Rainforest in Brazil
Nature conservation

Nature conservation

Forest conservation pays off

Around one-fifth of the world's CO₂ emissions arise because forests are destroyed and the carbon that they store is released. That is why protecting forests is key to protecting the climate. KfW expert Christiane Ehringhaus explains how an innovative financing approach is supporting the international efforts.

The author
Christiane Ehringhaus

Dr Christiane Ehringhaus coordinates the REDD for Early Movers programme at the Latin America division of the KfW Development Bank. She studied biology in Bayreuth and Florida and has a PhD in Environmental Science from the Yale University.

The Brazilian federal state of Acre in the Amazon basin is home to a very special treasure: 14 million hectares of untouched rainforest. The 1980s saw trade union members fighting cattle farmers and logging companies in order to protect the forest. One of them, rubber tapper Chico Mendes, sadly made the headlines by paying for his commitment with his life.

Since then, the government has developed an innovative policy that has enabled it to sharply reduce the rate of deforestation in recent years. The government invested in forest conservation for decades, both by creating incentives for the sustainable use of land and by reinforcing government regulation.

The establishment of an innovative state system to promote environmental services called SISA (Sistema Estadual de Incentivos a Serviços Ambientais), which is considered one of the leading systems of its kind in the world. Its achievements include facilitating the creation of the REDD international forest conservation programme.

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REDD stands for Reducing Emissions from Deforestation and Forest Degradation - an international system of payments that rewards the conservation of forests. The REDD concept involves international compensation payments for the proven reduction of CO₂ emissions caused by deforestation. The German Federal Government is supporting this innovative approach to financing with the “REDD for Early Movers” programme in order to help the pioneering regions, that have already reduced their deforestation rates on their own initiative. It was presented at the Rio+20 conference in June 2012.

Satellites are used to monitor how the forest coverage and therefore the emissions for a particular year have changed in relation to a historical average. In the Brazilian federal state of Acre, for example, five US dollars for every tonne by which emissions are cut are added to a state promotional fund. The funding for the REM programme in Acre is provided by the German Federal Ministry for Economic Cooperation and Development (BMZ) and the International Climate Initiative (IKI) of the German Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety (BMUB). It is managed by KfW Development Bank. Compensation has thus far been paid out for a reduction in emissions amounting to six million tonnes, which is the volume of CO₂ emitted by about three million cars each year in Germany.

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KfW Development Bank supports numerous projects in the field of climate and environmental protection.

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Most of the money goes to local people, especially small farmers, rubber tappers and indigenous groups who make a particularly important contribution to preserving the rainforest. This results in an income from the sustainable use of the forest. 15.000 families have benefited from the incentives to date, and another 5806 indigenous families have received support from a dedicated indigenous people’s programme. This means that the REM programme provides reimbursement for past climate protection efforts on the one hand while also creating incentives for further reducing the rate of deforestation and sustainable development on the other.

REM programme

The REM programme in Acre has been expanded at COP23, with the UK government now assisting with around GBP 17 million. Another EUR 10 million will come from Germany's Federal Ministry for Economic Cooperation and Development (BMZ). The agreements with the state of Mato Grosso concerning German and British funds have also been signed in Bonn, Germany.

The global REM programme is growing. In 2015, agreements were signed with Columbia at the climate summit in Paris. The programme is currently being prepared in Ecuador. Additionally, in Brazil, a partnership has been formed with the state of Mato Grosso.

Unlike Acre, this is a state of superlatives. Firstly, Mato Grosso has vast expanses of forest and incredible cultural diversity, with a large number of indigenous populations and areas. In addition, the state is the largest agribusiness producer in Brazil and one of the largest in the world, with meat and soy production of global importance; a classic driver of deforestation.

The challenge in Mato Grosso is substantial. A development model must be implemented to safeguard forest conservation, protect human rights, encourage smallholders and indigenous people, but also stimulate sustainable production in the agribusiness sector and in global commodities. An adventure from which the world can gather experience.

Published on KfW stories: Monday, 13 November 2017