Brazilian president Luiz Inacio Lula da Silva last week announced that the government would allow "sustainable" logging within 3% of the Amazon rain forest. The objective of the law is to reduce illegal logging while giving rural Brazilians employment. The plan is also aimed at generating revenue for forest management and protection.



Logging licenses will be restricted to private Brazilian companies, and by changing logging patterns, it is hoped that less damage will be done to the rain forest.

Current illegal logging practices, which account for most of the production, pay little heed to environmental regulations. A 2005 study found that "stealth logging" -- the selective logging of mature trees carried out under the protective canopy of the forest -- causes considerable damage to the forest.

In fact the study found that such selective logging is almost as harmful as if the forest was just cleared. Selectively logged areas are up to 8 times more likely to be settled and eventually cleared because of the access roads that are cut into the forest.

Logging itself is not thought to be the main cause of deforestation of the Amazon rainforest. That honor goes to agricultural expansion -- cattle ranching, soybean production and subsistence farming.

The Amazon area has lost more than 132,000 square kilometers of rainforest since the end of the 1990s.

The hope is that Brazilian firms will be able to operate profitably in the Amazon without damaging or diminishing the forest. Given the importance of the Amazon district to the ecology of the entire world, this is an experiment that all of us should hope will be successful.

**Brazil automakers sustained by exports

Although the Brazilian domestic market for new automobiles was down slightly in February, exports increased, keeping the overall level of vehicle production moving upwards. February production was up 3.3% over January and 3.9% over February of 2005.

Analysts had expected exports to decrease as the value of the Brazilian real strengthened. The real has gained almost 25% against the U.S. dollar since the beginning of 2005. But, in fact auto exports increased -- a sign that the Brazilian economy is stronger than expected.

Although domestic auto sales were down by 3.8% from January, this is an increase of 11.3% over February 2005.

Flex-fuel vehicles continued to be the biggest sellers, accounting for 93,000 or 76.6% of the total sales. Flex-fuel vehicles run on any combination of gasoline and ethanol.