Brazilian Landowners Can Now Offset Past Deforestation With Future Protection

Steve Zwick

The Brazilian government this week approved a mechanism that lets property owners who deforested more than their legal limit before 2008 offset their “forest debt” by purchasing credits from landowners who have not. Proponents say it could save 10 million hectares of forest, while critics say the larger policy still lets too many environmental scofflaws off the hook.

Two years ago, the Brazilian government infamously amended its Cí³digo Florestal (Forest Code), granting amnesty to “small” farms up to 440 hectares in size that had illegally chopped down more than their fair share of forest before 2008. The amendment also promised to create a mechanism that would let farmers who were still over their limit after the amnesty make good on their “forest debt”.

Two days ago, the Ministry of Environment officially unveiled that mechanism, giving the owners of roughly six million properties one year to register them on a database called the Rural Environmental Registry System (Cadastro Ambiental Rural / “CAR”), which is linked to a satellite monitoring system that tracks land use. The program also makes it possible for farmers who are still above their legal limit to either purchase Forest Reserve Credits (Cotas de Reserva Ambiental / “CRAs”) from landonwers who are below their limits or to donate land that is inside recognized Conservation Units to a government environmental agency. CRAs will be traded on Bolsa Verde do Rio de Janeiro (Environmental Exchange of Rio de Janeiro / “BVRio“), which was launched in 2012 by former EcoSecurities boss Pedro Moura Costa.

The announcement had been widely anticipated, and was addressed two weeks ago by Brazilian researcher Britaldo Soares-Filho of the University of Minas Gerais, together with researchers from the Woods Hole Research Center, the Brazilian Secretariat for Strategic Affairs (Secretaria de Assuntos Estratégicos), and the Environmental Research Institute of the Amazon (Instituto de Pesquisa Ambiental da Amazonia / “IPAM”).

The team published an article in the journal Science that laid out the pros and cons of the new initiative. On the plus side, the team said that the new system creates a manageable mechanism for promoting reforestation and protecting forest that remains. On the minus side, the team quantified the full impact of the amnesty and concluded it let farmers off the hook for more than half the forest that had been illegally chopped down prior to 2008. Specifically, they said there are currently between 20 and 22 million hectares of “forest debt” – or land that was illegally deforested before 2008 and was not forgiven by the amnesty. The pre-amnesty amount, however, was anywhere from 44 million to 56 million hectares, they said. That means anywhere from 22 million to 36 million hectares of forest debt were forgiven.

Of the remaining debt, they said, roughly half could probably be offset through the new program.

Proponents of the amnesty said that the previous situation was simply unsalvageable, and that CAR creates a mechanism that not only promotes restoration and protection of endangered forest, but also creates a trustworthy data base of properties. This, they say, provides the kind of transparency that “green” buyers of soybean products, beef, and other land-based products need to better monitor their supply chains, as became apparent at the Earth Day Katoomba Meeting in Peru.

“Given the high costs of forest restoration, exchange of CRAs could become a cost-effective way to facilitate compliance, meanwhile protecting forest surpluses that might otherwise be legally deforested,” wrote Soares-Filho and his colleagues. “A balanced use of CRAs should focus on improving functional and ecological attributes of forested landscapes, e.g., habitat integrity (and thus biodiversity), carbon stocks, and water balance regulation, crucial for maintaining hydroelectric power generation in Brazil.”

The new mechanism, they conclude, is a valuable tool, but will only deliver meaningful results if combined with major-buyer demand, good governance, and other emerging mechanisms.

“Our analysis suggests that the FC will allow additional deforestation, especially in the Cerrado and Caatinga,” they wrote. “Economic incentives for conserving forests, including the Warsaw Framework for Reducing Emissions from Deforestation and Forest Degradation as (REDD+), will be essential to help implement the FC and to enable Brazil to better reconcile environmental conservation with agricultural development.”