idea that someone would go out and cut down an area of rainforest just because soybean prices went up one year is ludicrous anyway. But I just wanted to show what you get if you took the trouble to try and empirically validate this hypothesis.

Actually, it's not really a hypothesis. It's more an article of faith, ... or perhaps 'superstition' would be a better word.

[joshcryer]

3. Cattle farms have been the main reason for most of the deforestation.

Soy never made a dent in it.

[JohnWxy]

4. That's right. The ILUC hyposthesis ignores the widely recognized stronger forces

driving deforestation: Cattle farming and illegal lumber operations. Subsistence farming falls in there too (down a ways from the first two), but as the name indicates, these farmers are growing what crops they can for their own needs. Not for raising cash crops for sale on the market-place. Two other factors growing fast are infrastructure developement (for growing populations) and oil & gas exploration.

Soybeans price affects are miniscule (if anything at all) compared to the factors mentioned. But recognizing this would not enable the ILUC proponents (Searchinger) to arrive at the conclusion they were aiming for.