Deforestation is a process where forested areas are cleared, often for agriculture, urban expansion, or industrial use, leading to significant economic, social, and environmental consequences. In the framework of ecological economics, which integrates ecological constraints and sustainability into economic analysis, deforestation is considered not only a private cost issue but also one with significant external costs. Marginal External Cost (MEC) refers to the additional cost imposed on society that is not borne by the individual or firm causing the deforestation. It reflects the negative externalities that arise from forest loss, including biodiversity decline, carbon emissions, soil erosion, disruption of water cycles, and social impacts on local communities. A relevant case study to illustrate the MEC of deforestation can be drawn from the Amazon rainforest in Brazil. The Amazon, often called the "lungs of the Earth," is a critical carbon sink and a biodiversity hotspot. Local farmers and large agribusinesses often clear forests for cattle ranching and soybean cultivation. The private cost of deforestation includes expenses related to land clearing, labor, machinery, and immediate productivity gains from agriculture. However, the marginal external cost goes far beyond these private costs. As each hectare of forest is cut, society faces additional costs, such as increased greenhouse gas emissions, loss of habitat for countless species, and disruption of local and global climate regulation. For instance, when a hectare of forest is cleared, carbon stored in trees is released into the atmosphere as carbon dioxide, contributing to global warming. The cost of these emissions, quantified in terms of damage to agricultural productivity, health impacts, and climate mitigation efforts, represents a significant portion of the MEC. Studies in the Amazon suggest that the social cost of carbon emissions from deforestation can be substantial. If one hectare of rainforest releases approximately 200 tons of CO₂, and the social cost of carbon is estimated at $50 per ton, the external cost of that hectare due to emissions alone would be $10,000, which is not accounted for in the private profit gained by the landowner. Beyond carbon emissions, deforestation leads to soil degradation, which increases the likelihood of landslides and reduces the fertility of surrounding agricultural lands. These effects impose costs on