Why a green economy is needed to stop Amazon deforestation

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Ilona Szabó de Carvalho, Executive Director, Igarape, Inc

• Future of the Amazon rainforest is at a dangerous environmental tipping point if deforestation levels rise another 5%.
• Collective action must be taken by countries in the Amazon Basin, underpinned by the latest scientific and technological advances.
• Building a successful green economy will depend on the political will to crack down on illegal deforestation and verify land ownership and usage.

This is one of a series of articles written by Young Global Leaders with action-oriented ideas to improve the state of the world by 2030.

The Amazon Basin is on the brink of an irreversible tipping point with planetary implications. Spanning eight South American countries, the Amazon is home to over 60% of the world’s tropical forests, 20% of all freshwater and about 10% of biodiversity. Owing to land speculation and insatiable global demand for meat, soy, gold and other commodities, roughly 20% of the Amazon has been razed to the ground.

If deforestation levels rise another 5%, the world’s largest tropical forest could experience catastrophic die-back, essentially dooming the Paris Agreement. There are fears this process may have already started and the prognosis does not look good. Deforestation reached a 12-year high in Brazil in 2020.

According to MapBiomas, a project involving universities, NGOs and technology companies that maps land use in the region, over 95% of all deforestation in the Amazon is illegal. If governments and markets radically revalue the rainforest’s biodiversity, then this nightmare scenario may be unavoidable.

If the Amazon Basin undergoes die-back, the equivalent of a decade of global emissions could be released. The forest will also lose its ability to absorb billions of tons of CO2, disrupting hydrological cycles, evapotranspiration and ocean currents. The agri-industrial sector could collapse, along with staggering biodiversity loss. Hydro-electric facilities will be shuttered, declining water tables will make cities unliveable and fisheries could collapse.

Science-based solutions

Achieving zero deforestation in the Amazon by 2030 requires a clear-headed scientific assessment and science-based targets to tackle the problem. The Scientific Panel for the Amazon, a coalition of nearly 200 leading scientists from the region, should become permanent. One of the best ways to protect the forest is by stimulating a green economy through the extraordinary wealth potential of its biodiversity.

Tackling illegal deforestation

Building a green economy requires cracking-down on illegal deforestation and the networks that sustain it. Brazil’s environmental enforcement agency, IBAMA, handed out 20% fewer fines in 2020 due to funding cuts and reduced sanctions – less than 3% of fines are ever paid. Illegal deforestation occurs in several ways: it typically begins with illegal land invasions followed by the clearance of forest for commercial agriculture and ranching.

Another approach involves wildcat mining, mostly for gold, which undermines local ecosystems and human health. Forests are also affected by wildlife trafficking, fuelled by unrelenting global demand for rare birds, reptiles and mammals. Massive investment in high resolution remote sensing, alert systems using AI, tracking illegal commodities in global supply chains, and strengthening investigation and prosecution is essential. Indeed, two thirds of the world’s supply chains do not have policies on illegal deforestation.

What’s the World Economic Forum doing about deforestation?

Halting deforestation is essential to avoiding the worst effects of global climate change.

The destruction of forests creates almost as much greenhouse gas emissions as global road travel, and yet it continues at an alarming rate.

In 2012, we brought together more than 150 partners working in Latin America, West Africa, Central Africa and South-East Asia – to establish the Tropical Forest Alliance 2020: a global public-private partnership to facilitate investment in systemic change.

The Alliance, made up of businesses, governments, civil society, indigenous people, communities and international organizations, helps producers, traders and buyers of commodities often blamed for causing deforestation to achieve deforestation-free supply chains.

The Commodities and Forests Agenda 2020, summarizes the areas in which the most urgent action is needed to eliminate deforestation from global agricultural supply chains.

The Tropical Forest Alliance 2020is gaining ground on tackling deforestation linked to the production of four commodities: palm oil, beef, soy, and pulp and paper.

Get in touch to join our mission to halt to deforestation.

Robust land registration system

One of the most significant priorities is ensuring a transparent and accountableland registration system. One of the trickiest problems in the Amazon is developing a system that allows property titles and land demarcations to be properly registered and monitored over time. There is considerable fraud and corruption in the land registries of most Amazonian countries.

Creating a system that is digitized, accessible and up-to-date is critical to enforcing existing laws and also stimulating legal markets. Developing an online dispute resolution system to address outstanding legacy litigation related to competing land claims is no less critical. While difficult, the development of a blockchain system of verification for land registries to demonstrate a clear chain of ownership and custody would vastly improve the potential of a green economy.

Financing reforestation

Another priority is accelerating reforestation and regeneration of land. In Brazil, home to 60% of the Amazon’s tropical forests, the state of Pará is an obvious candidate. In Colombia, Peru and Ecuador with roughly 23% of the Amazon between them, Amazonas, Loreto and Pastaza states stand out. A priority is to build a predictable pipeline of reforestation, biodiversity conservation and sustainable forest management projects that can rapidly scale.

Financing could be accelerated by the Reducing Emissions from Deforestation and Forest Degradation (REDD+) initiative. International financing from the Amazon Fund, US support from the new Biden administration and tools such as green bonds will help. Local financing is also potentially game-changing. So too are initiatives such as the Global Commons Alliance, One Trillion Trees and investor activism, including from sovereign wealth and pension funds. In 2019, over 230 global investors with more than $16 trillion in assets warned companies to either meet their deforestation commitments or risk economic consequences.

Fostering innovation for green growth

Innovative solutions are crucial to stimulate the green economy and support the communities who are the custodians of the Amazon Basin. What is needed is DARPA-like approach to ramp-up the research and development, and related innovation and regulatory frameworks to engineer an inclusive bioeconomy in the Amazon. This includes research to collect and systematize Amazon biodiversity – including drones to sample biodiversity in hard-to-reach areas and the study of fruits, nuts, plant extracts and fibres – and digital platforms to secure biological assets for the public good.

These efforts must be accompanied by clear enforceable rules to share data and safeguards to promote local value creation and retention. It may also include the formation of low- and high-tech innovation hubs in selected countries to stimulate local innovation, harness traditional knowledge and ensure local ownership and wealth creation.

A combination of government, private and civil society partners are essential for advancing the green economy and delivering zero deforestation. In Brazil, there are several coalitions tackling specific dimensions of the challenge. Alliances such as the Concertation for the Amazon and the Brazil Coalition for Climate, Forests and Agriculture are playing a pivotal role in shaping the agenda and connecting stakeholders. Local governments are also stepping-up even while the country’s federal government is missing in action.

Concerted international and regional efforts – such as the Leticia Pact – combined with national and subnational interventions could drive a positive agenda forward and increase the cost of government inaction. As a member of the aforementioned coalitions and a wide range of global networks, the Igarape Institute is committed to advancing these processes.

(The author would like to thank Robert Muggah, Juan Carlos Castilla-Rubio and Julia Sekula for their contribution to this article.)

This decade the world will likely witness more social, economic and environmental changes than over the last century. While the COVID-19 pandemic called for immediate reforms, the mainstreaming of stakeholder capitalism, the impacts of climate change, the escalation of next-generation technologies, and the empowerment of citizenship will pave the way for a ‘resetting’ of the global economy and social practices.

This article series presents pioneering, forward-looking, and action-oriented ideas that should be adopted up to 2030 to improve the state of the world. The WEF invited a group of individuals who have been selected as Young Global Leaders (YGLs) in the course of their careers. Authors include heads of government, business leaders and scientists, prominent intellectuals or civil society leaders.

On an annual basis and since 2004, the World Economic Forum identifies the world’s most promising leaders under the age of 40 — people driving innovation for positive change across civil society, arts, culture, government and business. This series, an initiative of the Forum of Young Global Leaders of the World Economic Forum, harnesses the expertise and experience of this group of leaders.

For additional information on the article series, please contact Rodrigo Tavares (curator).