“Our Economy Depends on Maintaining the Forests” – Podcast with Brazil’s Amazon Champion

Summary

Podcast Summary

Podcast: The CGD Podcast
Episode: “Our Economy Depends on Maintaining the Forests” – Podcast with Brazil’s Amazon Champion
Date: October 19, 2015
Guest: Juliana Santiago, Head of the Amazon Fund Department, Brazil’s National Development Bank (BNDES)
Host: Rajesh Merchandani

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Overview

In this episode, Rajesh Merchandani interviews Juliana Santiago from Brazil’s BNDES to uncover how Brazil managed to achieve a dramatic 80% reduction in Amazon deforestation within a decade—making it the world’s largest reducer of greenhouse gas emissions. The conversation delves into Brazil’s strategies, the economics of forest preservation, and the role of international performance-based funding, particularly Norway's billion-dollar pledge to the Amazon Fund. The podcast also explores why forest preservation is central to development, not just climate, and discusses the politics and future of payment-for-performance models in global conservation.

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Key Discussion Points & Insights

1. The Scale of Brazil’s Deforestation Crisis (01:11–02:00)

• Background: Deforestation in Brazil peaked in 2004, with the highest rates ever recorded.
• Key Measures: The government responded by integrating efforts across ministries and implementing a national strategy to tackle the problem.
  • “The National Institute of Space Research in Brazil has been monitoring the deforestation rates since the 80s. And in 2004 we have reached the highest deforestation rate ever.” – Juliana Santiago [01:26]

2. Main Drivers of Deforestation and Policy Responses (02:00–02:54)

• Drivers Identified: Land and territory use, illegal deforestation actions, and lack of viable economic alternatives.
• Policy Pillars:
  1. Land title regularization
  2. Illegal action control/enforcement
  3. Incentivizing sustainable production alternatives
• Quotable Insight:
  • “Giving alternatives to the people that live in the forest and from the forest, other than doing illegal actions, is also an important factor of combating deforestation.” – Juliana Santiago [02:02]
  • “Making them see that the trees are worth more alive than dead.” – Rajesh Merchandani [02:40]

3. Forests: Beyond a Climate Problem, A Development Issue (02:54–03:42)

• Link to Development: Forest preservation underpins Brazil’s economy by protecting watersheds, regulating rainfall, and supporting agricultural productivity.
• Perspective Shift: Rural landowners increasingly understand that deforestation threatens their businesses.
  • “Our economy was also dependent on the maintenance of the forest... even the rural owners understand that deforestation might be a threat to the business.” – Juliana Santiago [02:59]

4. The Role of Norway and Payment for Performance (03:42–06:25)

• How the Payment Model Works: The Amazon Fund rewards verified reductions in CO2 by converting them into a financial value ($5 per ton avoided).
• Scale of Achievement: Brazil’s efforts so far are valued at $16.2 billion in avoided emissions; Norway pledged $1 billion.
• Purpose of International Funding: Amplifies Brazil’s national efforts, underlines shared global responsibility, incentivizes continued results.
  • “Brazil was proposing... that based on its efforts and results achieved in reducing deforestation, the world would contribute... and also be engaged...” – Juliana Santiago [04:18]
  • “Norway has contributed $1 billion... the results already achieved with this cooperation...” – Juliana Santiago [06:25]

5. Ownership, Mindset, and Scaling Payment for Results (06:25–11:39)

• Country Ownership: Brazil controls use of funds but invests them in further anti-deforestation actions.
• Stop ‘Aidifying’ Payments: The model should treat funding as payment for services delivered (forest protection and climate stability), not as traditional aid.
  • “It's not aid... What I'm doing is that I'm recognizing efforts and end results achieved and I'm paying for that. So that's the mindset change.” – Juliana Santiago [09:44]
• Challenges in Scaling: While the REDD+ framework exists internationally, global financial commitment is lagging.
  • “The agreement is there... What we need now is financial engagement. Basically, where's the money?” – Juliana Santiago [11:39]

6. The Outlook for the Amazon and Global Climate Cooperation (11:59–12:42)

• Optimism and Collaboration: Juliana expresses hope, emphasizing that with international commitment and a shared sense of responsibility, further progress is possible.
  • “The results achieved are remarkable. And I think to the world it's possible if we have commitment and if we have incorporated the understanding that climate change is a global problem...” – Juliana Santiago [12:06]

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Notable Quotes & Memorable Moments

• “Brazil cut the deforestation rate by 80% in one decade. It's now the largest reducer of greenhouse gas emissions.”
  – Rajesh Merchandani [00:24]
• “Making them see that the trees are worth more alive than dead.”
  – Rajesh Merchandani [02:40]
• “Our economy was also dependent on the maintenance of the forest.”
  – Juliana Santiago [02:59]
• “The amount of deforestation that Brazil has reduced at $5 a ton of carbon dioxide is worth $16.2 billion to the world.”
  – Rajesh Merchandani [06:11]
• “It's not aid... I'm recognizing efforts and end results achieved and I'm paying for that.”
  – Juliana Santiago [09:44]
• “What we need now is financial engagement. Basically, where's the money?”
  – Juliana Santiago [11:39]
• “The results achieved are remarkable... we can do a lot together to change and to keep the climate balance.”
  – Juliana Santiago [12:06]

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Timestamps for Important Segments

• [00:24] Brazil’s achievement in deforestation, context for the episode
• [01:26] Peak deforestation year and emerging strategy
• [02:02] Drivers of deforestation and three-pronged policy response
• [02:59] Forests as a development issue
• [04:18] The Amazon Fund and payment for performance explained
• [06:11] Brazil’s impact in global emissions terms
• [09:44] Rethinking aid: Payments for environmental services
• [11:39] Need for financial engagement beyond promises
• [12:06] Closing notes on optimism and global teamwork

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Conclusion

This episode offers a deep dive into Brazil’s remarkable progress against Amazon deforestation, revealing the blend of firm domestic policies and innovative international financing that made it possible. Juliana Santiago’s candid, optimistic insights illuminate the importance of seeing forest conservation as a paid, shared global service—not mere charity—and the need for greater international financial commitment to scale results. The discussion is framed by a clear-eyed recognition of global interdependence and the necessity of treating climate challenges as a collective responsibility.

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For more resources and the CGD’s latest report “Look to the Forests,” visit cgdev.org.

Transcript

[A]

Foreign.

[B]

Hello, I'm Rajesh Merchandani. And thanks for joining me for this edition of the CGD podcast today. How did Brazil do it? What am I talking about? Well, how did Brazil manage to reverse damaging trends and undo powerful vested interests to cut its deforestation rate in the Amazon? I don't just mean by a small amount. Brazil cut the deforestation rate by 80% in one decade. It's now the largest reducer of greenhouse gas emissions. Not only that, it also managed at the same time to increase development outcomes and also increase agricultural production. To learn more about this, I'm joined by Juliana Santiago, who heads the Amazon Fund Department of Brazil's National Development bank, bndes. Now, the Amazon Fund, in case you don't know, provides financial support to combat deforestation. And BNDES is responsible for raising and investing funds and for monitoring and reporting on projects that the fund supports. Juliana, great to have you on the podcast. Thank you very much for joining me.

[A]

Thank you. Thank you for having me here.

[B]

Before we get to the point of how you did it, let's understand the scale of the problem that Brazil was was facing. How big a problem has deforestation traditionally been in Brazil?

[A]

The National Institute of Space Research in Brazil has been monitoring the deforestation rates since the 80s. And in 2004 we have reached the highest deforestation rate ever. So by that time, the government has joined efforts in all ministries. Health had engaged in not only identify the problem and the main deforestation drivers, but to put in place a national strategy policy that would focus on combating deforestation.

[B]

What were those main deforestation drivers?

[A]

There are so many drivers of it, but basically the policy respond to that. Because the policy has three main land and territory use, illegal actions of deforestation has to be controlled. And the third action is the stimulation of production activities in the Amazon. So giving alternatives to the people that live in the forest and from the forest, other than doing illegal actions, is also an important factor of combating deforestation.

[B]

So land title, illegal actions, and then also giving people an alternative use for the land, making them see that the trees are worth more alive than dead.

[A]

Exactly.

[B]

Why is this a development problem as opposed to just a climate problem?

[A]

We identified that our economy was also dependent on the maintenance of the forest. So the forest is important to keep the watersheds, to keep the humidity and the rain flows not only to Brazil, but also to the world. So this understanding and having even the rural owners understanding that deforestation might be a threat to the business was part of this engagement in protecting the forest and thinking about sustainable development to the country.

[B]

Brazil introduced a lot of policies domestically to protect the Amazon. But you also had international support from Norway. There was a deal of $1 billion which Norway provided for payment for performance in reducing deforestation. And at cgd, we talk a lot about payment for performance. We call it cash on delivery aid. But how much of a difference did that Norwegian money make? Because Brazil was already doing deforestation reduction. How much of a difference did the Norwegian money make?

[A]

Yes. In 2006, Brazil governments brought to the Conference of Parties the concept of the Amazon Fund. So the concept was really based on the performance payment, which means that Brazil was proposing to the world that based on its efforts and results achieved in reducing deforestation, the world would contribute or would be able to also contribute and also be engaged in the deforestation efforts, in addition to what Brazil have been doing. So the concept of the Amazon Fund is payment for performance, which means the deforestation rate reduction is converted to CO2 equivalent, carbon dioxide equivalent. And this carbon dioxide equivalent is valued by $5, which is a conservative valuation of the carbon dioxide avoided to the nature. And then it, it is transformed to how much would be the fundraising limit based on Brazil contribution with its own effort that would lead to performance payment from other partners in other countries. So up to now, just to give you that information, we would be willing to receive up to $16 billion of donations based on the deforestation reduction in efforts we have already shown in the past year. So today, as you said in the beginning, we reduced deforestation by 82%. So that reduction converted and transformed in a value amount is equivalent to $16.2 billion.

[B]

So the amount of deforestation that Brazil has reduced at $5 a ton of carbon dioxide is worth $16.2 billion to the world.

[A]

Exactly.

[B]

Norway has contributed $1 billion. What I'm trying to understand is how important was it because Brazil was already doing this, why was it important to have Norway involved? What did that international support mean for Brazil's efforts?

[A]

Yes, yes, I think this is a very good question, because is it a Brazil problem or climate change or. It's a world problem. Brazil understands it is its problem. So that's why we have the biggest rainforest in the world. So we understood the importance of conservating the forest, not only to us, but also to climate change, to world climate change. But climate change, it's beyond a Brazil problem. It's a world problem. So the message and engagement rich countries is very important. So I think this is one thing. The other thing is the results already achieved with this cooperation. So the logic of the Amazon Fund and also under the negotiations of redd plus one of the premises of is country ownership. So based the country shows results and it can use the resources based on its strategy of reducing carbon emissions. And Brazil has decided to reinvest the donations received in further reducing deforestation in projects that would be linked to prevent or combating deforestation. So the logic concept of the Amazon Fund is to to reapply the resources in other projects that are additional to the efforts that we've been doing with all the policies that are being implemented and enforcement of the laws to keep the deforestation rates low.

[B]

You talked about the importance of bringing rich and developing countries together to understand this as a global problem with global solutions. You talked about the importance of country ownership. Brazil had country ownership of its deforestation reduction plans even though there was international support. Now CGD's just released this report, look to the Forests How Performance payments can slow climate Change. It's on our website now. It's exactly about this payment for performance for verified reductions in deforestation. One of its main recommendations is that donor countries should get away from the idea of these payments as aid. Stop aidifying the payments. That's how Nancy Bertzel, our president, would put it. Stop aidifying the payments, the report says. Instead, think of it as a payment for a delivered service. Just as you would pay for your electricity as a utility, think of the forest as providing a utility. In terms of development services, climate services. How feasible, given your experience, how practical politically is it to expect donor countries to stop thinking of this as aid? To give up on having conditions or wanting plans in place and not tell you how to use the money?

[A]

Yes, I think firstly is to change the mindset that it's a problem of the forest country and thinking about climate change as a world issue. So I think this is the first step and I think this is a maturity process. For example, after Norway has pledged a donation to the Amazon Fund, it brought in a sequence, a pledge and a donation from the Germany government through the kfw. Actually recently, after the first donation that we have already Internalized of about $27 million recently Angela Merkel, the Chancellor, was there in Brazil in an official visit and she announced an additional pledge of 100 million euros. It's the changing of mindset that it is not aid. I'm not only helping a developing country in the help sense. What I'm doing is that I'm recognizing efforts and end results achieved and I'm paying for that. So that's the mindset change.

[B]

But do enough countries understand that? I understand it, you understand it, Norway, Germans understand it. Do enough countries?

[A]

Countries are represented in the United nations and the UN FCC has established in war. So the RAD plus framework was. Was almost finished. Finished in Bonn with the last adjustments and the concept of RAD plus and payment for performance was agreed between the countries.

[B]

Yeah, but it hasn't really been scaled up.

[A]

It hasn't been scaled up. Yes, that's why the report talks.

[B]

So that suggests that countries do not agree with that idea of payment as a service.

[A]

I understand, I understand. The agreement is there, the commitment, the rules and the framework of REDD is established. What we need now is financial engagement. Basically, where's the money? So the question is, where's the money we need now, the financial engagement? Because the framework we've already agreed.

[B]

Are you optimistic about the future of the Amazon, about the future of the planet?

[A]

Well, I'm always optimistic and I tend to be optimist and I think we've done a lot, not only as a country, but also in the Amazon Fund. The results achieved are remarkable. And I think to the world it's possible if we have commitment and if we have incorporated the understanding that climate change is a global problem and that we can do a lot together to change and to keep the climate balance.

[B]

Giuliana Santiago, been really interesting to talk with you. Thank you for bringing your optimism to the CGD podcast.

[A]

Thank you. It was very nice to be here and hope to be here more times.

[B]

We hope so too. You can find out much more about our work on our website, cgdev.org the report that's just come out, Nook to the Forests, is also on the website. Take a look at that in the. If you'd like to. And as ever, join me, Rajesh Merchandani for the next podcast from the Centre for Global Development.