The Amazon Fund is one of the main bets of the Lula government (PT) to recompose the budget for environmental inspection, which was paralyzed during the Bolsonaro (PL) administration.
The strategy of the Ministry of the Environment and Climate Change relies on receiving new donations at the beginning of the term to finance the resumption of work by bodies such as Ibama and ICMBio. The strategy takes advantage of the exclusion of international donations from the spending ceiling approved by Congress in the Transition PEC.
Brazil has signaled to international partners that the Amazon Fund is a priority for the new government, precisely because the resources can be allocated to the federal administration itself.
According to sources from the Brazilian government and also from the embassies of European countries, this differential of the fund in relation to other international cooperation projects made it a priority shared both by Brazil and by current and potential donors.
“We will not achieve the climate goals of the Paris Agreement unless we are able to prevent the loss of tropical forests in the world”, said in a note the Norwegian Minister of Climate and Environment, Espen Barth Eide, who is considering making new contributions to the fund.
Germany, the second largest donor, negotiated a new donation contract shortly after the presidential elections. The new contribution, in the amount of €35 million (about R$194 million), was announced after Lula took office, taking advantage of the visit of the German president, Frank-Walter Steinmeier, to the country.
The Minister of the Environment of the United Kingdom, Thérèse Coffey, was also in Brazil earlier this month and visited, in Pará, projects supported by the British government. The Embassy of the United Kingdom in Brazil stated that it is evaluating the possibility of making donations to the Amazon Fund, after having heard the request in meetings with Marina Silva in negotiations at COP27 and also in BrasÃlia.
The proposal of the folder led by Marina Silva is to expand the donor base of the Amazon Fund. Even before taking over the Ministry of the Environment, Marina held bilateral meetings at the UN climate conference with France, Spain, Canada, the United States, the United Arab Emirates and Japan, in addition to multilateral banks and philanthropic foundations of billionaires such as Jeff Bezos and Leonardo DiCaprio.
Although announcements about transfers to the fund have gained political momentum, payments are conditioned to the reduction of deforestation, according to annual rates released by Inpe (National Institute for Space Research). The new donation from Germany, according to sources linked to the government, refers to the results achieved in the years prior to the Bolsonaro government — when the mechanism was suspended and it stopped negotiating new funding.
The decision of the Bolsonaro government to extinguish councils and participatory committees, still in April 2019, led to the paralysis of the Amazon Fund, whose management depends on a guiding committee, with members of civil society, which establishes criteria for the application of resources.
The fund also has a technical committee, which evaluates the basis for calculating emissions avoided by combating deforestation. Fundraising for the Fund is done by BNDES (National Bank for Economic and Social Development).
With the embezzlement in the management, the countries interrupted the transfers and part of the money that was already deposited — around R$ 3 billion — was paralyzed.
President Lula signed, on January 1st, the decree to reactivate the fund, which maintains the mechanism’s original governance and recreates the technical and advisory committees.
Among the 104 projects supported by the fund to date, only 9 are from the Union. However, the values ​​reach a third of the investments. Of the total R$ 1.4 billion disbursed, R$ 521 million went to federal government agencies, such as Ibama, Inpe, Embrapa and the Brazilian Forestry Service.
“A better definition of beneficiaries is important to emphasize the legitimacy of the services provided. For example, support to Ibama is criticized for not meeting the additionality criterion”, notes the 2019 Amazon Fund benefit distribution report. that the support was approved on account of the Expenditure Ceiling PEC approved in 2016.
Since then, the portfolio’s budget has suffered further cuts, and around 40% of the budgets for environmental inspection and fire prevention have come to depend on the Amazon Fund.
Environmental control actions, which involve the repression of crimes, as well as the prevention and fight against fires, are evaluated by the government and by environmentalists as an emergency measure to control deforestation rates —which ended Bolsonaro’s period with values ​​59 % higher than in previous administrations.
Deforestation is the main cause of greenhouse gas emissions in Brazil, which is among the largest global emitters. The country’s goal in the Paris Agreement on climate change includes cutting emissions by 37% by 2025 — a result that the Lula government would like to present, precisely in the year for which the Amazon is a candidate to host the UN Climate COP .
The Amazon Fund mechanism is known internationally by the acronym Redd (Reduction of Emissions from Deforestation and Degradation) and was proposed by Brazil in 2006, at COP12, which took place in Nairobi.
Two years later, the country created by decree the Amazon Fund, which became a reference for the definitions of safeguards of the Redd global mechanism, agreed by the UN in the following COPs.
The arrangement of the mechanism seeks, on the one hand, to encourage the confidence of donor countries about the effectiveness of the application of resources, since they only reach where there are already efforts with proven results.
On the other hand, the design also envisions a way of financing forests without involving the generation of carbon credits (a kind of “right to pollute” traded in carbon markets) for donors. That is, even with foreign incentives, the reductions in emissions are not sold, but accounted for as part of meeting the Brazilian target in the Paris Agreement.
How the Amazon Fund works
Created in 2008, the mechanism relies on donations from Norway and Germany aimed at conserving the Amazon. Payments are voluntary and can be made by other governments as well as companies.
Payment after service
Payments are result-based, which means that the donation only takes place after proof of a drop in deforestation rates, monitored by Inpe. Instead of an investment in the face of a promise of environmental control, the fund works as a reward for the result achieved.
Calculation
The fund established that each conserved hectare is equivalent to 100 tons of carbon stored in the soil and vegetation. The reduction is calculated by comparing the annual rate with the average of deforestation over the last decade. This subtraction results in the basis for raising donations, which are voluntary. The value of donations per ton of carbon varies with each capture period.
BRL 3.39 billion
Since 2008, the Amazon Fund has raised a total of R$3.39 billion in donations. Most came from Norway (R$ 3.18 billion). Germany deposited a total of R$ 192.6 million. Petrobras also donated R$17.2 million to the fund.
where does the money go
The purpose of the fund is to raise money for projects to prevent, monitor and combat deforestation, in addition to actions for the conservation and sustainable use of the Amazon biome, but up to 20% of the resources can be used for other biomes. Projects range from environmental inspection to economic activities that encourage the sustainable use of the forest.
who receives
Projects can be proposed by federal and state governments, by non-profit organizations, multilateral institutions and also by companies.
The Planeta em Transe project is supported by the Open Society Foundations.
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