Ten years on, Amazon Fund receives applause, criticism, faces new tests

It has been ten years since the Amazon Fund was created and became internationally known as being among the first United Nations REDD+ initiatives to provide international funding to projects that successfully Reduce Emissions from Deforestation and forest Degradation.

The major goal, then and now, was to support efforts to reduce high deforestation rates by offering a funded path to sustainable livelihoods for some of the more than 30 million people inhabiting the Amazon basin – Brazil’s portion of the Amazon is 18 million people. Among developed nations, Norway has been the largest funder.

The 2018 decadal milestone offers a good moment to assess what’s been achieved and done well, what could be done better, and the challenges and opportunities that lie ahead, especially as the Jair Bolsonaro government takes charge in Brazil. Most importantly, has the Fund truly helped curb deforestation in the Amazon and has it empowered local communities to create sustainable ways of life and long lasting positive change?

Mongabay spoke to experts to find out and got mixed views. First, a sampling of some of the successes: the Amazon Fund has backed many innovative local projects, including ethnic-environmental protection for isolated or recently contacted indigenous people in the Amazon, as well as forest assistance programs to improve the quality of life for traditional populations living in protected areas. Among its diverse projects are the development of sustainable supply chains for local products, including pirarucu (one of the world’s largest freshwater fish), açaí (a berry-like fruit used in beverages), Brazil nuts, cocoa, vegetable oils, processed timber, and handicrafts, as well as community-based tourism.

“The Amazon Fund was perhaps the main source of resources for society, academia, NGOs, governments,” said André Guimarães, the executive director at IPAM, the Amazon Environmental Research Institute, a scientific, non-governmental and non-profit organization that has worked for the sustainable development of the Amazon since 1995.

Guimarães singled out a project IPAM received support for from the Amazon Fund that aided an agrarian reform settlement, a community of 3,000 families in Pará state. “These people started to be seen as beneficial agents to combat deforestation,” he stressed.

On the downside, environmental organizations that regularly work with forest communities, including IPAM, IDESAM and ISA (the Socioenvironmental Institute, an NGO), have complained about the difficulty in accessing the Fund’s resources.

“There is a need to better radiate the resources to reach smaller forest communities. It is a great challenge to access the Fund and to reach the beneficiaries at the remote communities; it may take several months for a project to be assessed,” said Carlos Koury, executive director at IDESAM, the Amazon Institute of Conservation and Sustainable Development, an NGO established in 2004 and headquartered in Manaus in Amazonas state. He suggests that the Fund should support more creative projects in future, instead of mainly financing initiatives that only offer greater vigilance over illegal deforestation.

NGOs say the biggest challenges ahead center around the scaling up and diversification of projects. The Fund, in Koury’s view, should become more “innovative” by better supporting the development of sustainable economies within forest communities. He points out that the Amazon region accounts for only 8 percent of Brazil’s Gross Domestic Product, while covering more than half the nation’s territory. A dramatic shift in GDP to the Amazon is needed he says “in order to create a forest-based economy.”

The early days

Announced in 2007 by the Brazilian government at the UNFCCC’s (United Nations Framework Convention on Climate Change) COP-13 (Thirteenth session of the Conference of the Parties) in Bali, the Amazon Fund was meant to be a pioneering initiative that would fundraise among developed nations and manage financial resources to reduce forest clearing and support local sustainable projects. The initiative was merit based, with high performance REDD+ projects in the Amazon to be rewarded financially for their work.

The Fund’s implementation was designed by the Brazilian Ministry of Environment and managed by the Brazilian Development Bank (BNDES). Since its operation began in 2008, Norway has been by far the major donor (93 percent), but with Germany (6 percent), and Brazil’s state oil company Petrobras (1 percent) adding to the pot. Together they’ve pledged $1.2 billion in voluntary donations.

“The Fund has probably become, in the past ten years, the most important financial source to combat forest loss [in the Brazilian Amazon] by creating protected areas and improving smallholder farming,” says IPAM’s Guimarães. “We all learnt about how to do strategic planning when submitting our projects to the Fund,” he recalled.

By creating a national framework to garner international resources based on results, the Amazon Fund established REDD+ as a legitimate way of achieving global cooperation to curtail greenhouse gas (GHG) emissions through rainforest conservation.

According to Juliana Santiago, who heads the Amazon Fund at BNDES, Brazil’s large development bank, this was a leading-edge approach back in 2008, when REDD+ policies that emerged out of climate talks were being framed as a way of no longer simply “giving aid,” but offering assistance based on “recognizing the positive results achieved.”

The idea of payments based on results was seen as cutting-edge when the Fund was launched, agrees Guimarães. “We were at the peak of discussions about the role tropical forests could have in mitigating climate change and using REDD+ as a potential mechanism,” to encourage carbon storage.

International cooperation and participative governance were essential in meeting the goal, agreed Santiago: “The Fund would capture resources as a result of collective effort.” At first the initiative relied on a conjunction of two national interests: the aim of curbing deforestation by Brazil and the seeking of an offset for greenhouse gas (GHG) emissions by Norway.

To date, 102 projects have benefited from Amazon Fund resources. Among these, twenty have been concluded, while fifteen projects are having their final results assessed, and five are in the process of calculating their results.

A large sum of money has been dispersed to IBAMA, Brazil’s environmental agency, with R$211 million (US$54 million) targeted at preventing and combatting forest fires, and at monitoring and controlling illegal deforestation by carrying out surveillance and purchasing equipment. From 2016 to 2018, IBAMA carried out 466 missions, totaling more than 92,000 work days, resulting in the issuing of 5,060 notices of forestry violations and imposing fines worth over R$2.5 billion ($650 million).

Another large project resulted in the building of a National Forest Inventory in the Amazon biome by the federal Brazilian Forest, which received almost US$32 million. The Forest Inventory, begun in 2013, is ongoing, and aimed at producing information on forest resources, carbon stocks and how Amazon populations use their territories. As of October 2017, sixty million hectares (231,661 square miles) have been inventoried with the collection of more than 6,000 plants, 1,970 soil samples, 120,000 trees measured, and around 3,300 socio-environmental interviews conducted with rural inhabitants. The resulting vast database could provide a baseline for future conservation work.

Saving the Amazon forest

Covering nearly six million square kilometers (around 2.3 million square miles), and spanning eight countries including Brazil, Peru, Bolivia, Ecuador, Colombia, Venezuela, Guyana and Suriname, the Amazon basin is the largest watershed on the planet, and its forests are the largest remaining carbon storehouse.

Brazil encompasses 65 percent of the basin, an area covering 4.2 million square kilometers (1.6 million square miles) in nine Brazilian states. Importantly for the future of civilization, scientists estimate that the Amazon forest removes two billion tons of carbon from the atmosphere annually, making it a critical hedge against runaway global warming.

However, Brazil is among the ten largest emitters of greenhouse gases in the world, standing behind China, the United States, the European Union, India and Russia, according to Brazil’s Climate Observatory, a consortium of environmental NGOs.

Brazil’s largest source of emissions by far is land-use change and deforestation, particularly in the Amazon rainforest, says Carbon Brief, a UK-based website. Deforestation, agricultural activity and cattle grazing account for 71 percent of the country’s total GHG emissions, around 1.5 billion tons of CO₂ equivalent released into the atmosphere annually.

“Brazil’s gross emissions per capita are still higher than the world average, far-off what is needed to stabilize global warming at a temperature less than 2 degrees Celsius [3.6 degrees Fahrenheit] as stated in the Paris Agreement and, thereby, brake the ongoing climate change that has set the whole planet on alert,” said Tasso Azevedo, technical coordinator at the Climate Observatory.

Brazil pledged in the 2015 Paris Agreement to significantly reduce its illegal deforestation rates in the Amazon by 2030, as well as restore and reforest 12 million hectares (4.6 million square miles) of forest. It is not precisely clear how many square miles would ultimately arise from new tree plantations (an arguably dubious source of carbon reduction since eucalyptus and other plantation trees are regularly cut, releasing their sequestered carbon). The 12 million hectares target corresponds to 60 percent of Brazil’s total estimated degraded land, i.e. 20 million hectares (7.7 million square miles), according to news reports.

The darkest moment for the Brazilian Amazon forest to date came in the early 2000s when the average annual deforestation rates were 19,000 square kilometers (7,300 square miles) annually. Prior to the launch of the Fund in 2008, a massive deforestation prevention effort took place and was able to curb those high rates, bringing them down to around 6,000 square kilometers (about 2,300 square miles) in 2007.

From 2004 to 2017, there was an overall fall of 75 percent in deforestation levels, the equivalent of six billion tons of carbon not released into the atmosphere, according to the Brazilian government. “This amount [is equivalent] to what the European Union emits in a year and a half. It is a very significant amount,” says Santiago at BNDES.

However, in recent years, under the pro-agribusiness presidency of Michel Temer, the deforestation rates have gone up, increasing by 29 percent in 2016 reaching an average of 8,000 square kilometers (around 3,000 square miles) of forest loss every year, the worst index since the creation of the Amazon Fund, according to the National Institute for Space Research, a unit of the Brazilian Ministry of Science.

According to recent figures released in November 2018, the Amazon has seen another rise in deforestation of almost 14 percent. Mongabay also reported that during this year’s presidential campaign the deforestation rate continued its upswing, likely due to the anticipation by entrepreneurs and land grabbers of the election of agribusiness-friendly presidential candidate Jair Bolsonaro.

 Norway reconsiders its contribution

It has been a year and a half since President Temer’s June 2017 trip to Oslo when the Norwegian government announced it would re-examine its commitment to the Amazon Fund based on Brazil’s rapidly rising deforestation.

The Fund celebrated its tenth anniversary this summer at the 2018 Oslo Tropical Forest Forum, hosted by the Norwegian Ministry of Climate and Environment and its Agency for Development Cooperation (Norad). At that event, Norway’s Minister of Environment Ola Elvestuen called the Amazon Fund a “great success” but did not forget to remind Brazil of the risk posed by a continued rise in forest loss.

“If we look at the numbers on how deforestation has slowed in Brazil in those ten years, the Fund has definitely been a success. First, you get the results, then you get the support from us. [But] in the last two years, deforestation numbers were going in the wrong direction. So, we will pay accordingly,” said Elvestuen at a press conference at the Oslo event.

The Norwegian minister enumerated the Fund’s achievements, noting that it has supported the protection of 96 indigenous territories with an area larger than Germany, along with a hundred national parks, while also strengthening Brazil’s environmental police enforcement. “We will continue to partner with countries with strong ambitions and willingness to help them go further.”

But the Temer government seemed to demonstrate little interest in such goals, as it threatened to reduce some conservation areas in size, to curb or eliminate the demarcation of indigenous reserves guaranteed under the 1988 Constitution, and as it slashed environmental agency budgets by half.

Norway has pledged $600 million to the Amazon Fund through 2020. The commitment was first announced during the 2015 COP-21 held in Paris. Since then, the Scandinavian country has transferred around $200 million to Brazil.

Santiago believes that Norway may soon renew its pledge for the post-2020 period: “It is part of a joint bilateral arrangement to keep the forest standing up as an environmental asset not only because of its importance for carbon sequestration but due to its potential for restoring degraded land. I am an optimist regarding the future and the protagonist role the Amazon may play,” said the head of the Fund.

Brazil retreats from deforestation goals

A major criticism posed by the international community against the Brazilian government, is that the Amazon Fund has become almost the only means to finance deforestation measures, largely due to the draconian budgetary cuts by Temer to IBAMA (the Brazilian Institute of Environment and Renewable Natural Resources, responsible for deforestation law enforcement) and ICMBio (the Institute for Biodiversity Conservation, which oversees enforcement within national parks).

For now, 38 out of the 102 projects that have been supported by the Fund belong to government entities – including federal agencies like IBAMA, and other state and municipal level institutions. Although the public sector represents one third of the supported projects, it received 65 percent of the Fund’s money. Out of the US$1.2 billion pledged, US$440 million has been disbursed so far and a great portion of these resources went to governmental activities, US$286.7 million.

This leaves a share of $153,3 million for 64 projects managed by NGOs and universities that foster local community sustainable production and supply chains for forest products.

Despite recent setbacks, for IPAM’s Guimarães, the worst case scenario would have been if no resources had ever been available to tackle the criminal activities that were devastating the rainforest from 2008 until now. “When you need money to combat deforestation, you use the resource that is at hand and available, in this case the money was from the Fund. The worst would be not doing anything,” he stated.

On the other hand, Koury from IDESAM noted that Brazilian government policies and finances addressing Amazon conservation and social development were inadequate to begin with, and have suffered further contraction with the Temer administration’s increasing withdrawal of public resources: “The [Amazon] Fund has evolved, but [it] should [only] play a complimentary role in the [Brazilian] government’s agenda, and [the Fund] should not address the great part of its resources to policies that should have their own [government] budget,” he said.

For many years, Brazil’s national environmental policy has been based on the so-called “command and control” mechanism with state penalties for those who infringe the law. But a disordered and chaotic land ownership policy in the Amazon, compounded by the rapid expansion of the agriculture frontier and the invasion of industrial agribusiness, have challenged authorities to do a better job of monitoring deforestation and enforcing the law.

There are also deep doubts among analysts about Brazil’s commitment to its expressed deforestation goals, based on rampant corruption, legislation favoring agribusiness over the environment, and the system-wide failure to collect deforestation fines.

“If we only focus on command and control, it will not be enough. If you do not offer economic activities that are sustainable, it will be difficult to end deforestation. We are talking about more than 20 million people depending on the forest for their survival. You need to promote a [sustainable] development agenda to the region. The Amazon Fund should not be the only mechanism to finance sustainable projects in the Amazon,” said Koury.

Still, some remain hopeful. In December 2017, IDESAM was granted R$12 million (US$3.2 million) to strengthen community forest management in Brazil by producing and commercializing wood products and vegetable oils. Named ‘Cidades Florestais’ (Forest Towns, in English), the three year project will benefit communities spread over fourteen municipalities in Amazonas state and provide information and technological tools to assist in sustainable production and forest management.

Since 2011, IPAM has also been granted resources from the Amazon Fund for a project known as Assentamentos Sustentáveis (Sustainable Settlements) that received R$25 million (US$6,7 million). It ran from 2012 and 2017 in three agricultural settlements in Pará state. The project implemented a model of sustainable agricultural production on small rural properties and improved the land-title situation enhancing local families’ incomes.

“We worked in an area of 1.4 million hectares [5.4 thousand square miles] in the western portion of Pará state, a hotspot targeted by gold miners and infrastructure projects. The 3,000 families increased their income by 68 percent and contributed to braking deforestation by 79 percent in [the project] area. This shows it is possible to raise smallholders’ income and reduce rainforest devastation at the same time,” said Guimarães.

IPAM’s director sees the scaling up of such projects as a great challenge for the Amazon Fund. “We need to transform the good results into public policies, and to offer credit systems that are appropriate for farming in the Amazon,” he suggested. Moreover, there is a need to partner with research centers that could offer ecological solutions, Guimarães said, adding that private sector involvement would offer an extra boost. “We need to engage private investors and large landowners to invest more and sustainably. An instrument like the Amazon Fund could be an important player to leverage private resources in sustainable activities in the Amazon,” he concluded.

The Bolsonaro factor

Ten years on, there is a storm cloud on the near horizon. The global environmental community is gravely concerned about the newly-elected government of Jair Bolsonaro, which takes over in January 2019. The fear is based on Bolsonaro’s inflammatory rhetoric which seems to indicate that his administration could turn its back on the international community and Brazilian sustainability goals as addressed by the Amazon Fund.

Bolsonaro has repeatedly shown disdain for all efforts to conserve the Amazon rainforest, urging the development of indigenous lands by agribusiness and mining, which should he said, be accomplished “in partnerships with democratic countries such as the United States.” He has also threatened to withdraw Brazil from the Paris Climate Agreement, though has backed off from that position.

During Bolsonaro’s campaign, more than thirty social and environmental entities, including Climate Observatory, SOS Mata Atlântica, Greenpeace and ISA, released a public manifesto in defense of the Ministry of Environment which the candidate said he planned to fuse with the Ministry of Agriculture. The organizations warned that the weakening of the ministry could result in an “explosion of the deforestation rates and put at risk four decades of advances in the protection of the environment.”

Previously, around 3,000 NGOs repudiated Bolsonaro’s call to “put an end to all activism in Brazil,” while also condemning his rhetoric damning environmental and indigenous policies as “obstacles to the development of the Amazon.”

The coordinator of Climate Change at WWF Brazil, André Nahur, has stressed publicly that the newly elected president should recognize the key role of the environment in the country’s economic growth. “Our natural resources provide environmental services that ensure that important sectors in the country, such as agribusiness and energy, continue to produce and contribute to the Brazilian GDP.” Almost 20 percent of the Amazon forest disappeared in the past fifty years, according to the latest WWF “Living Planet Report 2018.”

Greenpeace also released a statement, urging Brazil’s future president to “commit to a Zero Deforestation policy instead of weakening environmental protections to make way for more industrial cattle grazing and farming.”

Asensio Rodriguez, Greenpeace Brazil executive director, warned that “international markets don’t want products coming from countries that contribute to warming the planet. Nature is not a resource for profit, it is a way to guarantee future generations’ lives are safe.”

Guimarães believes it is up to civil society to react against the new government’s attempts to relax environmental legislation.

On November 12 a member of Bolsonaro’s transition team declared that international organizations had no right to tell Brazil what it ought to do environmentally: “The Norwegians should learn from the Brazilians” on how to preserve forests, said Onyx Lorenzoni. In response, the Norwegian ambassador in Brasília, Nils Martin Gunneng said that Norway has learnt with Brazil’s experience, and invited Lorenzoni for an embassy meeting to discuss cooperation.

Toward a forest-driven sustainable economy

A scientific study published in Nature on November 13 demonstrated that Bolsonaro’s proposed policies could actually cost Brazil many billions every year, tearing the heart out of the nation’s economy.

While standing, Amazon forests boost the country’s economy, contributing an estimated US$8.2 billion in environmental benefits every year. O the other hand, deforesting, could lead to a US$422 million drop in domestic agricultural production annually, according to the study whose lead authors were Jon Strand from the Development Research Group of the World Bank, and Britaldo Soares-Filho from Brazil’s Center for Remote Sensing at the Federal University of Minas Gerais (UFMG).

The report was the first to quantify the economic benefits of Brazilian ecosystem services to the nation’s people. The economic value of forests was estimated based upon sustainable food production (such as Brazil nuts), raw materials (such as natural rubber and timber), carbon storage, and climate/rainfall regulation which serves agribusiness.

The researchers found that the deforestation of a single hectare in some regions can generate annual losses of up to $40 for Brazil nut production, and $200 for sustainable timber production – that’s a massive potential loss when extended over millions of hectares. The study group has launched a user-friendly interactive platform to provide a tool for policymakers in assessing the differentiated values for conserving the Amazon.

Noted Brazilian climate scientist Carlos Nobre, one of the lead authors of the 2007 IPCC fourth Assessment Report, has warned that large portions of the Amazon rainforest could be approaching a tipping point of irreversible change, in which deepening drought could convert the forest into savanna.

“Science is telling us that we have to come up with a new sustainable pathway for the global tropics. We have few years left to turn deforestation rates down and to commit to major restoration of the global tropical forests,” Nobre told journalists at the Oslo Forum last summer. The scientist has been doing Amazon research for more than forty years.

He urged his nation and the world to move quickly to find creative and sustainable ways to explore the economic potential of biodiversity. “We have to think of a [new] way of development that includes innovation, science, technology, traditional knowledge, [while] tapping into the biodiversity. We have to develop a standing forest bio economy – a biodiversity driven economy.”

Whether Brazil will embrace these sustainable Amazon forest goals, or surrender to the aggressive development agenda of agribusiness and mining interests under a Bolsonaro government, remains to be seen. And while Norway, via the Amazon Fund, has some financial leverage in the matter, the arrival of China, an economic development juggernaut, in South America and Brazil, does not bode well for forests or for the next ten years of the Amazon Fund.

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