Environment Minister Ricardo Salles tackles the “ Amazonian paradox ”


At the heart of the debate over the sustainability of the Amazon rainforest is a paradox, says Ricardo Salles, Brazilian Minister of the Environment. On the one hand, the region is one of the richest in the world in terms of biodiversity and natural resources. But, on the other hand, it is one of the poorest in terms of human development and quality of life for the more than 20 million people who live there.

Solving this “Amazon paradox” is the key to ending the illegal deforestation that is currently ravaging the rainforest and sullying Brazil’s international image, according to the controversial confidant of far-right President Jair Bolsonaro.

“The main problem or the root cause of illegalities in the region is certainly the Amazonian paradox,” said Salles. “[We need] to mitigate and reduce the risk that these people will return to illegal activities due to the fact that they have no income or opportunities, alternatives to survive.

For Salles Рa former lawyer who was secretary of the environment for the state of Ṣo Paulo before running unsuccessfully in congressional elections in 2018 Рthe key is to create economic opportunities, including new jobs and development. of the so-called bio-economy, which could exploit the natural resources of the forest.

An Ibama agent patrols an illegal mine in Pará state. Salles argues that environmentally destructive activities are motivated by a lack of legitimate means to earn a living © Ricardo Moraes / Reuters

“When you go to specific areas where the rate of deforestation is the highest, the people who live there are directly linked to illegal logging or mining, etc.,” he explains.

“Once you remove this source [of income], it is vital for us to replace it with some kind of payment for an economical service. You pay to become a ranger as opposed to an illegal miner. You can ask them to participate in tree replanting efforts. You can also ask them to participate in the development of forest products. ”

It’s an idea that resonates with environmentalists and scientists, who have long recognized that poverty is a key driver of deforestation and environmental destruction.

Still, many are worried about the true intentions of Salles, which has long supported the opening of Amazonian protected lands to commercial activity. Last month, the minister became mired in new controversy when an Amazon police chief accused him of collusion with illegal loggers. A day later, the officer was replaced.

Salles also lost credibility last year, when a video came out of him suggesting the government should take advantage of public concern over the coronavirus pandemic to push through environmental deregulation.

Adriana Ramos of the Socio-Environmental Institute, a campaign group, says whether the bio-economy could help maintain the forest depends on how it is developed.

“I agree that the bioeconomy is an important element, but for it to be a vector of conservation and the fight against deforestation, it cannot be considered as a simple question of economy,” she says.

Salles says his plans require private sector companies to start investing in the region and creating factories and jobs. But the minister is also seeking financial support from Western countries.

‘This is something Brazil can do’: Salles is optimistic about the outlook for green bonds © Adriano Machado / Reuters

Last month, he asked for $ 1 billion in financial assistance from the United States and European countries to fight deforestation. One-third of that amount would go to improving environmental law enforcement in the rainforest, while the remaining two-thirds, about $ 660 million, would go to creating economic opportunities, he said.

Both prongs need to be tackled at the same time, he says, because if you are just doing law enforcement, “you lose efficiency because you don’t have the economic incentive” for law enforcement. residents stop logging.

So far, countries contacted by Salles have refused to distribute money to Brazil before it shows results in the fight against deforestation.

Since the start of the Bolsonaro administration in 2019, deforestation in the Amazon has reached its highest level in more than a decade, sparking international concern over the impact on climate change. Last year, more than 11,000 km2 of Brazilian rainforest were cleared.

The destruction prompted more than two dozen financial institutions, mostly European, to call on Brazil to reduce deforestation, with some threatening to withdraw from the country if the situation does not improve.

In response, Salles created an “Adopt a Park” program to allow private sector companies to pay to preserve parts of the Amazon and other nature reserves.

While some Brazilian companies have purchased plots, adoption by European groups has been slow, with some arguing that such a program amounts to philanthropy and is inconsistent with their fiduciary obligations.

“We would like to have the participation of foreign companies,” said Salles. “It is a very good opportunity to have a critical and concrete participation in the preservation of the Amazon.” He points out that these investment groups “have their own compensation and their own funds to do this. The cost of adopting a park is not significant, it is very reasonable. ”

There is, however, one area in which Salles and its European counterparts agree: green bonds – whose sales are used to finance initiatives with social or environmental benefits.

Fires are brewing in the state of Mato Grosso.  As part of Salles' `` Adopt a Park '' plan, international investors can directly finance the preservation of the Brazilian rainforest
Fires are brewing in the state of Mato Grosso. As part of Salles’ Adopt a Park plan, international investors can directly fund the preservation of Brazil’s rainforest © CBMS / Latin America News Agency

Thede Rüst, head of emerging market debt at Nordea Asset Management – who stopped buying Brazilian government bonds in 2019 due to fires in the Amazon – said: “My main wish would be for Brazil to issue a green bond with a long maturity profile, capturing more than the next election cycle, so that we can invest again in Brazilian sovereign debt.

Rüst predicts strong demand for such a bond – and says that, therefore, the interest coupon Brazil would have to pay investors is likely lower than that of a conventional bond. “It’s a better way for the Brazilian government to get capital for preservation purposes than asking for money up front,” he suggests. “All Minister Salles has to do is call us to get the framework in place.”

For his part, Salles says this is an area that Brazil is actively pursuing and is well positioned to take advantage of: “This is something Brazil can do.”

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