By Jennifer Ann Thomas
SÃO PAULO, March 25 (Thomson Reuters Foundation) — Brazil's lawmakers have cleared the way for the creation of a national system to pay farmers, local communities, and others to protect natural habitats that provide key environmental services, such as water and carbon storage.
A bill was first approved in January by right-wing President Jair Bolsonaro, although he vetoed key points that would ensure transparency and governance, such as the establishment of a monitoring body and a register for payments.
After those provisions were reinstated, legislators last week backed the bill in a vote bringing together green-minded and agribusiness-friendly congress members, to lay the foundations for a national policy for Payments for Ecosystem Services (PES).
The country can now structure a market that compensates those managing efforts to protect nature and the climate, in line with the global goals set by the Paris agreement.
The PES policy will include carbon offsets generated by conserving carbon-rich forests and other ecosystems.
However, there are questions over Brazil's commitment to the Paris goals to curb global warming, after it submitted an updated climate action plan to the United Nations in December that climate experts criticized as weaker than its previous one.
In a statement, WWF Brazil said the new plan would "allow for significantly more emissions in 2025 and 2030" than Brazil's earlier submission under the 2015 Paris accord.
Neither does it include a firm commitment to reduce deforestation, whereas the original "nationally determined contribution" pledged to end illegal deforestation by 2030.
Bolsonaro has historically called for developing the Amazon, and deforestation last year surged to a 12-year high, with areas equal to seven times the size of London destroyed.
Brazil has also obstructed UN negotiations on new rules to govern carbon markets, defending a system that would allow "double counting" of emissions reductions.
Its 2020 climate plan says Brazil expects to receive international financial transfers to fund its conservation strategies — which would enable more ambitious efforts.
More broadly, the resources for the PES scheme are expected to come mainly from private companies, international investors, and wealthy donor governments.
The concept of PES is not new and has already been used in Brazil on an ad hoc basis, as well as in other countries in the Americas, including Costa Rica — which has run such projects since the 1990s — Colombia, Mexico, and the United States.
For example, Brazilian cosmetics firm Natura & Co. has a partnership with reforestation project Reca, which comprises rural producers from Rondônia, Acre, and Amazonas states.
They are paid to supply products such as cupuaçu fruit, acai berries, and medicinal crabwood, while also preserving forest areas.
In 2017, Reca received its first payment to conserve 5,000 hectares (12,355 acres) of forest, and in 2018, the payments became annual.
The money can go to individual producers or to a collective fund managed by Reca, conditional upon emissions reductions audited by an independent company.
The aim is to cut deforestation to zero by 2038 in the areas where the Reca producers operate.
Pedro Soares, climate change manager at the Institute of Conservation and Sustainable Development of the Amazon (Idesam) who works on the Reca project, warned that weak enforcement of Brazil's environmental laws is an obstacle.
"The rise in deforestation in the Amazon in recent years seriously compromises Brazil's ability to generate results under the Paris agreement and the carbon markets," he said. "We are literally burning investments."
But Joaquim Leite, Amazon and environmental services secretary at the Ministry of the Environment, said Brazil could become a major player in PES, harnessing international financing under the Paris agreement.
PES was launched in Brazil in 2005, when the Water Conservation project, managed and funded by the local government in Extrema, in the state of Minas Gerais, began paying for the preservation of forests in areas with natural springs.
The territory is a producer of water, which it supplies to the metropolitan region of São Paulo.
But until now, without a national law to govern such initiatives, they have varied across the country.
Land Rights Key
Erika de Paula, coordinator of the ecosystem services group at the Brazilian Coalition on Climate, Forests, and Agriculture, said the new bill sets clear objectives and guidelines.
"From now on, states and municipalities no longer need to create laws to legalize remuneration for environmental services," she said.
The new law says Indigenous peoples, traditional communities, and family farmers should be priority groups for PES projects.
But larger-scale farmers and ranchers could also receive payments by conserving areas of land in addition to what they are already obliged to protect on their properties.
According to Letícia Cobello, public policy adviser for the nonprofit Foundation for Amazon Sustainability, land rights need to be regularized, especially in the Amazon region, to expand PES projects.
"The fact that we have a lot of unsettled land is a limiting factor to increase investments from international cooperation," she said, pointing to potential land grabbing as a deterrent.
With the implementation of the new PES policy, Cobello believes Brazil will show its commitment to protecting a significant proportion of the world's largest tropical forest.
"We will not become [environmental] protagonists, but we will arrive at a minimum expected scenario for a country with so many forests and the large population that lives within them," she said.
(Reporting by Jennifer Ann Thomas; editing by Megan Rowling. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers the lives of people around the world who struggle to live freely or fairly. Visit http://news.trust.org/climate)