How to reward tropical forest conservation: Interview with Tasso Azevedo

Faced with the global challenge of ending the deforestation of tropical forests without enough resources for the task, at the end of 2023, the Brazilian government launched a mechanism to encourage forest conservation. How? Creating a payment system per hectare of preserved or recovered forest to those responsible for its preservation. If a hectare ends up deforested instead of preserved, the opposite happens: Landowners no longer receive the equivalent of 100 times the value of the preserved hectare.

“Tropical forests are essential for biodiversity,” Minister of Environment and Climate Change Marina Silva said at the launch of the mechanism at COP28, in the United Arab Emirates. “They are a great repository of countless species and responsible for water balance. We need mechanisms to protect them. In addition to laws, efforts and incentives within each national state, it is essential to have a global payment mechanism for the ecosystem services provided by tropical forests. Around 80 countries that have tropical forests, including vulnerable ones, [must be] paid for each hectare of forest preserved and for each hectare of forest restored,” Silva said.

The Brazilian government estimates $250 billion is needed to launch the initiative, especially from sovereign wealth funds. “Why do we talk about sovereign wealth funds? Worldwide, sovereign wealth funds hold $12 trillion, with the 13 largest funds having eight countries that hold $8.8 trillion. We know that most sovereign wealth funds were capitalized with the sale of oil and fossil fuels,” the Brazilian Forest Service director, Garo Batmanian, explained at the launch of the mechanism.

The figure is just an initial suggestion and there are some criteria for tropical countries to participate in the mechanism, Tasso Azevedo, one of the creators of Tropical Forests Forever, explained to Mongabay. Among them, the country must have low deforestation rates.

Worldwide, news outlets showed interest in the new instrument during COP28, but so far, no country has declared it will join the system. “For this fund to be effective, it must be aligned with countries’ existing environmental legislation,” Mirela Sandrini, director of Forests, Land Use and Agriculture at the World Resources Institute (WRI) Brasil, said in a statement published on the organization’s website. “In the case of Brazil, it is essential that the Fund benefits Indigenous and other local people who are guardians of territories with the largest forest cover and depend on the products and services from the forests. The fund’s focus on protecting the forest area rather than focusing on just avoiding carbon emissions ensures that biodiversity and other ecosystem services are treated as equally important goals,” she concluded.

Creator of the Amazon Fund, which receives donations to support conservation projects in Brazil, Azevedo said that the new mechanism won’t work exactly like fund, but a system that has great potential to preserve the forests of 80 countries around the world. The expectation is that the instrument will already be active at COP30, which will be held in Belém, Pará, in 2025.

Azevedo, 51, is a forestry engineer. In 2003 he was invited by Marina Silva to join the team at the Ministry of the Environment in the first term of President Luiz Inácio Lula da Silva’s government, where he created the Brazilian Forest Service, the National Plan to Combat Deforestation in the Amazon and the Amazon Fund.

Azevedo left the government in 2010, and in the following years launched the Greenhouse Gas Emission and Removal Estimation System and MapBiomas, a research collective that tracks land use changes through satellite imagery, of which he is the general coordinator.

Azevedo spoke with Mongabay on Jan. 17 by video. Check out excerpts from the conversation, edited for clarity.

Mongabay: How did the idea for Tropical Forests Forever come about?

Tasso Azevedo: The original idea was born in 2010, two years after the creation of the Amazon Fund. The goal was to create a mechanism that did not need to demonstrate large-scale emissions reductions to obtain financial resources, as in the case of the Amazon Fund. To encourage forest conservation, but disconnecting it from the carbon issue.

Tropical forests make up 1.4 billion hectares [3.46 billion acres] on the planet and, in addition to being immense carbon deposits, they provide other important benefits, such as keeping the global average temperature 1° Celsius [1.8° Fahrenheit] below, sheltering countless species and being responsible for [the Earth’s] water balance.

With the new government and the return of Marina Silva to the Ministry of the Environment, in 2023, a favorable situation was once again created to raise this conversation, which became a proposal launched at COP28.

Mongabay: What is the concept of the mechanism?

Tasso Azevedo: Tropical Forests Forever will make annual payments to participating countries that conserve or restore their forests. There will be no complex measurements involved, such as carbon absorption, biodiversity conservation or other environmental services. Only preserved forest cover will be considered. Any country with tropical forests — there are 80 in the world — can participate. The goal is to end deforestation by 2030.

It will be an easy-to-implement and very conservation-oriented instrument. There is no need for a baseline [a plan divided into stages, with a timetable etc.] or to calculate a different value per forest.

Mongabay: What will be the basis of payment?

Tasso Azevedo: All hectares of tropical vegetation will have the same value, regardless of whether the forest is in Acre, Brazil, or in Aceh, Indonesia. The important thing is that the hectare is conserved or restored, which will be the standard payment measure.

Mongabay: Has the value per hectare of forest been defined?

Tasso Azevedo: It will be around $30 per hectare preserved. If a country maintained 1 hectare [2.47 acres] from the beginning to the end of a year, it would receive $30. If it conserved 1 million hectares [2.47 million acres], it would receive $30 million. But if it deforests 1 hectare, the equivalent of 100 hectares will be deducted. This is what sets the mechanism apart: If it deforests, the country will have a large discount on what it has to receive for conserving its forests, in a ratio of 1 to 100. It will be a great incentive not to deforest. Either it receives X for maintaining, or stops receiving 100X if it deforests.

Mongabay: Would this value be definitive?

Tasso Azevedo: The suggested value was originally $30, but it could be adjusted more or less during the discussions. In some models, the Ministry of the Environment used $25 per hectare. I like the number 30; it’s easier to do the math and compatible with the values you would expect to receive on the carbon market, although the mechanism doesn’t generate any carbon credits.

Mongabay: What problem is the Brazilian government trying to solve with this mechanism?

Tasso Azevedo: The Glasgow Climate Pact, signed in 2021 by all signatory countries to the Paris Agreement, defined a very objective goal, to reduce carbon emissions by up to 45% by 2030. To achieve this, the pact established guidelines such as the conservation and restoration of ecosystems. Despite this, it has not resulted in large-scale resource mobilization for the protection of tropical forests. Existing resources are insufficient, access is very complicated, bureaucratic, and [have] perverse distortions. For example, in the carbon market that involves REDD+, you have to prove additionality, that is, prove that any reduction in emissions is additional to the reductions that would occur if this project did not exist. Therefore, in areas that have always been protected, as is the case with many Indigenous lands, there is no way to demonstrate this. Those who have deforested a lot, on the other hand, can prove that they reduced emissions by stopping deforestation.

Mongabay: How can tropical forest countries qualify for the money?

Tasso Azevedo: There will be three conditions for them to qualify. Deforestation must be lower compared to the previous year; countries must keep deforestation below the defined rate, for example, less than 0.5% of the country’s forest area; and they must have internal mechanisms so that the majority of resources are allocated to the forest in a ratio of 1 to 100, as explained previously. And use reliable methods of measuring forest cover. If a country does not have a measurement system, it can use a global system. Measuring forest cover is relatively simple and straightforward using remote sensing.

Mongabay: Once a country qualifies, who can participate to be financially compensated?

Tasso Azevedo: Rural producers, private [land] owners, Indigenous people, Quilombolas, state and municipal governments, whoever is managing or protecting forests: Each country will decide.

Mongabay: What would happen if a country, after becoming a participant, saw its deforestation increase to more than 0.5%, for example?

Tasso Azevedo: In the year in which the country does not meet the criterion, it will not receive resources. This makes everyone in the country interested in seeing deforestation fall.

Mongabay: How many countries with tropical forests have mechanisms for allocating the resources that would be gained?

Tasso Azevedo: I don’t know because the mechanism doesn’t exist yet. But I would say that at least half of the 80 countries would have the capacity to create allocation mechanisms in a short space of time.

Mongabay: When will Tropical Forests Forever be officially released? Is there a deadline?

Tasso Azevedo: Ideally, it should be set up throughout this year to start operating in 2025, in order to have an impact until 2030, when the goal is to end deforestation in the tropics. Minister Marina Silva wants the mechanism to be in operation at COP30.

Mongabay: How would the mechanism obtain the financial resources for payments?

Tasso Azevedo: Inflow of resources can originate in several ways. The mechanism could work, for example, with a World Bank investment fund, which raises resources and pays around 3%, 4% per year. The extra profit, the difference in profitability, would go toward paying forest conservationists. An investment fund, however, [starts to work] in the medium term; it takes time to raise money. Therefore, another source of resources prior to the fund, a faster one [to be raised], would be sectoral pledges, commitments from economic sectors to contribute financially to a cause, without necessarily having a return in terms of carbon credits or another type of return.

Pledges could be from any industry — oil, coal, mining, meat etc. There are 1 billion hectares [2.47 billion acres] of tropical forests in the world. Demand would therefore be $30 billion per year [considering $30 per hectare of preserved forest]. In the case of oil, if global production in a given year was $30 billion, and if producers paid $1 per barrel produced, we would have the necessary amount, for instance.

Mongabay: Regarding possible contributors, you gave the example of the oil industry. Although not of the same nature in terms of mechanism, the Amazon Fund is mainly supported by Norway, a large oil producer. Wouldn’t contributions to this global mechanism be an incentive for this industry, in this case, to continue producing fossil fuels? It could claim that the oil money would be contributing to preserving the forests.

Tasso Azevedo: No, because the idea is that it will be temporary, while the trust fund [legal agreement created to manage an organization’s assets], which allows for continuous revenue in the medium and long term, is set up. That would be a pledge for a specific period of time, for example, from 2025-30. It is also worth remembering that it would not generate carbon or biodiversity credits to offset the impacts of those sectors.

Mongabay: Are there already parties interested in contributing?

Tasso Azevedo: The process has not yet reached this stage.

Mongabay: What would be the next step? Which forestry countries have already shown interest in participating?

Tasso Azevedo: From the global society’s point of view, I understand that the next step is to look into the Brazilian proposal to start shaping it and making its implementation viable. According to the Ministry of the Environment, the government has already discussed the issue of setting up the mechanism with the foreign ministers of the eight Amazon countries, of Congo Brazzaville, the Democratic Republic of Congo and Indonesia.

Banner image: Deforestation in the Karipuna Indigenous land, in Rondônia state. The mechanism to be launched by the Ministry of the Environment would financially compensate protected forest areas, such as Indigenous and Quilombola lands. Image © Christian Braga/Greenpeace.

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