How market forces could end Amazon deforestation

Steve Schwartzman

Editor’s note: This post was updated on April 26, 2018.

There has been a lot of talk about deforestation in the ongoing international climate talks, and it’s no mystery why: Tropical deforestation and forest degradation account for as much as 19 percent of global greenhouse gas emissions today. 

The good news? Powerful market-based strategies for tackling such emissions are emerging with several Brazilian states leading the way. They show that, if scaled up, we can, in fact, halt emissions from deforestation in the Amazon – the largest remaining tropical forest in the world – within a matter of years.

Here are two ways to get there, and the challenges ahead.

1. States are using financial incentives to spur change

The Brazilian state of Acre, home of world-renowned rubber tapper and environmental leader Chico Mendes, is developing a market-based system to reward landowners and forest communities financially for conserving forest.

This and other policies resulted in a 70-percent reduction in deforestation between 2005 and 2014, keeping 177 million tons of carbon dioxide out of the atmosphere.  At the same time, Acre significantly improved incomes and social indicators.

The state recently did the first-ever international REDD+ credit transaction, with 70 percent of proceeds getting invested in projects in indigenous and forest communities.

Pedro Taques, the governor of Mato Grosso, meanwhile, has proposed an ambitious and collaborative zero-deforestation rural development plan for a vast area of native forest and savanna.

It would protect 60 percent of that state’s territory, an area almost the size of France, while ramping up agriculture in already cleared or degraded land. The plan also promises to improve incomes for 100,000 poor family farmer families.

2. Carbon markets connecting to gain strength

Both those states consider carbon markets to be critical to their success and their timing is just right.

With the world’s most comprehensive carbon market and ambitious emission reduction targets, California is moving ahead on a regulatory process to allow states that reduce deforestation to sell emissions reductions into its markets.

This step sends an enormously powerful signal to the Amazon that forest protection can indeed be good business – for farmers, ranchers and forest communities.

But there are also some new and remaining challenges ahead. 

After a decade of progress, deforestation in Brazil hit a historic low in 2012 – only to since tick up.

With the country in political turmoil and economic crisis, proposed federal incentives for forest protection have not materialized, and some members of Brazil’s Congress are now proposing to roll back forest protection.

Meanwhile, major economies and carbon emitters have not set sufficiently ambitious targets to generate the demand for REDD+ carbon credits needed to end large-scale deforestation.

But as global pressure builds to address climate change, there is also a new resolve to address and, importantly, fund efforts to halt deforestation. When working in tandem with the market-driven changes under way today, they can keep us on the path toward zero deforestation.

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