In Amazon, Money May Grow on Trees After All

The third article in a three-part series exploring the growing pressures facing the Amazon forest and its people. Read part two, "Can Amazonian Beef Be Sustainable?," and part one, "In Brazil, Violence Looms at the Forest Edge."

United Nations Secretary-General Ban Ki-Moon left a meeting last year in Brazil's capital, confident that he could rely on one of that nation's most valuable resources in the fight against climate change: tropical forests. "President Luis Inácio Lula da Silva assured me that the Amazon and its immense treasure chest of biodiversity was the common heritage of mankind and would be preserved," he told the press in November.

But although President Lula has continually supported anti-deforestation efforts during his term, Brazil has so far refused to agree to any binding international emissions limits - mostly because this might diminish Brazil's right to develop the forest-rich Amazon basin.

If Brazil accepts binding emission limits under a new U.N.-sponsored climate pact, the move not only may influence whether the world avoids catastrophic climate change, but also may be the solution to rampant illegal deforestation of the Amazon. As the world debates such an agreement, Brazil is treading carefully. No nation may have more to gain or more to lose.

A Forest Conservation Revival

One of the major outcomes from last December's climate conference in Bali, Indonesia, was a decision to include forest conservation as a tool for reducing greenhouse gas emissions. To address deforestation, which accounts for an estimated 20 percent of global emissions, forest-rich developing countries would sell credits to industrialized nations in exchange for preserving standing forests. The initiative, known as Reducing Emissions from Deforestation and Forest Degradation, or REDD, essentially amounts to a new market that could provide tropical nations with billions of dollars for sustainable forest management.

In Brazil, conservation efforts such as dedicating more land to nature preserves and boosting the military's presence in illegally cleared areas have cut deforestation rates in half between 2004 and 2006. But in the last five months of 2007, as much as 4,345 square kilometers (2,700 square miles) of the massive Amazon forest disappeared, mostly due to expanding cattle ranches. If REDD becomes a reality, Brazil may be able to reduce two-thirds of its annual greenhouse gas emissions, while the Amazon's ranchers, farmers, and indigenous groups may receive the resources necessary to safeguard their forest resources.

Brazil's national leaders currently only accept voluntary conservation donations – for example, financial pledges by Marriott International or Norway – to offset the nation's carbon emissions. They oppose a system that would commit Brazil to having to preserve its forests, even if industrialized nations pay for the conservation. President Lula's government fears that a new forest carbon market would threaten Brazil's sovereignty over the Amazon and its resources, including the right to mine beneath forest reserves, said Claudio Maretti, conservation director for WWF-Brazil.

"They're trying not to accept an international agreement that would be binding with land use definitions," Maretti said. "A stock market in Chicago, London, or wherever would be defining what is the land use in the Amazon, and Brazil would lose its flexibility."

But governors from the Amazon states of Mato Grosso and Amazonas are supporting REDD. In their view, relying on voluntary funding alone would not raise enough money for a shift to sustainable forestry. Based on estimates from the Woods Hole Research Center, REDD funding from private industries and industrialized nations could provide local governments, communities, and indigenous groups in the Amazon more than $531 million within the first 10 years of the program.

Forest Stewards Seek Benefits

In the event such resources become available, landowners have already begun organizing to access the forest conservation funding.

Hundreds of indigenous leaders from 11 Latin American nations came together earlier this month in Manaus, Brazil, to demand inclusion in the process. Indigenous groups in the Americas, and especially in the Amazon, typically have constitutional rights to their land, so they stand to gain much more from a climate agreement than their counterparts in regions such as Southeast Asia. But as stated in a United Nations report released this month, indigenous people have so far struggled to receive climate change-related funding.

"The indigenous people need to understand exactly what is happening to their forests," said Yolanda Hernández, the indigenous representative of Guatemala's Maya Kakchiquel community, in a statement. "They have always been forgotten when it is time for decision-making and time has come for them to be taken into account."

Many indigenous groups need outside support to defend their forests from illegal loggers. Landowners, meanwhile, often need clear incentives to follow the law. Brazilian law requires landowners to preserve 80 percent of the forests on their land. But as the world's appetite for beef surges, it is often more economical for cattle ranchers to ignore the law and move their herds deeper into the Amazon forest than to utilize smaller existing pastures. REDD would in theory pay these ranchers enough for them to practice more sustainable ranching on already forested land.

For such an agreement to be effective, however, Brazil would have to undergo national property rights reform. Current ambiguity over land ownership prevents accurate carbon credit accounting, says Christine Pendzich, deputy director of the forest program at the World Wildlife Fund. "They need to strengthen the agencies that can enforce against land grabbing and illegal deforestation and then clarify this land tenure issue," she said.

Brazil would also benefit from establishing a forestry credit market on the Rio de Janeiro Stock Exchange that would compare to the European Climate Exchange, according to Benjamin Vitale, a Conservation International carbon market expert who advises Latin American nations on REDD. "That would get at the issue of sovereignty because the government would be in control of what [credits] they issue," Vitale said.

If Brazil, home to about 40 percent of the world's forests, reaches an agreement that places a value on protecting this captured carbon, it could provide the world's best scenario to preserve Amazonian biodiversity while also addressing global climate change. But with the scars from their colonial past still felt today, Brazilians will not easily relinquish control of their forested heartland.

"Nobody knows how this will work," says Werner Kornexl, a World Bank forestry specialist, but "the debate is very fierce and very critical for the Amazon."

Ben Block is a staff writer at the Worldwatch Institute who covers everything environmental for Eye On Earth. He can be reached at bblock@worldwatch.org.