Unlocking Forest
FINANCE - UFF PROJECT
T
he Unlocking Forest Finance Project (UFF) aims to develop innovative financing mechanisms to promote a transition to a sustainable development scenario, reducing the pressure for new deforestation, promoting improvements in agricultural supply chains and stimulating conservation activities, as well as sustainable livelihoods in the study regions. The project has local partners in three regions: Acre and Mato Grosso in Brazil, as well as San Martin in Peru. IPAM is the implementing partner in Mato Grosso and supports the activities in Acre.
THE PROJECT DEVELOPMENT
Since the beginning of the project in 2013, we have consulted with local stakeholders to understand the business as usual scenario for the state, as well as to identify what would be the sustainable scenario. Therefore we have investigated the local needs, existing public policies and future governmental plans to determine, in a participatory way, which activities should be considered in the project. Once the activities have been identified, their costs and revenues will be quantified to assess the economic viability of the transition to a more sustainable scenario.
Subsequently, the social, environmental and economic benefits of the transition as a whole will be quantified. With this in hands, and through interactions with potential investors,
both public and private, we will design a financial mechanism which is both attractive from an investor’s point of view, but with proven environmental and social benefits. At the end of the project, in 2017, the idea is to replicate the process in other regions.
WHY MATO GROSSO?
Mato Grosso is the third largest of the 27 states of Brazil, occupying an area of 903 thousand km² (349 thousand mi2). Of which 53% is Amazon biome, 40% Savanah (known as “Cerrado”) and 7% constituted as wetlands (or “Pantanal”).
Mato Grosso was selected as one of the three case study regions of the UFF project due to its
agricultural potential (for commodities) and potential to increase productivity (especially for beef production), as well as for its large forest remnants, and for having significantly reduced deforestation in the last few years partially due to governmental effort to reduce deforestation. From 2004 to 2013, the avoided deforestation in Mato Grosso has avoided the emissions of roughly 1.95 GtCO2. Annual and avoided deforestation (thousand km2)
12,0
10,0
Avoided deforestation Annual Deforestation State Baseline
Avoided emissions 1.95 GtCO2
8,0
6,0
4,0
2,0
0,0
WHICH SUPPLY CHAINS AND CONSERVATION ACTIVITIES ARE CURRENTLY UNDER STUDY IN MATO GROSSO STATE? The UFF project focuses in three strategic areas; (1) Sustainable Supply Chains, (2) Conservation Activities, and (3) Sustainable Livelihoods. So far, IPAM has interviewed from about 25 institutions and has held a workshop with local actors to identify the activities which should be part of the transition. As for the sustainable supply chains we consider; cattle (beef and milk), soy, cotton, planted and native forests, fish farming, swine, rubber and agroforestry. For Conservation activities, the project is studying state and federal conservation areas and relevant public policies such as the Forest Code and the implementation of Mato Grosso’s State REDD+ Law. Indigenous people and Non Partners
Timber Forest Products (NTFP) are considered under Sustainable Livelihoods.
SUSTAINABLE SCENARIOS
Different systems, technologies and public policies were considered to estimate the upfront capital investments necessary to shift to a more sustainable economy in Mato Grosso. Some examples of systems, technologies and public policies are: Cattle intensification systems, compliance with the Forest Code (mainly for soy, cotton and cattle), sustainable management of native forests and reforestation activities, incorporation of waste treatment technologies, training and capacity building for smallholder producers (rubber, agroforestry, fish farming) as well as training and capacity building for non-timber forest products producers in order to increase productivity and improve Environmental, Health and Safety Standards. With regards to Conservation activities, the sustainable scenario is the consolidation of all protected areas objectives, the implementation of REDD+ State Law and the implementation of the forest code. Finally for indigenous people the sustainable scenario considered in the study is the full implementation of National Policy for environmental and land tenure management of Indigenous Lands (PNGATI) long term targets. The time frame considered in all activities varies from 10 to 15 years, were the first is dependent on sector forecasts (normally 10 years) and the latter is based on state policies (generally up to 2030). Support
This project is part of the International Climate Initiative, funded by the German Environment, Nature Conservation and Nuclear Safety (BMU).