Environmental policy and health: Evidence from the reduction of sugarcane burning in Brazil

(Leonardo Cardoso, Deyvid Leite, David Just, Daiana Wischral)

Abstract:  São Paulo, the major sugarcane-producing state in Brazil, commands over a fifth of the world's sugarcane production. This paper explores the health impacts of an environmental policy that has reduced pre-harvest sugarcane burning in the state, the Green Ethanol Protocol. By analyzing birth outcomes, hospitalizations, and mortality data, our preferred estimates suggest that a one standard deviation increase in exposure to the policy caused a 7% decrease in hospitalizations due to respiratory diseases, a 4% reduction in hospitalizations due to circulatory system diseases, and a 14% lower likelihood of birth anomalies. These results are robust across several econometric specifications and remain consistent when excluding data from the COVID-19 outbreak period. We find no clear evidence that the pre-harvest sugarcane burning ban affects birthweight or mortality due to respiratory or circulatory diseases. Based on 2019 costs, we estimate lower bound cost savings from this environmental policy to be 217 million BRL, 54 million USD, between 2011 and 2021, solely in terms of hospitalization costs.

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