Brazil—Paying for Nature Scoping Activity

Home to 33 percent of the world’s tropical forests, the Brazilian Amazon ecosystem plays a critical role as part of global systems, influencing the global carbon cycle and thus climate change, as well as hemispheric hydrological systems.

The Amazon, for the first time in its history, is now estimated to emit more carbon than it absorbs. Deforestation over the past 30 years has been concentrated in the states of Mato Grosso, Pará, and Rondônia, the traditional “deforestation frontier” of the Brazilian Amazon. The main drivers of deforestation include logging, cattle raising, soya production, mining, and infrastructure development such as roads and hydroelectric dams.

The UK is a major importer and consumer of seven commodities often linked with this loss of forest and the associated social challenges: beef and leather, cocoa, palm oil, pulp and paper, rubber, soy, and timber. The nature of UK trade in these commodities has a significant bearing on the ability to achieve the Sustainable Development Goals and the Paris Agreement.

Defra commissioned DAI to conduct research and analysis of the current state of play in the Legal Amazon region to inform the next round of climate finance investments in the country. The five-month study comprised three workstreams:

1. The Political Economy Analysis (PEA) workstream to map out the political landscape in the region and provide the U.K. International Climate Finance (UK ICF) with key information on the involved actors, vested interests, political will, and engagement opportunities.
2. The Paying for Nature workstream assessed previous and current market-based mechanisms and their effectiveness in protecting forest ecosystems and biodiversity conservation
3. The Donor and Partnership opportunities workstream mapped the donor landscape and funding allocated to Agriculture, Forestry and Other land Uses (AFOLU) and biodiversity activities across the six biomes of Brazil.

Select Results

• As part of the PEA, undertook a comprehensive review of federal and state-level legislative frameworks, policies, strategies, and priorities affecting environmental protection, land-use change, deforestation, agriculture, and climate financing in the Legal Amazon
• Mapped over 150 stakeholders relevant to the AFOLU sector in the Legal Amazon in a stakeholder analysis and assessed stakeholders’ interest and influence
• Carried out consultations with the federal government, state government, indigenous groups, women’s groups, cooperatives, private sector, climate finance, and donor representatives
• Produced an in-depth PEA of institutional factors shaping environmental governance including an inter- and intra-state level analysis.
• Identified U.K. funding opportunities for funding models that prioritize indigenous groups and local communities, gender issues, value chains, and bioeconomy, land regularisation, and curtailing illegal land-use activities.
• Assessed around 30 leading initiatives, and the barriers and opportunities for market-based initiatives and economic and financial instruments that incentivize the protection of forests.
• Analyzed donor strategic priorities, approaches to AFOLU programming, the nature of its operations and partnerships, and future trends in AFOLU finance.
• Provided partnership opportunities for Defra and UK ICF team.