Norway and Brazil are currently negotiating the future of the Climate and Forest Agreement between the two countries. In a press statement, the Norwegian government claims that, “From Norway’s point of view, the Amazon Fund has worked well until now.”
Unfortunately, that’s the sort of evidence free wishful thinking that has accompanied REDD from the start.
Norway announced its US$1 billion REDD deal with Brazil in December 2007 at COP 13 in Bali.
In the three years before the deal, deforestation in Brazil had fallen dramatically. But since the money from Norway started pouring into the Amazon Fund at the end of 2008, the rate of deforestation has remained pretty much the same.
And since 2014, deforestation has been increasing once again:
Despite the clear evidence that deforestation rates have not reduced since payments to the Amazon Fund began, at the 2018 Oslo Tropical Forest Forum, on the tenth anniversary of the Amazon Fund, Elvestuen said,
“If we look at the numbers on how deforestation has slowed in Brazil in those ten years, the Fund has definitely been a success. First, you get the results, then you get the support from us. [But] in the last two years, deforestation numbers were going in the wrong direction. So, we will pay accordingly.”
The Amazon Fund manages the money that Norway has handed over to Brazil for temporarily reducing deforestation. The current negotiations between the two countries are about the steering structure of the Amazon Fund. In a press statement on the Norwegian government’s website, Ola Elvestuen, Norway’s Minister of Climate and Environment, says that, “Entering a form of cooperation with Brazil that weakens the foundation of our partnership is not an option.”
Elvestuen argues that there is “no need to change the steering structure of the Amazon fund”.
Termination of the Amazon Fund is “a possible outcome”
Elvestuen admits that the termination of the fund is “a possible outcome”. He also says that Norway is worried about “the recent developments in Brazil and reports on increased deforestation in the Amazon”.
Brazil’s Minister of the Environment, Ricardo Salles, wants to change the governance of the Amazon Fund. Salles wants to reduce the size of the Amazon Fund Steering Committee from 23 seats to seven. Five would be for the federal government, one for states’ representatives and one for civil society
Norway and Germany, the other main funder of the Amazon Fund, have written to Salles requesting that the current structure of the Amazon Fund remain unchanged.
Over the past 10 years, the Amazon Fund has received a total of R$3.1 billion (US$1.2 billion), 93.3% of which came from Norway. The Fund is managed by Brazil’s state development bank, BNDES.
Head of the Amazon Fund removed
Salles claims to have found problems with the fund’s contracts. Salles looked into a sample of contracts under the Amazon Fund. “There are problems in 100% of NGO contracts,” Globo reported Salles as saying.
In May 2019, BNDES removed the head of the Amazon Fund, Daniela Baccas, following Salles’ claims.
In their letter to Salles, Norway and Germany deny any problems with the Amazon Fund contracts and state that BNDES carries out annual audits to international standards. The letter states that,
None of the tax and impact audits already carried out has revealed any irregularity or mismanagement of the fund’s resources.
At the end of 2018, Mongabay wrote a review of the Amazon Fund after ten years. Mongabay spoke to several experts and “got mixed reviews”.
The Amazon Fund “backed many innovative local projects”, Mongabay reported, and according to Guimarães, the executive director at the Amazon Environmental Research Institute (IPAM), “The Amazon Fund was perhaps the main source of resources for society, academia, NGOs, governments.”
Environmental organisations that worked with forest communities complained about the difficulty in getting money from the Amazon Fund.
The Amazon Fund provided funding for IBAMA, Brazil’s environmental agency. US$54 million was targeted at preventing and fighting forest fires, and monitoring and controlling illegal logging. Fines worth more than US$650 million were imposed.
But under the government of President Michel Temer, IBAMA’s budget was cut dramatically.
Soy and China
Last year saw a record soy harvest in Brazil. China bought 10 million more tons of Brazilian soy. Demand from China largely explains the ever increasing area of land in Brazil turned over to soy farming. Donald Trump’s tariff war with China meant that China stopped buying soy from the USA.
In June 2019, deforestation in the Brazilian Amazon soared by more than 88% compared to the same month in 2018. That’s the second consecutive month of rising deforestation under the Jair Bolsonaro regime. In May 2019, deforestation in Brazil reached the fastest rate in a decade.