Why are European countries increasingly supporting the Amazon Fund?

When Jair Bolsonaro left the Brazilian presidency, the Amazon fund had already been frozen, but his departure sparked renewed European interest in promoting efforts to preserve the so-called lungs of the earth.

Created in 2008 by Norway and Brazil, the Amazon Fund is the main cooperation vehicle used by Europe to invest in projects in the Brazilian part of the Amazon rainforest. Currently, 93.8% of the funding comes from Norway, another 5.7% donated by Germany and 0.5% from Petrobras, a Brazilian state-owned oil and gas company.

But under Bolsonaro, the committees responsible for running the fund have been dismantled, prompting fears among environmentalists that the politician might destroy the mechanism that has raised more than 3.4 billion reais (equivalent to 616 million euros) in donations to stop deforestation of the rainforest. .

However, since Luiz Inácio Lula da Silva defeated Bolsonaro in the last election, passing a law that restored the fund in January, the initiative is back — and getting more attention than ever from European countries.

Norway, Germany, France, Switzerland and the United Kingdom

Norway and Germany, for example, have announced that they will resume their donations, which were frozen during the Bolsonaro government.

Oslo is expected to remain the main donor in the coming years because it has a long tradition of international cooperation, and invests heavily in tropical forests, Brazilian ecologist Fernando Matias, political advisor to the Rainforest Foundation in Norway, told Euronews. Matthias has lived in Norway for several years and works with environmental cooperation policies.

“The Amazon Fund is part of a broader policy of the Norwegian government focused heavily on its climate and forest strategy. Norway has a tradition of international cooperation and is one of the few countries in Europe to allocate 1% of GDP to international cooperation. Although it is a small country, However, she is an important player on the international stage.”

Foreign Minister Catherine Colonna said during an official visit to Brazil in February that France was among the countries now considering supporting the fund.

France is examining the possibility of a bilateral contribution, as is the European Union, which is also very actively examining the possibility of a contribution [para o Fundo Amazónia]Colonna said at a news conference in Brasilia.

Switzerland is another example of willingness to cooperate. “Switzerland was discussing the Amazon fund in its informal exchanges with the transitional Brazilian authorities. A contribution to the fund is currently being considered,” the government spokesperson said in December.

The UK also said it was considering the possibility of joining the group, though it did not disclose information on how much it would contribute. The UK Embassy in Brazil said, in a note sent to Euronews in December.

Outside Europe, US participation has not been confirmed, but analysts expect a donation of about $50 million.

Donations have ‘geopolitical values’

According to Adriana Ramos, a consultant at the Instituto Socioambiental (ISA), a Brazilian civil society organization, the Amazon fund attracts foreign countries because it is a profitable strategy for investing in tropical forests. In the past, Adriana was the civil society representative on the committee that oversees the fund’s strategy.

“There is a political interest in supporting a new government committed to reducing deforestation, but there is also a more practical reason behind this support from European countries. For them, it is profitable,” Ramos told Euronews.

“These are countries that are already committed to reducing emissions, so they have a direct stake in the carbon in the forests.” Although investing in the Amazonas fund does not give them credits to offset their own emissions, it generates a kind of testimonial that has great geopolitical value,” he said.

The fund’s money aims to finance projects to preserve the forest and ensure its sustainable development, and its use is supervised by the National Bank for Economic and Social Development (BNDES).

Donations received so far have been directed towards financing 102 projects conducted by NGOs or government agencies, such as the Brazilian Institute of the Environment and Renewable Natural Resources (Ibama), which is responsible for monitoring and combating deforestation. According to government reports, 207,000 people – mostly Amazon residents – have been positively affected by the projects so far.

The fact that the positive impacts of projects can be easily measured by the governance system in place is another reason for new donors to join the Amazonas Fund in the near future, according to Eugenio Pantoja, Director of Public Policy at the Instituto de Investigação Ambiental na Amazónia (IPAM), which participated in the Fund periodic evaluations.

New research published in the Evolutiva Political Economy Magazine at the end of February shows that the Amazon Fund’s positive effects are “largely due to its three interrelated, innovative dimensions”: the multi-stakeholder management of the fund, its donor-based payment and the fact that non-repayable project financing is It is implemented by BNDES.

New projects are in preparation

European countries are well aware of the importance of tropical forests in combating climate change and biodiversity loss, and governments across the continent are indicating that this importance could spur new contributions to the Amazon Fund.

The Swiss Federal Foreign Office highlighted the importance of the Amazon rainforest to climate change when it confirmed directly that the country is considering initiating contributions in the future.

Over the coming months, the Amazonas Fund is expected to resume its selection of new projects, as well as to restore those that were interrupted in 2019 after Bolsonaro dismantled the governance committees that allowed the mechanism to distribute its funds.

Environmentalists believe that the fund’s focus will be on the sustainable development of small-scale production in the Amazon, support for indigenous communities and, of course, monitoring and combating illegal deforestation.

“When European countries agree to finance the fund, they are in fact financing the general policies of the Brazilian government aimed at reducing deforestation in the Amazon,” Eugenio Pantoja, of IPAM, told Euronews.

“It’s not just about investing in the forest: it’s also about supporting these three main lines of business for the years to come, and that’s a very important statement.”