The potential loss or large-scale degradation of the tropical rainforests has become one of the iconic images of the impacts of twenty-first century environmental change and may be one of our century's most profound legacies. In the Amazon region, the direct threat of deforestation and degradation is now strongly intertwined with an indirect challenge we are just beginning to understand: the possibility of substantial regional drought driven by global climate change.

Some model experiments predict a large-scale substitution of Amazon forest by savannah-like vegetation by the end of the twenty-first century. Expanding global demands for biofuels and grains, positive feedbacks in the Amazon forest fire regime and drought may drive a faster process of forest degradation that could lead to a near-term forest dieback. Rising worldwide demands for biofuel and meat are creating powerful new incentives for agro-industrial expansion into Amazon forest regions. Forest fires, drought and logging increase susceptibility to further burning while deforestation and smoke can inhibit rainfall, exacerbating fire risk. If sea surface temperature anomalies (such as El Niño episodes) and associated Amazon droughts of the last decade continue into the future, approximately 55% of the forests of the Amazon will be cleared, logged, damaged by drought or burned over the next 20 years, emitting 15–26 Pg of carbon to the atmosphere. Several important trends could prevent a near-term dieback. As fire-sensitive investments accumulate in the landscape, property holders use less fire and invest more in fire control. Commodity markets are demanding higher environmental performance from farmers and cattle ranchers. Protected areas have been established in the pathway of expanding agricultural frontiers. Finally, emerging carbon market incentives for reductions in deforestation could support these trends.

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