Proposals on financing for the Summit of Presidents of the Amazon
In recent years, the Amazon has received great attention from different financing initiatives that involve governments, banks and companies. Amazonian indigenous peoples have been excluded from financing. Less than 1% of climate finance reaches indigenous peoples [1] . While All these initiatives have as a discourse to contribute to the preservation of the Amazon through sustainable development; however, the region has reached a point of no return. not all of them have been contributing in an effective and practical way to saving the Amazon and its peoples.
Some of these initiatives are: the IDB Amazon Initiative (IDB-IAMZ), the GCF Amazon Bioeconomy Fund (Green Climate Fund/Fondo Verde del Clima), created in 2021 and executed by the IDB in Colombia, Ecuador, Guyana, Peru, Suriname and Brazil and that seeks to reduce the impacts of climate change in the Amazon biome. This program, which is part of the IDB-IAMZ, which seeks to raise $1,000 million with other donors (Germany, the Netherlands, Switzerland, etc.), has USD 279 million from the GCF and seeks to reach $600 million to promote private investment with the aim of reduce 6.2 million tCO2e per year over the 20 years of life foreseen for said private investments.
The Amazon Fund, which has been implemented in Brazil and managed by BNDES since 2008, has reached contributions of more than USD 800 million, mainly from Norway and Germany, and recent announcements from the United States (USD 500 million) and Great Britain (USD 100 millions). The Joint Declaration of Reduction of Emissions, for USD 300 million in Peru, with Norway, Germany, the United States, England.
There are 629 million hectares that are Priority Areas in the Amazon [2] : 33% are primary ecosystems and 41% are systems with low degradation. The preservation of the region is a global responsibility. Recognizing the indigenous territories that survive in the region and designating protected or mixed areas requires billions. The mandate of the Global Biodiversity Framework is a historical milestone that is integrated for the first time in the texts of the Biodiversity Convention [3], to indigenous and traditional territories as a different category to preserve these key regions for life on the planet. The recognition of territories and the creation and maintenance of protected areas and the restoration of several key areas cannot fall solely on the budgets of the countries and economies of the Global South. All these actions are urgent to stop the regressive death or point of no return of the Amazon and achieve at least 80% protection by 2025. Ecosystems such as the Tibetan Plateau and the Western Antarctic depend on the Amazon [4 ] .
These figures pale when we compare them with the financing received by large companies that cause deforestation on the planet. According to Forests & Finance, banks around the world have provided $267 billion worth of loans with companies at risk of destroying tropical forests in Brazil, Southeast Asia and Africa since the Paris Climate Agreement [5 ] . In other words, the financing for companies that deforest the Amazon is dozens of times greater than the funds that are intended to be used to stop deforestation.
- In this context, the main appeal of the Summit of Presidents of the Amazon should be to the governments and banks of the European Union, the United Kingdom, the United States, China and their own countries to stop financing agricultural companies, mining, oil, energy, transportation and mega-infrastructure builders that are destroying the Amazon. Financing for the Amazon must begin by reducing financing or disinvesting in activities and companies that cause the devastation of the Amazon. No financing for the devastation of the Amazon should be tolerated. Banks must have robust control systems that guarantee that they will not finance illegal activities.
- In Ecuador alone, European banks have provided $10 billion in financing for the trade of more than 155 million barrels of oil from the Ecuadorian region between 2009 and 2019. Strategies from indigenous peoples and civil society stopped these flows and they called on international banks to apply a geographical exclusion for the Amazon in its entirety. Two banks have advanced in this exclusion (ING and BNP Paribas). This exclusion has already been implemented in other regions such as the Arctic. We demand a geographic exclusion that stops investments for extractivism in the Amazon.
- In relation to financing to save the Amazon, it is essential to guarantee mechanisms so that these billions of dollars are not lost in the administrative bureaucracy, in consultancies, in planning that remains only on paper. The funding roadmap must essentially start from the bottom up. From indigenous territories and communities, Afro-descendants, original peasants and local actors who know the reality and are key to any initiative that seeks to effectively stop the destruction of the Amazon. The financing mechanisms must start from the territorial management plans of the indigenous peoples and original peasants and not from the desks.
- Indigenous and Amazonian peoples’ participation should not be decorative, nor limited to the presence of an indigenous representative on the boards of financing funds. Mechanisms for social participation in financing funds must be at all levels and encourage the involvement of the broadest sectors, in each country and each public investment program.
- Experiences of misuse, waste and corruption around the financing of socio-environmental projects make it necessary to create mechanisms of transparency, control and social surveillance for financing for the Amazon.
- Funding cannot be channeled primarily through the private sector, which always puts profit maximization before preserving the environment. Initiatives such as the Fund for the Amazon of the Green Climate Fund administered by the IDB and the IDB’s Amazon Initiative as a whole should be redirected, above all, to financing in an expeditious and non-bureaucratic manner the initiatives of indigenous peoples, local organizations and the municipalities.
- The concept of bioeconomy is a broad term that encompasses a diversity of competing approaches ranging from greenwashing of corporations, the commodification of nature, even practices of harmony with nature of indigenous peoples, and economic ventures under certain limits that seek to preserve the vital cycles of nature. Nicholas Georgescu-Roegen (1906-1994), a pioneer in the formulation of bioeconomy, pointed out that the economy was a subsystem of ecology and that it did not have an existence outside of nature. Consequently, the economy had to be subordinated to the geophysical limits of the Earth and could never pretend to grow without limits on a finite planet. Distorting this approach, a concept of bioeconomy has been developed that falls within the framework of green capitalism, and that proposes applying the rules of capital to nature, valuing it in monetary terms to make it attractive to investors and markets. This concept of bioeconomy has been used by the IDB to promote a fund for private investors in order to save the Amazon.
- It is essential that States initiate a public debate on the various bioeconomies in progress, and not maintain the biases and privileges of the bioeconomy of commodities. The Amazonian peoples develop their own economies, of Good Living / Full Life, which dispute the meaning of public policies on the bioeconomy of commodities, towards the prioritization of indigenous, Afro-descendant and traditional community holistic bioeconomies.
CLIMATE DEBT
The proposal to exchange climate action in the Amazon for payment of external debt is an approach that is based on the experience of the nineties and beginning of the century of the relief initiative for Heavily Indebted Poor Countries (HIPC) and the Multilateral Debt Relief Initiative (IADM) that were applied in countries like Bolivia. These initiatives halved Bolivia’s external debt for the year 2006 on the condition that the resources for the payment of the external debt service will be allocated to social programs for the reduction of poverty.
Different studies agree that the change from debt to social action was important for Bolivia’s public finances, but not relevant for poverty reduction because a large part of said resources were not allocated for said purpose and/or ended up being consumed in the framework of the state bureaucracy.
- Reversing the point of no return requires systemic measures. Debt is the other side of the extractivism coin. Amazonian countries grant concessions of mineral, oil, agricultural and other resources to acquire or pay debt. A mechanism is required to break these perverse financial cycles. A conditional cancellation of the debt that serves as an umbrella for the region and that takes into account the innumerable systemic functions that the Amazon provides to the planet should be the basis for a regional debt negotiation.
- With this experience, any debt swap for climate action for the Amazon should be the product of a participatory process that directs financing to relevant activities to preserve the Amazon and its peoples, and that has control and transparency mechanisms that guarantee compliance with the goals that are pursued, mainly from the territorial surveillance of the Amazonian peoples.
- The debt-for-weather swap should not serve to legitimize illegitimate external debts contracted due to external impositions and unconsulted decisions linked, in many cases, to serious acts of corruption.
- Debt-for-climate swaps should not include speculative mechanisms and the commodification of nature, such as payment with carbon credits from the Amazon, as the IMF considers [6] .
CARBON MARKETS
Carbon markets are commercial spaces in which countries and companies can sell and buy greenhouse gas emission reduction certificates. In the carbon markets, on one side are the buyers who have certain goals or obligations to reduce their emissions, and on the other side are the sellers of carbon certificates that carry out actions to reduce emissions. Through the carbon markets, the buyers of these bonds supposedly offset the emissions that they had to reduce in their company or country. They are based on the serious error that fossil carbon is the same or “compensable” for biotic carbon. In other words, this compensation mechanism (‘offsets’ in English) allows polluting companies and countries to buy permits to continue polluting.
Emission reduction certificates are imaginary goods that are created from what is expected to happen elsewhere and are therefore speculative in nature. For example, in the Clean Development Mechanism, which is one of the carbon markets created under the Kyoto protocol, carbon certificates were mainly granted to industries that should never have been built to eliminate hydrofluorocarbons and nitrous oxide, as in the case of mega -hydroelectric plants in the Amazon approved to receive carbon credits, such as UHE Jirau on the Madeira River, a joint venture of the French multinational Engie (ex-GDF Suez) with Eletrobras. These initiatives, among other negative aspects, ignore the significant methane emissions from these projects, the impacts on biodiversity in freshwater ecosystems,
The Clean Development Mechanism included the granting of emission reduction certificates for afforestation and reforestation projects, and later the mechanism for Reducing Emissions from Deforestation and Forest Degradation, better known as REDD and REDD+, was approved. . This mechanism proposes the granting and trading of carbon credits for the reduction of future emissions avoided due to deforestation. While afforestation and reforestation imply the planting of new trees to store carbon, with all the complications that this implies due to the development, often of invasive monocultures, the REDD mechanism proposes granting carbon credits for the deforestation that it intends to avoid by favoring those who They deforest more because they start from a higher deforestation baseline.
Most of the governments of the Amazon, with the exception of Bolivia, have signed up to the REDD mechanism. This mechanism reduces the forests and the jungle -which are essential for the water cycle, biodiversity, the protection of ecosystems, food sovereignty and the provision of natural medicines for the peoples who inhabit it- to only one of their functions which is carbon capture and storage. This «environmental service» of the forests of being a carbon sink is valued in monetary terms, its price fluctuating according to supply and demand.
Like the other emission reduction certificates, the carbon bonds of REDD projects contribute to: a) failure to comply with the effective emission reduction commitments of developed countries and polluting companies, b) intermediaries and financial institutions appropriate much of the value of carbon credits reaching very little to the countries, indigenous populations and forests, c) a speculative financial bubble is generated from the purchase and resale of said certificates,that feeds the «carbon piracy» (Carbon Cowboys) that expands with scams and conflicts in all Amazonian countries d) new rights are established on the carbon capture capacity of forests that generate conflicts within indigenous populations and with the State and the institutions that manage REDD projects.
- Financing to save the forests and the Amazon must be comprehensive, direct, transparent, take into account local realities and the participation of the people, and not generate carbon credits or emission reduction certificates that only serve to prevent others from complying with their obligations. emission reduction commitments as established by the REDD+ mechanism. The Amazon is not a commodity for the development of carbon markets. Far from a commercial approach to save the Amazon, it is necessary to create financing mechanisms that effectively influence the structural causes that are behind the devastation of the Amazon and that guarantee the rights of the peoples who inhabit it and of nature.
- Establish carbon tax mechanisms to allocate said resources to the Amazon.
- Faced with the position assumed by the majority of the governments of the Amazon, indigenous peoples have developed their structural criticisms of conventional REDD+, and raised a proposal for «Amazonian Indigenous REDD+» to try to reformulate and condition REDD+, by not selling carbon credits, the priority of life and territorial security plans to which REDD+ must be adapted, and the control and sanction of carbon piracy. Said proposal of the «REDD+ Indigenous Amazonian» has been included in Peru (with 4 legal norms), Colombia, Ecuador and must be considered by the Amazonian States.
[1] Rainforest Foundation Norway-RFN-2021
[2] Quintanilla, Marlene, Alicia Guzman Leon, Carmen Josse. 2022. The Amazon against the clock: a Regional Assessment on Where and How to protect 80% by 2025. https://amazonia80x2025.earth/
[3] https://amazonia80x2025.earth/wp-content/uploads/2023/04/roadmap-4.pdf
[4] Liu, T., Chen, D., Yang, L. et al. Teleconnections among tipping elements in the Earth system. Nat. Climate Chang. 13, 67–74 (2023). https://doi.org/10.1038/s41558-022-01558-4
[5] https://forestsandfinance.org/news/report-global-bank-policies-dangerously-inadequate/
[6] https://www.imf.org/es/Blogs/Articles/2022/12/14/swapping-debt-for-climate-or-nature-pledges-can-help-fund-resilience
Asamblea Mundial por la Amazonía 