Author: Kelley Hamrick Ecosystem Marketplace

5 May 2014 | Located in the heart of the Amazon, Acre, Brazil contains just over 15 million hectares of land, most of which the state has managed to keep intact. However, its conservation efforts remain challenged by high economic reliance on agricultural, ranching and forestry/forest products and a comparatively small economy compared to other Brazilian states (the third smallest of 27 states). Acre is now on a mission to solve the problem through a comprehensive payments for environmental services program, starting with carbon finance.

The First Step is the Hardest

The state hasn’t always embraced a sustainable development model. The movement took off under Chico Mendes, a Brazilian rubber tapper and environmental activist. In the 1980s, marginalized rubber tapper communities were losing land to timber companies and cattle ranchers. Mendes proposed the creation of extractive reserves to allow forest peoples to live sustainably. His assassination in 1988 sparked worldwide attention to the plight of the Amazon’s forest communities.

At the time of his death, Chico Mendes’ group was politically marginal. Extensive international and national coverage – including an article in the New York Times – propelled his fellow environmentalists out of obscurity and into the political arena.

Since then the group has gained recognition, as Mendes’ colleagues have gained substantial political positions. The most prominent is Marina Silva, who later become Brazil’s Minister of the Environment under the former President Lula da Silva and is currently a running-mate to a candidate in the upcoming presidential elections. Another member is Jorge Viana, who served as Acre’s governor from 1998 to 2007.

As the Environmental Defense Fund’s (EDF) Director of Tropical Forest Policy Steve Schwartzman vividly recalls, that marked a drastic turning point in the government. Prior to Viana, “The crowning symbol of the way the government worked in Acre was a canal in the city – the maternity canal. It was basically an open sewer that ran through this scrub forest where people were dumping trash [despite official cleanup projects]… It was the symbol of government corruption.” His trip back to Acre after Viana’s election was like returning to a different city; most importantly, the canal had been cleaned up and turned into a park.

Since then, the Workers’ Party has remained in power – and has worked extensively to build an economy based on sustainable forest use in Acre. One of the first pieces of environmental legislation passed – the Chico Mendes Law in 1999 – marked the beginning of the government’s dual emphasis on ecology and economy. It provides subsidies for traditional forest residents (such as rubber tappers and nut collectors) to receive payments for the biodiversity conservation and other ecosystem services provided by their work, while also seeking to add value to forest products through the creation of new markets. Since then, the government has helped build factories for sustainable natural rubber condoms, furniture, wood floors, and nut processing.

The Chico Mendes law illustrates the repeating focus since then: subsequent laws have similarly given equal weight to economic growth and the preservation of nature, like the aptly-namedEconomic and Ecological Zoning Plan (ZEE-AC). The ZEE, passed in 2007, laid the groundwork for Acre’s most wide-ranging program, the State System of Incentives for Environmental Services (SISA), by dividing all land into zones.

Growing Green with REDD

SISA passed in 2010 and was hailed by market experts as comprehensive and cutting-edge. Beto Borges of Forest Trends’ Communities and Markets Initiative concluded that Acre is, “The most advanced of all Amazonian states in Brazil to develop and implement PES policy… a state with a proven track record of forest conservation and involvement of traditional communities.”

After extensive consultations with stakeholders, the law also included the creation of the Institute of Climate Change and Environmental Services Regulation, the State Commission for Validation and Monitoring, a Company for the Development of Environmental Services (CDSA), a Scientific Committee and an Ombudsman’s Office (see SISA Institutions, right).

With this basic framework, SISA aims to develop programs valuing forests, biodiversity, water, soil, climate and traditional/cultural knowledge.

SISA’s Environmental Service Incentives for Carbon (ISA Carbon) is the furthest along of these programs; it has also gained high accolades from the Governor’s Climate Task ForceWWF and others as one of the most advanced subnational forest carbon programs in the world.

While this initiative encompasses Reducing Emissions from Deforestation and forest Degradation (REDD) projects, it also emphasizes maintaining current forest cover. For this reason, Acre maintains jurisdictional goals, so that the benefits from carbon can be rewarded to all participants maintaining or improving the forests.

To achieve this, Acre has partnered with the Verified Carbon Standard (VCS) to develop a jurisdictional approach. VCS’s Jurisdictional Nesting REDD+ (JNR) framework, released in 2012, offers the only comprehensive framework for jurisdictional accounting and verification at this point. Acre became the first jurisdiction to pilot the JNR framework. As the state remains at the forefront of developing this framework, it is widely expected to become the first jurisdiction-wide program to deliver REDD offsets.

These actions have been successful in establishing Acre as a leader in REDD – both in Brazil and worldwide. Since inception, the state has been preferred for projects by forest carbon developers who have high praise not only for the legislative rules but also for the state’s willingness to work with them and for information transparency. “They are the best in the world when it comes to subnational jurisdictions working on REDD,” comments the Carbon Fund’s Brian McFarland. In fact, REDD has been so successful in Acre that, according to a 2013 USAID report, it makes up about 65% of Brazil’s total supply of credits.