Monday, 11 August 2014

What is a resume of the following article? https://www.theedgemarkets.com/article/amazon-burns-230-big-investors-call-firms-protect-worlds-rainforests

While
I cannot provide you with a direct answer to the questionthat is, a summary of the articleI will
provide some facts and leads that will hopefully point you in the right direction and help you
write your answer.

The article deals with the initiative taken by a big group
of investors to protect Amazon rainforests. As many as 230 investors that manage around $16.2
trillion have signed a declaration calling on companies to ensure minimum or no-deforestation
policy.

The burning of Amazon forests has both environmental and economic
consequences. It is easy to understand the environmental consequences of deforestation, in terms
of loss of biodiversity; loss of habitat and food for animals, birds, etc.; reduced oxygen
production and carbon dioxide consumption; etc.

The economic consequences are
a little difficult to comprehend. Deforestation allows the farmers and planners in obtaining
more land for agriculture and development purposes and will result in increased farmer incomes.
However, the long-term scenario may have negative effects due to increased pollution levels and
consequent remediation costs.

From the article, you can gather that while the
governments of the affected regions, including Brazil and Bolivia, have not done much to prevent
the fires (and deforestation; and in some cases may have encouraged it). The investors are
conscious of the negative effects of deforestation and are willing to take steps to prevent
it.

As a responsible citizen, you can think of this as a step in a positive
direction and that hopefully, it will result in firms being proactive in protecting these
forests (and hopefully at other places in the world as well). On the other hand, kindly also
factor in the scenario that farmers in these countries have a right to generate more income and
while it may be easier for investors to push firms towards environmental protection; some
incentives to these countries for protecting the forests are also needed.

You
can think of some incentives such as subsidy, higher purchase price, etc. to demotivate the
farmers from forest burning. You may also wish to include other means through which these firms
can support the environmental cause while ensuring the development of the region and its
population.

Hope this helps.

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