EUROPEUM Institute for European Policy

Amazon is the largest rainforest in the world. It hosts 80% of the world’s terrestrial biodiversity and it plays a significant role in soil conditioning, clean air, the water cycle, and a vital carbon store that slows down the pace of global warming. However, the most recent analysis suggests a sharp growth in deforestation over the past two months in particular, with about a hectare being logged every minute. Should this pace continue, the Amazon rainforest will rapidly reach a point at which natural recovery will be impossible. [1]

The role of the rainforest in stabilizing the global climate has been weakened by the extensive land use for agriculture, pasture, and mining. Scientific communities warn that “the forest is in growing danger of degrading into a savannah, after which its capacity to absorb carbon will be severely diminished, with consequences for the rest of the planet”.

In this context, Nils Martin Gunneng and Georg Witschel, ambassadors of Norway and Germany in Brazil, respectively, met on July 4 with the Brazilian Environment Minister, Ricardo Salles, to discuss Brazilian policies pertaining to the Amazon rainforest. Specifically, the use and management of the Amazon Fund developed under the United Nations Framework Convention on Climate Change (UNFCCC) to promote the preservation and sustainable use in the Brazilian Amazon. [2] The meeting took place due to the Brazilian government’s intention of restructuring the fund management bodies, such as reducing the Amazon Fund Guidance Committee (COFA) from 23 seats to only seven.

COFA is responsible for establishing the guidelines of the Amazon Fund and monitoring the application of its resources. Currently, eight of its seats belong to agencies of the Federal Government, nine for states covered by the Amazon forest and six for representatives of civil society. With the new structure announced, its size should be reduced to five seats for the federal government, one for states’ representatives and one for civil society [3], providing an overwhelming majority to the Federal amongst the other representatives.

Additionally, the Brazilian government has publicized the intention to amend the fund’s regulations, allowing, for instance, the use of resources to expropriate and pay compensation to private property owners living illegally in conservation areas. Germany and Norway, the main contributors to the fund, were in opposition to both actions, asserting that the fund has recorded positive results since its inauguration under its current configuration.

The European Union takes no part in the fund, and, consequentially, has no direct influence on the main mechanism designed to protect the Amazon forest. The only three donors are Norway, a non-EU member, with about 93.8% of the US$ 1.3 billion in donations received, Germany (5.7%) and Petrobras (0.5%). [4] It prompts the question about what role the EU can actually play in strengthening the environmental protection in the globe, and not only within its bounds.

Regardless of the importance of financial support, conservation and sustainable use of forests cannot be ensured merely through funding and financial incentives alone. On one hand, cooperative programs, such as the Amazon Fund, play an important role as transnational governance, offering not only financial resources but also integrating actions to develop international environmental projects. On the other hand, funding programs might be very sensitive to the domestic political turmoil, in a way that certain national agendas may conflict with global commitments agreed upon in the past.

For instance, the Brazilian government’s denial of global warming, in addition to its enlargement of the agribusiness and mining agendas, could lead to the end of the Amazon Fund, as announced by the Brazilian Minister of the Environment. [5]

Therefore, considering that transnational cooperation through foreign investments might be undermined by changings in the national policies, commitments on environmental issues may be addressed by a multi-stakeholder climate governance system through the involvement of subnational and non-states actors. Jill Duggan [6] outlines some advantages of the role played by subnational entities on the climate and environmental governance: “Subnational governments are often closer to climate problems than the UNFCCC parties themselves, and have experience, expertise and peer influence that can support the development of progressive policies and increased ambition.” [7]

In this regard, the Lima Conference Summit (COP20, held in Peru in 2014) introduced the Non-state Actor Zone for Climate Action (NAZCA), a platform that officially recognizes climate mitigation initiatives, distinct from national pledges. In present times, the NAZCA counts 12.468 non-state stakeholders, such as cities, regions, companies, investors and civil society organizations, running 20.035 actions. [8] Despite the challenges faced by the non-states actors – such as national governments obstructing their work and questioning their credibility – they can undertake projects on protection, transparency and sustainable development, acting as important partners tackling the climate change.

Climate diplomacy can also be pursued by trade agreements bound to and contingent upon fulfilment of sustainability criteria. In this sense, the European Union, as one of the largest importer of commodities in the world, [9] has included provisions in trade agreements, ensuring the sustainable development in agrarian commercial partners.

In late June, 2019, the EU and Mercosur (the South American economic bloc, currently comprising Argentina, Brazil, Paraguay and Uruguay) announced a comprehensive free trade agreement, easing the market access between the two blocs through the removal of duties, tariffs and increasing quotas of imports, encompassing services, investments, industrial and agricultural goods. Mercosur exports are mostly made up of agricultural goods. However, an FAO report (2016) [10] showed that commercial crops and pasture have driven over 90% of all deforestation in Brazil and Paraguay (period measured between 1999 and 2005).

During the last stages of the negotiation, a letter published in the journal Science, signed by more than 600 scientists, urged the EU to include provisions in the agreement ensuring the protection of human rights and the environment. Indeed, the agreement text contains a chapter enhancing the integration of sustainable development, establishing principles and actions concerning labor and environmental aspects. Notwithstanding, its effectiveness can be undermined by the enlargement of the Brazilian mining and agribusiness industry, expanding the land use on protected areas.

To resolve any dispute regarding an alleged non-compliance with the provisions, the agreement deploys the consultations process between the parties under the supervision of the so-called “Sub-Committee on Trade and Sustainable Development”, or the establishment of an arbitration panel. In a case of non-compliance of certain arbitral adjudication, the chapter Dispute Settlements states that “the complaining party can suspend concessions or other obligations arising from the provisions referred in [the agreement], equivalent to the nullification or impairment of benefits” (article 18).

This essentially means that non-compliance with sustainability and forest protection provisions can pose tangible economic consequences, yet it remains to be seen whether this will disincentive the rampant logging that has taken place since Bolsonaro’s inauguration.

Deforestation associated with the cultivation in forest areas can be driven not only by factors in the country of origin but also by factors on the demand side. The expansion of land use for agriculture causes nearly 80% of the deforestation in the world, whereas the growing global population increases the demands for food, animal feed, timber, biofuel and other commodities. Hence, strengthening domestic legislation towards higher transparency on the supply chain, and simultaneously stimulating sustainable consumption, represents an important action in the environmental policies.

Although the EU has already regulated illegal timber [11], illegal fishing [12] and imports of minerals from conflict-affected and high-risk areas [13], it is still lacking legislation for agricultural trade linked to deforestation. The report “Feasibility study on options to step up EU action against deforestation”, released in January 2018, shows that EU has imported 33% of the crops farmed in the deforested area, rising to 39% of the soy and 27% of the cocoa and coffee. [14] Regulatory actions dealing with environmental protection can reinforce the trade and consumption with lower deforestation impact, as well as promote transparency on the origins and the output conditions.

Indicative of the EU’s desire to adopt a stronger leadership role in the protection of the world’s forests, the European Commission launched on July 23 the paper “Stepping up EU Action to Protect and Restore the World’s Forests”. [15] The document asserts the effort already done to accomplish better environmental governance, and proposes “a partnership approach – close cooperation with producer and consumer countries as well as business and civil society”. The main target is promoting “the land governance, sustainable forest management and reforestation, transparent supply chains, effective monitoring, sustainable finance and multilateral cooperation”.

Comprising five main priority actions, [16] the proposal introduces a variety of measures, such as establishing a platform for multi-stakeholder and Member State dialogue on deforestation, promote trade agreements that include provisions on the conservation and sustainable management of forests, and develop an EU Observatory on deforestation, forest degradation, changes in the world’s forest cover, and associated drivers.

Nonetheless, despite all the legislative and non-legislative efforts so far applied, the Commission foresees that the objective to reduce gross tropical deforestation by 50% by 2020 is unlikely to be met. Satellite data shows that logging has rapidly increased, particularly in the Amazon rainforest. In Brazil, June 2019, was the first month in the past five years in which the country has lost forest area bigger than Greater London. [17] In this scenario, isolated or individual actions will prove inadequate and insufficient in halting environmental degradation.

The Commission’s communication presents a comprehensive set of actions led by EU, in order to reverse the trend of deforestation, yet it falls short of assuming a global leadership role underpinned by the economic and political clout that the EU can wield. As the mandate of the incoming European Commission begins from November, it remains to be seen how and if it will act decisively on this crucial issue, which, in the Commission words, “threatens not only the economy but the humanity itself”.

Helder Hermani

 

[1] Source: https://www.theguardian.com/world/2019/jul/25/amazonian-rainforest-near-unrecoverable-tipping-point. Access: 31/07/2019.
[2] Amazon Fund: Launched in 2008, it is a “REDD+ mechanism created to raise donations for non-reimbursable investments in efforts to prevent, monitor and combat deforestation, as well as to promote the preservation and sustainable use in the Brazilian Amazon”. Source: http://www.amazonfund.gov.br/en/home/. REDD+: Programme on Reducing Emissions from Deforestation and Forest Degradation in Developing Countries.
[3] “Norway and Brazil’s negotiations about the Amazon Fund are ignoring the failure to address the drivers of deforestation”: https://redd-monitor.org/2019/07/12/norway-and-brazils-negotiations-about-the-amazon-fund-are-ignoring-the-failure-to-address-the-drivers-of-deforestation/

[4] “The Amazon Fund’s Activity Report for the year 2018”. June, 2019. Available at: http://www.amazonfund.gov.br/en/noticias/noticia/Annual-Report-2018-00001/
[5]https://www.reuters.com/article/us-brazil-environment-fund/brazil-plan-to-revamp-amazon-fund-irks-norway-germany-sources-idUSKCN1T1160
[6] Independent consultant and founder of Carbon Policy Associates Ltd.
[7] “The Role of Sub-state and Non-state Actors in International Climate Processes: Subnational Governments”. Jill Duggan. Chatham House, 2019.
[8] Source: https://climateaction.unfccc.int/. Access: 31/07/2019.
[9] According to the UN COMTRADE (United Nations International Trade Statistics Database), the EU-28 imports worth $ 2.335,30 billion of all HS (Harmonized System) commodities trade with the World. It stands as the second largest commodities importer, after the USA only, who worth $ 2.611,14 bn. Period covered: 2018. Source: https://comtrade.un.org/labs/dit-trade-vis/?reporter=97&partner=0&type=C&commodity=TOTAL&year=2018&flow=2
[10] State of the world’s forest Report, p. 21. FAO, 2016. Available at: http://www.fao.org/3/a-i5588e.pdf
[11] Regulation (EU) No 995/2010 and FLEGT – Forest Law Enforcement, Governance and Trade.
[12] Council Regulation (EC) No 1005/2008 and Commission Regulation (EC) No 1010/2009.
[13] Regulation (EU) 2017/821 of the European Parliament and of the Council.
[14] Covering the period 1990-2008. Source: “Feasibility study on options to step up EU action against deforestation”, p. 79, European Commission, 2018. Study funded by the European Commission and undertaken by Vito, IIASA, Cicero, K.U. Leuven and IUCN-Netherlands. Available at: http://ec.europa.eu/environment/forests/pdf/feasibility_study_deforestation_kh0418199enn_main_report.pdf
[15] Available at https://ec.europa.eu/environment/forests/pdf/EU_Communication_2019.pdf
[16] 1 – Reduce the EU consumption footprint on land and encourage the consumption of products from deforestation-free supply chains in the EU; 2 – Work in partnership with producing countries to reduce pressures on forests and to ‘deforest–proof’ EU development cooperation; 3 – Strengthen international cooperation to halt deforestation and forest degradation and encourage forest restoration; 4 – Redirect finance to support more sustainable land-use practices; 5 – Support the availability of, quality of, and access to information on forests and commodity supply chains. Support research and innovation.
[17] “The Guardian view on Amazon deforestation: Europe must act to prevent disaster”. Editorial. July, 2018. https://www.theguardian.com/commentisfree/2019/jul/28/the-guardian-view-on-amazon-deforestation-europe-must-act-to-prevent-disaster. Access: 31/07/2019.

 

 

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