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This initiative is examining the linkages between land use decisions in Brazil and their impacts on climate and water availability within the Amazon and surrounding regions. Agricultural expansion and other land use transformation is continuing in the Amazon and surrounding regions as global demand for food and biofuel increases and regional economies expand. Analyses indicate that the conversion of forest and cerrado ecosystems to pastureland and agricultural crops creates warmer and drier atmospheric conditions than the native vegetation. In addition, human-induced climate change arising from increasing levels of greenhouse gases is also expected to push the region towards a warmer and drier state. This study will rigorously quantify the key sustainability thresholds for the hydrologic functioning of the Amazon basin and surrounding regions under different land transformation and climate change scenarios, focusing on its impacts on the hydropower and agricultural productivity.