The fund’s resources are currently needed to recover policy for forest protection. In the long run, they should be used to support innovative measures for sustainable development.
Greenhouse gas (GHG) emissions are a great example of what economists call an externality. The term is just jargon for a simple concept: someone produces an externality when their action affects, positively or negatively, an uninvolved third-party. GHGs, which essentially fuel climate change, do not respect national borders and accumulate in the Earth’s atmosphere. So what a country emits affects the rest of the world. This is literally an externality at a global scale.
It is therefore reasonable, or “rational” as economists would put it, that other nations care about Brazilian emissions. In fact, not only is it reasonable that they care, but also that they be willing to pay for Brazil to reduce emissions. After all, they, too, benefit from this reduction.
Cue conditional international transfer mechanisms, which serve as a means of compensating nations for emissions reductions. The Amazon Fund is one such mechanism. In simple terms, it works like this: the fund receives donations from other countries (so far, Norway and Germany) and uses these resources to support projects aimed at fighting Amazon deforestation; if deforestation decreases, donors donate more.
The Amazon Fund is not a mechanism for charity or philanthropy — and that’s fine. What matters is ensuring that the fund is anchored to transparency, a well-defined and representative governance structure, and rigorous monitoring and evaluation processes.
Although it’s still learning to improve the design and use of international transfer mechanisms, the world recognizes that these mechanisms can be powerful allies for addressing the climate crisis. The recent reactivation of donors’ transfers to the Amazon Fund was thus met with great excitement in Brazil, and many expect that new nations and organizations will soon be added to the fund’s list of donors.
In the short run, the Amazon Fund will play a central role in rebuilding Brazil’s public policy framework for combatting deforestation. Following a period of intentional dismantlement, the situation is dire and the priority must be reconstruction. Restoring the budget for the Ministry of the Environment and Climate Change is a necessary condition for this, but it might not be enough to meet the many substantial and legitimate needs in the area. The fund’s resources can be used to supplement the budget and thereby help recover Brazilian conservation policy.
In the short run, the Amazon Fund will play a central role in rebuilding Brazil’s public policy framework for combatting deforestation. Following a period of intentional dismantlement, the situation is dire and the priority must be reconstruction.
Clarissa Gandour, Ph.D. in Economics from PUC-Rio and Head of Conservation Policy Evaluation at Climate Policy Initiative/PUC-Rio
In the medium and long run, however, the Amazon Fund should serve another purpose. State policy cannot rely on funds from international donors. A government that is truly committed to fighting the climate crisis must be willing to invest money, people, time, and political capital in this endeavor.
If the State fulfills its duty and ensures the implementation of effective conservation policy, resources such as those from the Amazon Fund could be used to support efforts at the frontier of sustainable development action. This includes innovation not only in policy, but also across the civil society, media, and academia.
Picture this: robust public policy safeguarding the core of forest protection and billions in international transfers available for boosting knowledge about how to improve this protection. What a powerful combination that would be for the Amazon.
The opinions expressed in this article are the writer’s own.
