Brazil’s National Plan on Climate Change and the Amazon Fund: “This plan does not create any carbon credits or right to emissions”

On 11 December 2008, the Brazilian government organised a side event in Poznan to explain the National Plan on Climate Change and to present the Amazon Fund.

The National Plan on Climate Change was launched on 1 December 2008 by president Luiz Inácio Lula da Silva. The timing was interesting. Coinciding with the first day of COP 14 in Poznan, the country with the largest area of forest in the world announced its climate change plans, which include reducing deforestation but excludes the possibility of trading the carbon stored in its forests.

At the side event, Suzana Kahn Ribeiro, State Secretary, Ministry of Environment, explained that Brazil’s National Plan on Climate Change was based on a very participatory process. The plan is an important instrument for national climate policy. The two main challenges in achieving the objective of reducing greenhouse gas emissions are emissions from land use, land use change and forestry and to follow a low carbon path of development.

The plan focusses on seven areas:

1. Low carbon development

2. Renewable electricity

3. Biofuels

4. Deforestation

5. Forest cover

6. Vulnerability and adaption

7. Research and development

She told us that Brazil wants to keep a high share of renewable energy in the energy matrix. Kahn talked about encouraging the Brazilian ethanol programme, which is to be carried out, “in a sustainable way, without deforestation or things like that”. Ethanol crops are to be established on “degraded areas”.

Under the plan, deforestation is to be reduced by 70 per cent by 2018, which would avoid 4.8 billion tons of greenhouse gas emissions. Brazil wants “to eliminate net loss of forest cover by 2015”, Kahn said. “This is not a package, the plan is not closed,” she said. “We want to improve the plan.”

In his presentation of the Amazon Fund, Tasso Rezende de Azevedo, Director-General, Ministry of the Environment, told us that the aim of the fund is to combat deforestation and to promote sustainable development in the Amazon. 22 million people live in the Amazon, he said. 85 per cent of the Amazon is forest. 15 per cent was deforested in the last 30 years. Between 2004 and 2008 an area the size of Germany was put into protected areas in the Amazon. Recently, the government recovered 1.4 million cubic metres of illegal wood and 700 people were put in prison. Brazil has three million hectares of “forest” certified under the Forest Stewardship Council certification system.

Azevedo did not mention that the FSC certified “forest” is not all forest – some of it is monoculture eucalyptus plantations, such as these belonging to Veracel in the northeastern state of Bahia. In mid-2008, a Brazilian Federal court fined Veracel US$12 million for clearing an area of Atlantic Forest to make way for its plantations. The company remains FSC certified.

Since 2004, the deforestation rate has decreased, Azevedo told us, although he acknowledged that in 2008, the rate of deforestation is once again increasing.

The goal is a 70 per cent reduction in deforestation by 2018 over the average between 1996 and 2006. “We think that REDD is an excellent opportunity,” he said. The Amazon Fund is a private fund. The aim is to raise US$21 billion from governments and corporations. Any project funded through the Amazon Fund has to comply with Brazil’s National Plan on Climate Change.

Azevedo told us that Brazil’s calculation for carbon emissions avoided from reduced deforestation involves multiplying the area of deforestation avoided by 100, “even though there is a range of carbon stored in Amazon forests”, he added. If the rate of deforestation goes over the target, the target for the following year will be reduced by the appropriate amount.

“This plan does not create any carbon credits or right to emissions,” he said.

The next presentation was from Paul Todescan Lessa Mattos, chief of staff, Presidency, at the Brazilian Development Bank (BNDES). In 2008, BNDES disbursed US$40 billion, plus US$30 billion in private equity. He told us about the environmental policy that BNDES follows and about “the strict system that BNDES has before it agrees disbursements”.

He told us that BNDES is the financial manager of the Amazon Fund and that the Bank is opening a subsidiary in London to raise funds for the Amazon Fund.

Luiz Machado, Chair of the Ad Hoc Working Group on Long-term Cooperative Action, told us that Ban Ki-moon had said that Brazil is developing the world’s greenest economy. “The challenge of climate change requires unprecedented flows of finance,” he said. “It is consensual that we need to raise financial resource to unprecedented heights.” The Amazon Fund is part of this, he added.

No one will be allowed to carry on emitting as a result of this initiative. It will be additional to emissions cuts. Otherwise we will not be able to meet the IPCC’s targets, he said.

Nicholas Stern explained that he was not representing any government but was speaking as a University Professor at the London School of Economics and Political Science. Nevertheless, he was very diplomatic. He said we should celebrate the leadership of Brazil in showing a path on clean technology. On biofuels he said that if you are clearheaded in policy, you can change technology quickly. “We can say a lot about biofuels,” he added and promptly changed the subject.

He noted that Brazil has recently discovered oil. “In developing those assets, you need to keep your commitment to a low carbon economy,” he said and talked about carbon capture and storage through biomass which removes CO2 from the air. “This is another area that Brazil can lead the world,” he said.

Low carbon growth is not only possible, he said, it is inevitable. It is the only way of growth. He spoke about the danger of not addressing climate change. With an increase in global temperatures of 3°C, the Amazon would collapse.

He talked about the obligation of the world to support the Amazon Fund and similar initiatives. “We will all benefit,” he said. The two greatest challenges of the 21st century are poverty and climate change. They have to be handled together. Northeast Brazil is one of the poorest parts of the world. This is a story about development and of deforestation, he said.

Erik Solheim, Norway’s Minister of Environment and of International Development, told us that this scheme is of enormous importance, adding that the planned reduction of emissions in the Amazon is 10 times all of Norwegian emissions.

Norway is currently entering into an agreement to provide US$100 million a year to the Amazon Fund. Solheim explained that Brazil is the biggest forest country in the world and Brazil is a global leader. The money from Norway will be “results based, transparent and independently monitored”.

Before the climate conference in 2009 in Copenhagen, we hope to have experience on reducing deforestation from three continents, Solheim said. This should mean that more money will be available.

“We are on a plane leaking fuel,” Carlos Minc, Brazil’s Environment Minister, said. “Those who made the smallest holes can’t go on saying that other holes are bigger. We have decided to do our part.” Reducing emissions by 4.8 billion tons is more than all the developed countries promised in Kyoto – which in any case they will not meet.

Minc promised that “We will not occupy one hectare of forest for ethanol nor take away one hectare from food production. This will be green ethanol.”

Brazil has doubled its monitoring efforts of illegal logging, Minc said. “If we discover a wood plant operating illegally, we close it down within one hour. But we can’t protect jobs within one hour. So we need continued funding,” he said.

Minc spoke about the need for a public fund for reducing emissions in developing countries. This does not mean that developed countries don’t have to meet their targets, he added. Reductions in deforestation funded through the Amazon Fund will be additional and all projects funded will respect the full rights of Indigenous Peoples and local people. He talked about guaranteeing the maintenance of biodiversity. We have a plan, goals and the Amazon Fund.

When the presentations were finished, a Greenpeace representative congratulated Brazil. We should celebrate the launch of the fund he said. The targets could be a little faster, but Greenpeace welcomed the fact that the plan will be additional. The plan will not allow carbon credits and will not allow offsets.

Minc responded by asking us to recognise the progress made in Brazil. “I invite everybody, scientists and environmentalists to make an evaluation of the work. It is not a finished work.”

WWF has criticised the Amazon Fund, describing it as “short on ambition and detail” and both Greenpeace and WWF point out that even if the fund were to meet its target, it would still result in the deforestation of more than 5,000 square kilometres per year.

There are other serious concerns and questions about the plans:

1. Brazil continues extracting oil and looking for new oil fields. While the government is keen not to create carbon credits for the North through avoided deforestation, will the government trade off emissions from oil against the emissions saved by reducing the rate of deforestation?

2. The Juma Reserve RED Project in Brazil aims to reduce deforestation and to produce carbon credits for sale internationally. How does this comply with the government’s plans not to create carbon credits to rights to emissions? Is the government planning a two-tier approach under which private companies can set up forest conservation projects which generate carbon credits but the government cannot?

3. As Nicholas Stern pointed out, much can be said about biofuels, although he chose not to say much himself. There are plans for vast increases in the area of biofuel crops in Brazil. Are these plans really compatible with attempts to reduce deforestation? Another issue is the appalling labour conditions in sugar plantations, which currently cover six million hectares in Brazil. “The working conditions are atrocious, the wages derisory, their children are starving,” says human rights activist Pater Tiago about the problems in north-east Brazil.

4. Is the government really serious about addressing the causes of deforestation? The National Plan on Climate Change gives a figure of 34,460 MW to be generated from new hydropower dams to be built between 2007 and 2016, meaning more forest flooded and more greenhouse gas emissions, more evictions and more rivers destroyed. Will the government scrap plans for new roads through the Amazon? Will it abolish subsidies to the pulp and paper industry? BNDES, the bank in charge of the Amazon Fund, has a record of financing socially and environmentally destructive projects.

   5. The Brazilian government continues to promote industrial tree plantations. The government talks about “net deforestation” and eliminating “net loss” of forest. The National Plan on Climate Change includes a proposal to double the area of plantations in Brazil, an increase of 5.5 million hectares. Of this, 3.5 million hectares will be monocultures. And the government is pushing for the inclusion of “forests in exhaustion” in the Clean Development Mechanism. This is of particular concern, given the fact that the UN definition of forests fails to differentiate between forests and plantations – a loophole that the UN so far refuses to address.

   

5. No one at the side event in Poznan spoke about land rights. Yet Brazil has the largest movement for land rights in the world – a direct result of having one of the least equitable land ownership patterns anywhere in the world. It is a crucial issue in terms of poverty reduction, food sovereignty and addressing deforestation.