Amazon Fund 10 Years Later: Lessons from the World’s Largest REDD+ Program

Abstract

Results-Based Funding (RBF) for Reducing Emissions from Deforestation and Forest Degradation (REDD+) has become an important instrument for channeling financial resources to forest conservation activities. At the same time, much literature on conservation funding is ambiguous about the effectiveness of existing RBF schemes. Many effectiveness evaluations follow a simplified version of the principal-agent model, but in practice, the relation between aid providers and funding recipients is much more complex. As a consequence, intermediary steps of conservation funding are often not accounted for in effectiveness studies. This research paper aims to provide a nuanced understanding of conservation funding by analyzing the allocation of financial resources for one of the largest RBF schemes for REDD+ in the world: the Brazilian Amazon Fund. As part of this analysis, this study has built a dataset of information, with unprecedented detail, on Amazon Fund projects, in order to accurately reconstruct the allocation of financial resources across different stakeholders (i.e., governments, NGOs, research institutions), geographies, and activities. The results show that that the distribution of resources of the Amazon Fund lack a clear strategy that could maximize the results of the fund in terms of deforestation reduction. First, there are evidences that in some cases governmental organizations lack financial additionality for their projects, which renders the growing share of funding to this type of stakeholder particularly worrisome. Second, the Amazon Fund allocations did also not systematically have privileged the municipalities that showed the recent highest deforestation rates. rom the 10 municipalities with the higher deforestation rates in 2017, only 2 are amongst the top 100 receiving per/Ha considering the 775 municipalities from Legal Amazon. Third, the allocation of the financial resources from the Amazon Fund reflects the support of different projects that adopt significantly diverging theories of change, many of which are not primarily concerned with attaining further deforestation reductions. These results reflect the current approach adopted by the Amazon Fund, that do not actively seek areas for intervention, but instead wait for project submissions from proponents. As a consequence, project owners exert much influence on to the type of activities that they support how deforestation reduction is expected to be attained. The article concludes that the Amazon Fund as well as other RBF programs, should evolve over time in order to develop a more targeted funding strategy to maximize the long-term impact in reducing emissions from deforestation.

Climatic Benefits From the 2006–2017 Avoided Deforestation in Amazonian Brazil

“…Alternatively, by assuming that only 56% of the decline in deforestation could be attributed to the government's efforts, as suggested in the literature (Assunção et al, 2015;Cunha et al, 2016), the value of the avoided deforestation would be USD 4.1 ± 1.1 billion. In both cases, these estimates far exceed the current amount of USD 1.2 billion donated to the Amazon Fund to support forest conservation and sustainable development activities in the country (Correa et al, 2019). We note that these values only refer to emissions from deforestation and do not necessarily capture the impacts of forest degradation from logging and associated facilitation of forest fires and biological invasions by lianas, bamboos, or pioneer tree species (e.g., Vidal et al, 2016;Tyukavina et al, 2017;Aragão et al, 2018).…”

“…The fund was designed to raise and manage donations for the promotion of actions aligned with the PPCDAm's goals to prevent, mitigate, and monitor deforestation, as well as to promote forest conservation and sustainable use of natural resources (Brazil, 2016). To date, the fund has raised over USD 1.2 billion in donations, mainly from the government of Norway, with smaller amounts from Germany and Petrobras (the Brazilian semi-public petroleum industry; Correa et al, 2019). In exchange for the donations, the Amazon Fund issues certificates of avoided carbon emissions from deforestation, which are nominal and non-transferable (Brazil, 2013b).…”

The Performance of REDD+: From Global Governance to Local Practices

“…For REDD+, this implies comparing result-based payments from carbon funds and markets for forest managers at the end of the policy's time frame, compared to the costs incurred, by using a cost-benefit analysis of REDD+ initiatives. Correa et al [32] detail the allocation of financial resources from the USD 667 million Brazilian Amazon fund across different stakeholders for scientific and technological development, sustainable production, monitoring and control, and land tenure regularization. However, in terms of the forest conservation effectiveness, as well as emissions reductions from deforestation, they found that deforestation rates had risen since 2013, despite increased fund disbursements.…”

“…For REDD+, this implies the analysis of outputs (such as a single REDD+ project), outcomes (for example, behavioral changes of forest managers due to REDD+ initiatives), and/or impacts (such as an increase of carbon sequestration and carbon stocks in a forest) in a specific landscape. Correa et al [32] attribute the apparent lack of effectiveness to the distribution mechanism of the Brazilian Amazon fund that prioritized diverse organizations rather than a strategic selection of projects due to its predetermined theory of change. Rosa da Conceição et al [42] looked at REDD+ in Ecuador and Peru and the pathways of two government-led, incentive-based forest conservation and poverty reduction programs for forest-based populations.…”

“…These experiences highlight the importance of both local context and culture, as well as subnational, national, and international interests, in understanding performance narratives. Correa et al [32] recount the significant investments in the Brazilian Amazon fund, widely seen as successful. However, when dissected, the funds' performance reflects the arbitrary support of different projects adopting highly different theories of change, many of which are not chiefly interested in reducing deforestation, but based on the stakeholder's own preferences and activities.…”