13.6.2 Innovative forestry-related initiatives in Brazil

SPVS Parana, Brazil1 - An interesting initiative in the field of the restoration and protection of Atlantic rainforest in ParanaState in Brazil was developed by SPVS, a national NGO, i.e. the Society for Wildlife Research and Environmental Education. Parana's coast is part of the biggest remnant of the Atlantic Rainforest biome, which once covered nearly all of Brazil's coast and is now reduced to less than seven per cent of its original extent. The investors in the project are three major American multinationals: AEP (an energy producer), General Motors and Chevron. With the investor's money 17,000 acres of former buffalo ranches were acquired. The revenue generation for investors comes from ownership of the land and aspects related to that. AEP invested USD 5.4 dollars in purchasing the land and in creating an endowment fund for maintenance costs. As a result, carbon emission credits will be owned by AEP, under the US voluntary carbon emission compensation schemes. The project is at a mature stage.

FUNBIO, Atlantic Forest Fund, Brazil2 - One of the previous Brazilian Ministers for the Environment, Mr Carlos Minc, wished to introduce a scheme for investment in all protected areas in Brazil and to set up a mechanism for distributing funds to worthwhile environmental projects. He succeeded in setting up the National System for Conservation Units (SNUC), which was codified in a federal law which came into force in 2000.3 This act lays the foundation for a duty to compensate for environmental damage. FUNBIO, the NGO Brazilian Biodiversity Fund, was requested to test a new innovative method for the distribution of funds accumulated under the Environmental Compensation Law. Within this framework, FUNBIO established a project known as the 'Atlantic Forest Fund'. An inventive aspect of the Atlantic Forest Fund, in comparison with other nature compensation and PES schemes, is that Brazil's Environmental Compensation Law does not determine a price linked to the market cost of replacing damaged areas. Instead, it requires "the assessment of a licensing fee based on the unmitigatable impact of the project development, the proceeds of which are then channelled to conservation projects in protected areas." The ambitious project was set up as a state-wide ecosystem marketplace. The main goal of the Atlantic Forest Fund is to channel private money into ecosystem development projects disregarding the source of the money: either from PES or philanthropic organisations or individuals. The project has a wide scope, the funds are invested in all types of protected areas. The organisational structure has the following components: the main one is the Atlantic Forest Fund, i.e. the 'compensation fund' that administers the money collected under the Environmental Compensation Law; the other one is the 'donation fund' that administers the money from philanthropic donors. Presently, USD 3.1 million in compensation payment schemes come from the German steel and engineering giant Thyssen-Krupp, while a donation of USD 510,000 has been made available by Germany's KfW Bank Group (formerly the Kreditanstalt fur Wiederaufbau, or the Reconstruction Credit Institute).