Brazil's Acre state and German development bank agree to performance-based payments linked to REDD+
In December, the Brazilian state of Acre took a critical step towards realizing REDD+ by signing an agreement with German development bank KfW to cut greenhouse gas emissions from deforestation in exchange for up to €19m. Crucially, the funding is conditional on tangible reductions in greenhouse gas emissions.
Acre is one of 26 Brazilian states, located in the far north-western corner of the country, deep in the Amazon rainforest. Despite experiencing an intense period of deforestation in the 1980s, the state retains 87% of its forest cover. And Acre has, for the past decade, shown leadership in pursuing a model of economic development that promotes forest protection while tackling poverty – as was featured in The Economist late last year.
Acre’s progressive policies have attracted foreign funding in the past. But according to the head of Acre’s Institute for Climate Change and Environmental Services, Eufran Amaral, the signing of this cooperation agreement is different because it aims to pay based on performance. “We receive resources according to carbon emission reductions.”
“More importantly, it is an international recognition of the whole effort of a state that has been working with the valuation of environmental services for decades,” he adds.
Notably, WWF has played a key role in making this agreement possible. WWF-Brazil’s regional office in Acre has been supporting the state government to implement environmentally sound development policies for a number of years. Since 2009, this work has been supported by funding from UK-based broadcaster Sky, alongside thousands of individual donors, under the name of Sky Rainforest Rescue. In these last weeks, donations through Sky Rainforest Rescue were critical in bringing together a meeting of the state’s Science Committee to approve the baseline for carbon monitoring in Acre – a key requirement to assess performance and, as such, to release the KfW funding.
The €19m are set to flow over the coming four years and will be specifically earmarked for programmes aimed at increasing sustainable land management practices and conserving the state’s forests. In particular, the funding will support Acre’s system of incentives for environmental services (SISA), which rewards local people for protecting the forest on their land.
This new guarantee of funding will help Acre to roll out its SISA programme, generating important lessons for the socially-inclusive implementation of REDD+. It will also become a test-bed for learning how to design systems for monitoring and implementing performance-based payments linked to emissions reductions. And, as such, we can expect many useful learnings to emerge from Acre over the coming years.
While Acre already receives funding through the federally-operated Amazon Fund, the agreement with KfW is particularly interesting as it is directly targeted at the sub-national level. Indeed, according to Hubert Eisele, manager for Rainforests at KfW, this investment in Acre "is the first [KfW] project that allocates conservation funding to a state within a country.”
Eisele adds, “Because it is an innovative project, it will have a big impact nationally and internationally, because Acre is a state that is at the forefront of this new type of project.”