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Brazil needs to invest R$228 billion to achieve its goal of restoring 12 million hectares of forest, according to a study by Instituto Escolhas. The potential return on investment is considerable: R$776 billion in net revenues, the creation of 2.5 million new jobs, the production of 156 tonnes of food and the elimination of 4.3 billion tonnes of CO2 from the atmosphere.
MORFO hosted a webinar on May 29, 2024 to explore in depth Brazil's cutting-edge strategies and innovative financing mechanisms to restore the Amazon rainforest, a vital element in the global fight against climate change.
We were honored to welcome Nabil Moura Kadri, Deputy Managing Director of BNDES, responsible for the Environmental Area, including the Amazon Fund, Climate Fund, Forest Bioeconomy, Mixed Financing and Forest Restoration, as well as internationally renowned earth systems scientist Professor Carlos Nobre from the University of São Paulo. Professor Nobre, who first proposed the concept of the Restoration Arc, is currently working on the Amazon Technological Institute (AmIT) project. We were also privileged to welcome Ana Toni, currently National Secretary for Climate Change at Brazil's Ministry of the Environment, to the online conference. With notable roles such as Executive Director of the Institute for Climate and Society (iCS) and Chairman of the Board of Greenpeace International, Ana Toni brings expertise in environmental advocacy, sustainable development and philanthropy. Her leadership reflects a commitment to global challenges, particularly in efforts to combat climate change, positioning her as influential in shaping Brazil's sustainable strategies.
Restoring the Amazon isn't just about carbon reduction
This essential conference began by emphasizing the crucial importance of the Amazon rainforest for the global climate.
Restoring the Amazon isn't just about reducing carbon in the atmosphere; it's about avoiding a point of no return. Carlos Nobre was the first scientist to publish, 35 years ago, the first articles on what would happen to the Amazon if deforestation continued (at that time, 7% of the Amazon was deforested). These studies showed that with significant deforestation, the southern forest would not regenerate and the dry season would extend to 6 or 7 months.
Since then, thousands of other studies have confirmed that this is no longer a projection. In fact, the Amazon is now extremely close to a point of no return. Over the past 40 years, the southern and southeastern Amazon region (equivalent to 2.3 million square kilometers) has experienced a dry season that is 4 to 5 weeks longer than in the 1970s, rising from 3-4 months to 4-5 months.
"If the dry season reaches a duration of 6 months in the southern and southeastern regions of the Amazon, the forest will begin to degrade on its own. In some areas, such as the south of the state of Pará and the north of the state of Mato Grosso, the forest is already emitting carbon." - Professor Carlos Nobre, University of São Paulo
We must restore on a large scale
The Intergovernmental Panel on Climate Change states that we need to restore 6 to 7 million square kilometers to combat the climate emergency, i.e. to ensure that global temperatures do not exceed 1.5°C by the end of the century.
"We need to restore at least 500,000 square kilometers of Amazon rainforest if we are to avoid a point of no return, and this will be impossible to do without scaling up." - Professor Carlos Nobre, University of São Paulo
Restoring tropical forests is essential, as they grow rapidly and absorb more carbon than other forests. This is why Brazil is so important, with the largest portion of tropical forest on its territory. Brazil has the opportunity to be a great example for other restoration projects around the world. There is enormous potential in the carbon market.
Large scale and speed are essential, but we mustn't forget that we need to plant native species to safeguard local biodiversity. We also need to accelerate the restoration of urban forests, as this helps to combat erosion and extreme urban temperatures. Restoring urban areas protects human health from extreme heat waves and pollution, which kill hundreds if not thousands of people every year. "As well as capturing carbon and biodiversity, we need to create what are known as urban sponges: fully restoring riparian forests, deforested hillside areas and hilltops," says Professor Carlos Nobre, also recalling the disaster that occurred in January 2011 in the mountainous region of Rio. On that occasion, 918 people died as a result of landslides, 85% of which originated in deforested hilltops.
Brazil's role in solving a global problem
Today's restaurant business model involves many risks, and investments need to be long-term, i.e. at least 20-30 years. Only then will there be good returns. That's why today's business model needs to take environmental factors into account.
"Nationally and internationally, Brazil has a political and financial obligation to restore quickly and on a large scale." - Nabil Moura Kadri, Deputy Managing Director of BNDES
Today's global challenges include :
- Converting currencies from dollars to reals is a problem, because most of the time, not everyone can commit to this type of compromise.
- Stop thinking project by project and see it as programs and national initiatives
Necessary investment and economic opportunities for forest restoration in Amazonia
Instituto Escolhas recently shared an interesting survey. Brazil needs to invest R$228 billion to achieve its goal of restoring 12 million hectares of forest. The potential return on this investment is considerable: R$776 billion in net revenues.
But where can these resources come from?
- National and international non-repayable funds and foundations
- Legal and administrative obligations (compensation and reparation)
- Private sector investments
- Huge opportunities with the carbon market
Fortunately, new technology and innovations have been increasingly tested in recent years. At COP28, the BNDES announced that it will restore 24 million hectares of the Brazilian Amazon with native species as part of the Arco de Restauração project.
"For each area to be restored, we need to have the ability to go into the field and see the specific needs: what does the area need, how much will it cost and how should we finance it... A major question to answer is how to mix public and private investment." - Ana Toni, Executive Director of the Institute for Climate and Society and Chairman of the Board of Greenpeace International
On the subject of resources and funding for productive restoration beyond carbon investments, Carlos Nobre is optimistic that developed/rich countries will invest millions of dollars to maintain and save the planet's biodiversity, particularly tropical forests. However, Ana Toni is less optimistic, as countries have yet to deliver on their promises.
"The most important thing is to transform the way our economy works to adapt to the ecological transformation of the world. Laws are also extremely essential to make this happen." - Ana Toni, Executive Director of the Institute for Climate and Society and Chairman of the Board of Greenpeace International
Current initiatives and funding to restore the Amazon rainforest
Large-scale restoration of native forests is a significant innovation in Brazil today. But along with this, we also need to think about new economic instruments, as this is a new economic sector.
"The problem isn't that restoration doesn't make money; the problem is that the economic sector doesn't value the ecosystem services that native restoration provides us with." - Ana Toni, Executive Director of the Institute for Climate and Society and Chairman of the Board of Greenpeace International
Brazil is in the process of finding new economic processes to help restoration, not how restoration will help the economy, because that's the only way native forest restoration can be done properly. It's much more concrete today: we're looking at the real guarantees of restoration as an economic activity, not just imagining that funding will come from public resources.
Indeed, public resources alone will be insufficient to accomplish this immense task. Ana Toni stressed that we will need to mix funding from all possible sources, with as many actors and stakeholders as possible, at both national and international level.
Nabil Moura Kadri, BNDES Deputy Director General for the Environment, also stressed the importance of bringing together the public and private sectors to finance restoration.
"BNDES has developed a green financing instrument model that coordinates resources for restoration in all the country's biomes. This model led to the largest call for proposals for mangrove restoration in the country, totaling nearly R$50 million." - Nabil Moura Kadri, Deputy Managing Director of BNDES
Read more about this webinar:
- Carlos Nobre: the RS tragedy confirms the importance of reforestation in urban areas, Carbon Report
- Webinar examines financing forest restoration in Amazonia, Amazônia Brasil Radio Web
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