Financing Forest Protection with Integrated REDD+ Markets in Brazil

Abstract

It is widely recognized that Brazil has achieved a great degree of greenhouse abatement mainly due the 70% reduction in the deforestation rate combining control instruments as the improvement of monitoring system and sanction enforcement on forest management plus restrictions to agricultural expansion in the region. Brazil’s INDC is even more ambitious with a target of 90% reduction. In addition to non-use values attached to biodiversity, forest protection generates important local use from extractive production, greenhouse gas mitigation and climate regulation effects on agriculture, cattle raising, and hydroelectricity production. But the incentive power of the current control measures of forest policies has reached its limit and requires a more complex set of incentives that internalize pricing signals. One way to pursue is to count payments for the performance on the reduction emission of forest deforestation and degradation (REDD+). The chapter, after reviewing estimates of the ancillary benefits from land use mitigation options in Brazil, presents an Integrated REDD+ that catalyzes the transfer of financial resources to the land use sector, while ensuring that non-REDD+ options continue to receive financial resources for the innovation and decarbonization of industrial, transportation, and energy activities.