This dissertation studies the feasibility of an environmental services market for legal reserve ground in rural regions of Brazil. The concept was born in an attempt to reconcile two conflicting vantage points manifested in Brazil over the last several decades. On one side of the issue stand the arguments in favor of the preservation of the environment, on the other side is the fact that a significant portion of global food production and the Brazilian GDP is generated by farming and ranching in environmentally sensitive regions of Brazil. In 2012, the New Forest Code, after vigorous debate at the federal level by the executive and legislative branches of the Brazilian government, brought some consensus. Because of this legislation, a consensus has been obtained as to which percentages must be maintained as legal reserve for each specific region of Brazil. In addition, legal space has been created for holding reserve in a ´regime de condomínio´, thus there is the legal possibility of reserve ground being shared. If one area of legal reserve can compensate the usage of a different property, the possibility of a market for environmental services arises. In order to study the feasibility of this market, a model was built based on the current farming and ranching scenario of the state of Roraima in the legal amazon. This study creates an economic model to analyze whether third party legal reserve services would be economically feasible in Roraima or not. A number of residual results surfaced in the course of this research project pertaining to how the environment is impacted by state level environmental policy as well as macroeconomic instability.
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