We study the consequences of poverty alleviation programs for environmental degradation in Mexico. We exploit the community-level eligibility discontinuity for a conditional cash transfer program to identify the impacts of income increases on deforestation, and use the program’s initial randomized rollout to explore household responses. We find that additional income increases demand for resource-intensive goods. The corresponding production response and deforestation increase are more detectable in communities with poor road infrastructure. These results are consistent with the idea that better access to markets disperses environmental harm and the full effects of treatment can only be observed where poor infrastructure localizes them.