Payment for ecosystem services: an alternative for the brazilian Amazon

Abstract

The Brazilian Amazon has been facing intensive pressure from the expansion of cattle ranching and soybeans toward forested areas. In the past 2 decades, the forest loss reached 33,6 million hectares, of which at least 5.7 million should be recovered to meet the minimum requirements of Legal Reserve and Permanent Preservation Area set in the Brazilian Forest Code. The urgency to enhance conservation and restoration policies is quite clear, and the 9.7 million hectares of expected deforestation until 2030 piles up new additional evidence that the government must take action to protect the Brazilian Amazon. Meanwhile, the ongoing fiscal crisis has been deepening the long-lasting tendency of public underspending on environmental management at the federal level and blocking the way to properly finance the environmental policy, especially concerning the conservation and restoration initiatives. Given this scenario, this article suggests the adoption of a Payment for Ecosystem Services (PES) program for conserving and restoring the Brazilian Amazon as a way to conciliate the lack of public resources with the necessity of improving the environmental outcomes in the region. The costs and environmental benefits in terms of carbon conserved and captured by the suggested PES program are estimated, and three alternative financial mechanisms are proposed as a means to fund its implementation, namely: (i) a tax on the forest deficit areas; (ii) a tax on the carbon emissions; (ii) a trade of REDD+ certificates. The results show that all three sources could consistently assist in reducing deforestation and fostering forest restoration, except for the forest deficit taxation, which would not be very effective in the case of restoration.