- The CONSERV payment for ecosystem services program pays landowners in the Amazon and the Cerrado savanna to protect forests they are legally allowed to convert into plantations or pasture.
- The program’s pilot phase has avoided over 30,000 hectares (around 74,130 acres) of legal deforestation in the states of Mato Grosso, Pará and Maranhão. Across Brazil, millions of hectares of forest on private land are at risk of being legally cleared.
- The Amazon Environmental Research Institute (IPAM) is now looking to scale up the project and is evaluating mechanisms that could fund the payments without relying on donations.
- One solution could be combining the sale of carbon credits, price premiums for commodities and access to cheaper credit to provide long-term incentives for landowners to conserve these forested areas.
Landowner Carlos Roberto Simonetti gets three harvests per year from the corn, soy and cotton plantations on his 17,000-hectare (about 42,000 acres) farm called Fazenda Natureza Feliz, or Happy Nature, in the Brazilian state of Mato Grosso.
Over the course of four years, he would also get what he calls a fourth harvest, this time from the forested areas of his property, located where the Cerrado savanna meets the Amazon Rainforest.
That’s because Simonetti would receive regular payments for protecting native vegetation beyond what the law requires, as part of a pilot project for payment for ecosystem services (PES) run by the Amazon Environmental Research Institute (IPAM), an NGO, in the states of Mato Grosso and Pará.
The program, called CONSERV, gives landowners financial incentives to keep the forest standing even in areas which they are legally allowed to clear.
The pilot project, which initially ran between 2020 and 2024 on 23 different properties, protected 20,707 hectares (about 51,170 acres) of land in the Cerrado and Amazon biomes with funding from the governments of Norway and The Netherlands.
Ongoing contracts funded by Soft Commodities Forum members – agribusiness companies committed to preserving the Cerrado – are protecting a further 7,000 hectares (about 17,300 acres) in the states of Mato Grosso and Maranhão. IPAM is now seeking to scale up the program without relying on donations.
The risk of legal deforestation
The idea for CONSERV goes back to 2016, when an internal IPAM report calculated that around 1.5 million hectares (3.7 million acres) of Mato Grosso’s Amazon was at risk of being legally cleared, IPAM’s executive director André Guimarães told Mongabay in a video interview.
“We thought, if we don’t do anything, those one-and-a-half million hectares will be deforested,” he said.
According to data from research network Mapbiomas, nearly 70% of deforestation alerts in Brazil in 2024 were on private land. Recent research found that 3.6 million hectares (8.9 million acres, ) – an area larger than Belgium – were cleared with permits in the Cerrado and the Amazon between 2008 and 2024, although a majority of the deforestation is illegal. This makes up 14% of the total deforestation.
Brazil’s Forest Code, legislation regulating forest conservation, requires landowners to protect a minimum percentage of their property, ranging from 80% in the Amazon to 20% elsewhere. Any native vegetation preserved beyond this minimum is known as the ‘legal reserve surplus’ and can be legally cleared with permits by landowners, usually for crops or cattle.
In the Legal Amazon, which spans nine Brazilian states in the Amazon basin, 9 million hectares (22.2 million acres) fall under this category, Guimarães said. In the Cerrado, where private properties account for nearly 90% of the biome, estimates put the legal reserve surplus at between 28 and 38 million hectares (69-94 million acres), according to Julia Mangueira, conservation director for the Cerrado at The Nature Conservancy Brazil.
“There is an enormous amount of native vegetation that could be legally converted. If that happens, we can imagine what it would mean for biodiversity, climate regulation, temperature increase, the maintenance of water resources,” said Mangueira, who is not involved in CONSERV.
Such deforestation, in turn, poses a risk to Brazil’s agricultural sector, and therefore global food security, said Guimarães.
Payments for preservation
CONSERV’s pilot project worked with medium and large properties, ranging from roughly 5,000 to 15,000 hectares (about 12,350-37,000 acres), Guimarães said. The voluntarily protected area for which the landowner received compensation tended to be between 500 and 1,000 hectares (about 1,200-2,500 acres), he said.
Before signing a contract with landowners, IPAM carries out due diligence, which is confirmed by a third party, to ensure that partner properties are compliant with the Forest Code and other aspects of the law. Landowners are also required to present a fire management plan.
Throughout the duration of the contract, IPAM analyzes satellite data every three months to ensure no native vegetation is cleared and sends inspection teams on the ground if there is any discrepancy. There are penalties for offenders.
During CONSERV’s pilot phase, landowners were paid twice a year for their legal reserve surplus. Payment is calculated based on the area’s deforestation risk, the value of the environmental services it provides, and the cost of land per hectare.
Simonetti, who has 4,000 hectares (9,884 acres) of legal reserve surplus, said he received between R$250 and R$400 (US$50-79) per hectare. He said he used this revenue to improve and maintain his productive areas.
The extra income is not the only benefit. “Fires stopped after we got the project. It was an education for us,” said Simonetti. CONSERV also created closer ties with participating neighbors, he said.
IPAM found that fires had indeed diminished when it compared CONSERV properties with others nearby, Guimarães said. Farmers also reported seeing more wildlife and receiving more rain, he added.
Scaling up the PES model
“The initial challenge was to convince landowners. The challenge now is to give it scale, and to give it scale you need a lot more resources,” said Guimarães.
A paper he co-authored, published earlier this year, outlines three different mechanisms that could fund CONSERV at scale and in the long term.
The first would be through the sale of carbon credits; the second, through payment premiums, where traders would pay a higher price for products from CONSERV properties, which are compliant with the European Deforestation Regulation’s (EUDR) land conversion requirements, for example; and the third, through access to discounted loans. Public and private actors could play a role in all three mechanisms.
Brazil has a national policy for PES established in a 2021 law, which allows payments to be monetary or to take the form of other incentives, said Eduarda Thuler, economy and finance manager for nature at the World Resources Institute Brazil.
The success of a PES program depends on the reliability of the resources to guarantee regular payments, and the model’s capacity to be replicated, said Thuler. “One of the things we lack today is regulation that would standardize the calculation [of the value of the payment],” she said.
“Carbon credits could help, because they offer income predictability,” she said. “The problem is how you guarantee these credits’ integrity.”
A series of scandals have dented the reputation of carbon credits, particularly those from avoided deforestation, while calculations for carbon capture in the Cerrado are more complex than in the Amazon.
Guimarães said that potential credits generated under the CONSERV program would provide additionality because they would come from forests which are at risk of being converted. Their longevity could be guaranteed by designating the area a private reserve (RPPN), a type of permanent conservation unit.
“There are mechanisms within Brazilian law that guarantee the permanence of the protected forest,” said Guimarães.
But the return from selling carbon credits would not be enough to cover the opportunity cost, he said.
“A combination of all three [mechanisms] appears to be the most viable,” said Guimarães, adding that IPAM is currently evaluating their feasibility.
The involvement of the Soft Commodities Forum in the pilot phase indicates interest from traders in the program, Guimarães said, while there are a number of existing initiatives that successfully condition credit or other financial instruments to environmental protection.
Mangueira said “Deforestation is a complex problem so you’re not going to be able to address it with a single solution, you need a combination of incentives.”
On the Fazenda Natureza Feliz, Simonetti has maintained his legal reserve surplus since the payments stopped and said his neighbors have too – for now.
“I have children, grandchildren, I want to leave this forest for them,” he said, adding that he is counting on the CONSERV payments resuming once a new source of funding is found. If they don’t, the landowners will probably start clearing their legal reserve surplus, Simonetti said. “You need a diagnosis [to legally deforest]. Everyone is doing the diagnosis to have the paperwork ready,” he said. “Without a project of CONSERV’s scope, the standing forest doesn’t yield any return for us.”
Banner image: Conserved forested areas in Fazenda Natureza Feliz in Mato Grosso. Courtesy of Carlos Roberto Simonetti.
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