brazil_aw_bjg

Market-Based Innovations for Environmental Conservation in Brazil: 

Market-Based Innovations for Environmental Conservation in Brazil Mario Monzoni Friends of the Earth – Brazilian Amazon 22 April 2002 Beijing, China

BRAZILIAN AMAZON: 

BRAZILIAN AMAZON  5M Km 2 > Western Europe; ( ½ China)  20M People  Sweden + Norway + The Netherlands + Denmark ( 17% of China)  15 - 20% of global biodiversity  12% of global fresh water stocks

BRAZILIAN AMAZON: 

BRAZILIAN AMAZON Traditional approach: command & control regulations Result: 600K Km 2 deforested = > France 17K Km 2 every year  ½ Belgium

BRAZIL: 

BRAZIL New Solution: Incentive-Based Mechanisms Increasing the role of economic instruments in public policies Promoting participatory instruments involving groups in the civil society  Changing the incentives that drive micro-level behaviors

BRAZIL: 

BRAZIL Government Initiatives “RPPN” – PRIVATE NATURAL HERITAGE RESERVE “ICMS ECOLÓGICO” – ECOLOGICAL VALUE-ADDED TAX TRADEBLE DEVELOPMENT RIGHTS Non-Governmental Initiatives CERTIFIED FOREST PRODUCTS BUYERS GROUP OTHERS

“RPPN” Private Natural Heritage Reserve: 

“RPPN” Private Natural Heritage Reserve Law 1.922, June 5 th 1996 basis: personal desire to preserve Privately owned forest (either individually or collectively) Protected by the initiative of its owner Protection is legally recognized by the Government Selection criteria: high biodiversity, scenic, or environmental values

“RPPN” Private Natural Heritage Reserve: 

“RPPN” Private Natural Heritage Reserve Objective: To protect the environmental resources in the region Characteristics: Legal classification is forever, meaning FOREVER Only allow the development of scientific, cultural, educational, and recreational activities Obligations of the Owner: Guarantee maintenance of environmental attributes of the area Submit the zoning and the utilization plan for approval Report annually on status and activities developed

“RPPN” Private Natural Heritage Reserve: 

“RPPN” Private Natural Heritage Reserve Advantages to land owner: Rural Territory Tax Exemption Priority candidacy for financing from the National Environmental Fund Preferred access to credit for agricultural activities outside of RPPN Results: > 100 RPPN´s created Brazil wide > 250K hectares of protected area

“ICMS ECOLÓGICO” ECOLOGICAL VALUE-ADDED TAX: 

“ICMS ECOLÓGICO” ECOLOGICAL VALUE-ADDED TAX 25% of ICMS (tax on sale of goods and services) in Brazil is reallocated to local government - each state may determine redistribution criteria “Ecological” criterion adopted in 1990 (Paraná) Now operative in 6 states (PR, SP, MG, RO, RS e MS) Legislation under discussion in other states

“ICMS ECOLÓGICO” ECOLOGICAL VALUE-ADDED TAX: 

“ICMS ECOLÓGICO” ECOLOGICAL VALUE-ADDED TAX Acts as a fiscal compensation mechanism: the “Protector-Receives” principle Encourage municipalities to support the creation of conservation areas and to adopt sustainable development policies Rewards municipalities that have protected areas on their territory and thus cannot carry out traditional economic activities

“ICMS ECOLÓGICO” ECOLOGICAL VALUE-ADDED TAX: 

“ICMS ECOLÓGICO” ECOLOGICAL VALUE-ADDED TAX Criteria: Territorial Restriction = Protected Area / Total municipal area Conservation Factor = Level of Protection (weighting based on management categories) Quality Factor = Physical and Biological quality of area, water resources, implementation and management plan, articulation with the community, monitoring... Amount received = % Total ICMS x Territorial Restriction x Conservation Factor x Quality Factor

“ICMS ECOLÓGICO” ECOLOGICAL VALUE-ADDED TAX: 

“ICMS ECOLÓGICO” ECOLOGICAL VALUE-ADDED TAX Results: Increase in the # and size of protected areas and recuperation of degraded forestlands Improvement in the quality of conservation: local infrastructure and services (electrification, roads, water..) Public dissemination of the debate Introduction of a municipal environmental agenda Institutional improvement of the use of economic instruments for environmental regulation Promoting fiscal justice Incentive to eco- and rural-tourism

“ICMS ECOLÓGICO” ECOLOGICAL VALUE-ADDED TAX: 

“ICMS ECOLÓGICO” ECOLOGICAL VALUE-ADDED TAX Paraná: 2.5% to conservation + 2.5% watershed protection Total protected area increased 143%, or 1,133,176 additional hectares (1992-99) Many private landowners have committed forestlands to permanent easements (RPPN) R$ 42M transffered = US$20M

“ICMS ECOLÓGICO” ECOLOGICAL VALUE-ADDED TAX: 

“ICMS ECOLÓGICO” ECOLOGICAL VALUE-ADDED TAX São Paulo: 0.5% to Conservation 152 municipalities (1999) = 24% of Total Ribeira do Iguape Region = 23 municipalities Amount received is greater than the fiscal value added transfered R$ 27M transfered = US$12M

“ICMS ECOLÓGICO” ECOLOGICAL VALUE-ADDED TAX: 

“ICMS ECOLÓGICO” ECOLOGICAL VALUE-ADDED TAX Minas Gerais 0.5% to Conservation + 0,5% to Garbage and Sewage Treatment # of conservation units nearly doubled Protected areas increased 48%, totaling an additional 551,591 hectares (1995-98) Total allocated (1995-98): US$ 25M 174 municipalities (1998) Conservation became the “principal industry” in some municipalities

Tradable Development Rights Scheme: 

Tradable Development Rights Scheme 80% High Productivity Area US$ 500/ha/Y Low Productivity Area US$10/ha/Y PROPERTY A PROPERTY B

WITHOUT TRADEBLE RIGHTS: 

WITHOUT TRADEBLE RIGHTS 80% High Opportunity Cost Low Environmental Gain High Environmental Cost Low Economic Gain PROPERTY A PROPERTY B REFORESTATION DEFORESTATION

WITH TRADEBLE RIGHTS: 

WITH TRADEBLE RIGHTS 80% High Opportunity Cost Low Environmental Gain High Environmental Cost Low Economic Gain PROPERTY A PROPERTY B TRADED RIGHTS TRADED RIGHTS $ reserve

Non-Governmental Activities: 

Non-Governmental Activities “Pro-Ambiente” – Pro-Environment Fund Watershed Consortiums Carbon Sequestration PR, TO, and MT Plantar Project – Charcoal to the Pig-Iron Industry – Approved by World Bank Prototype Carbon Fund Forest Certification: Buyer’s Group

CERTIFIED FOREST PRODUCTS BUYERS GROUP: 

CERTIFIED FOREST PRODUCTS BUYERS GROUP NGO Initiative – Friends of the Earth – Brazilian Amazonia Funded in April, 2000 with 33 companies as “Certified Timber Buyers Group” Became “Certified Forest Products Buyers Group” in February, 2001 Now, has 62 companies, 2 State Gov´ts (Acre and Amapá), and 1 municipality (Guarujá) First Group in a Developing Country – (14 in the World)

PowerPoint Presentation: 

CERTIFIED FOREST PRODUCTS BUYERS GROUP

PowerPoint Presentation: 

Commitments: For those who buy native forest products 50% of its total consumption has to be certified till 2005 For those who buy reforested timber 100% of its total consumption has to be certified till till 2005 Group Total Potential Consumption 1M m 3 of Certified Timber CERTIFIED FOREST PRODUCTS BUYERS GROUP