Sara R. Leal*
The Legal Amazon has 9 million hectares that can be legally deforested on private properties, according to analysis by IPAM (Amazon Environmental Research Institute). This area is equivalent to the size of the state of Santa Catarina. To curb legal deforestation in Brazil, a new article published in the international scientific journal Frontiers presents three scalable business models.
“We need to stop all types of deforestation, legal and illegal. If we don’t expand the range of resources available for conservation, through incentives, the planet’s food security could be compromised,” points out André Guimarães, executive director of IPAM and one of the authors of the study.
Native vegetation is responsible for ecosystem services needed by the agricultural system, such as climate regulation. For every degree increase in temperature, soybean production could fall by 6%, while corn production could fall by 8%. In addition, changes in climate are associated with the occurrence of extreme events and the disruption of rainfall regimes, which results in losses for agricultural production.
The study is the result of the experience with CONSERV, an IPAM initiative which, between 2021 and 2024, guaranteed the conservation of 20,707 hectares of native vegetation in the Brazilian Amazon and Cerrado.
For four years, landowners received an annual payment, proportional to the hectare of native vegetation voluntarily preserved (i.e. above that required by the Brazilian Forest Code).
With the findings and lessons learned, a conceptual framework was developed, complemented by the methodology tested in the field, and a set of paths for private investors and public managers to scale up.
“The construction of the models was participatory, involving consultations and conversations with rural landowners. From this dialog and maturation, we arrived at the three models presented in the article,” explains Álvaro Batista, a researcher at IPAM and one of the authors of the study.
Financial incentives for valuing forest assets
The first model mentioned in the article is carbon credit. In this case, CONSERV would take advantage of the development of carbon markets to attract resources for conservation.
Payments would be made in exchange for protecting or increasing carbon stocks in native vegetation. Buyers of carbon credits would pay for the greenhouse gas emissions avoided, either through voluntary commitment or compliance with regulatory policies.
The second model is related to the commodities sector. The subsidy could take the form of pre-competitive financing by commodity traders seeking to guarantee market access and reduce climate impacts; or post-competitive financing in the form of an aggregate price for agricultural products differentiated by the zero deforestation practices of CONSERV producers.
Thirdly and finally, the sustainable credit model proposes to compensate CONSERV participants for protecting their legally deforested forests by providing access to loans on more favorable terms.
Easier access to credit lines would replace direct payments per hectare to farmers. These investments would increase the farm’s overall profits in the long term, while reducing the pressure for future deforestation.
According to the authors, combining some or all of the proposed mechanisms could create a flexible and resilient program with the capacity to expand.
“There is a sense of urgency and a need for innovation to value those who keep the forest standing. These are possibilities that we propose to neutralize legal deforestation and, in doing so, preserve the resilience of agriculture for the future,” adds Guimarães.
