If you want a simple explanation of why climate change is a development issue, Juliana Santiago can provide it. The head of the Amazon Fund department at Brazil’s national development bank (BNDES) tells me that Brazil's economy "was dependent on the maintenance of the forest,” and that, with 29m people living in the Amazon – many in poverty – getting rural landowners to “understand that deforestation might be a threat to their business was part of this engagement in protecting the forest and thinking about sustainable development.”
And Brazil knows a thing or two about protecting forests. In a decade, it cut deforestation rates by more than 80% and is now the largest reducer of greenhouse gas emissions.
The Amazon Fund provides financial assistance to combat deforestation, and in a new CGD Podcast, Santiago tells me that Brazil used a raft of policies on land rights, curbing illegal forest clearance and providing alternative sources of income for forest communities. Included in this was the Amazon Fund’s payment-for-performance program, which recognizes that the trees are providing a utility in terms of climate and development services.
“A Maturity Process”
Santiago spoke at the launch of CGD’s new report "Look to the Forests: How Payment for Performance Can Reduce Climate Change" and in the Podcast explains that Brazil’s efforts were aided by a $1bn payment-for-performance partnership with Norway, where money was paid for verified emissions reductions.
“Climate change is beyond a Brazil problem,” says Santiago. “It’s a world problem. So the message and engagement of rich countries is very important.”
“It’s a maturity process. After Norway pledged a donation to the Amazon Fund, it brought, in sequence, a pledge and a donation from the Germany government.”
How can more countries become involved in payment-for-performance agreements to reduce deforestation? Click below to hear what Santiago thinks.
The payment-for-performance model known as REDD+ is an established process, agreed upon under the auspices of the UN. CGD’s new report examines why, despite this apparent accord, more countries are not actively involved in payment-for-performance programs to prevent deforestation. It finds that donor countries treat such payments as aid, and recommends that they instead see the money as a payment for services rendered, without placing conditions on how it is spent.
“This Is Not Aid”
“Don’t fall into the trap of traditional aid,” urged CGD President Nancy Birdsall at a recent event previewing the report at the UN headquarters in New York. “For a start, this is not aid.… We should be paying, especially we in the rich world, should be paying for these services that trees and tropical forest countries provide.”
Santiago agrees and urges more countries to reinforce acceptance of the REDD+ model with tangible commitments.
“The question is, where is the money? We need now the financial engagement, because the framework we have already agreed.”
Watch the video of the whole podcast here.
CGD blog posts reflect the views of the authors, drawing on prior research and experience in their areas of expertise. CGD is a nonpartisan, independent organization and does not take institutional positions.