LAUSR

With rapid population growth comes the ever-important task of meeting the energy demand that this growth requires, and many of the world’s tropical regions have turned to hydropower to address the challenges associated with increasing energy consumption. Hydropower is an important energy policy issue in Brazil, and it is promoted as the preferred electricity option, because it is the least expensive in terms of long-term returns on investment; the Belo Monte dam in Northern Brazil provides an opportunity to study the effects of large investments in hydroelectric infrastructure on the surrounding local population. Using a matched panel data spanning 10 years (2005 to 2015), we study the impacts of Brazil’s Belo Monte dam on cocoa and other food crop producers in the region. We find that households have seen a decline in rural employment opportunities, and despite improvements in cocoa productivity households have experienced declining food production. With the construction of the dam largely completed, farmers must now face the challenges of decreased food access and shifts in employment opportunities, and while there are many advantages and opportunities associated with this new development, special policy considerations are necessary to ensure that there are safety nets in place to assist those who will see a decline in access to economic opportunities.