Toward a Financial Architecture to Protect Tropical Forests
The Case of Brazil (Executive Summary)
By Rupert Edwards View PublicationThis report focuses on Brazil both as a critical forest country and in order to describe an architecture of finance based on a particular framework of law and existing institutional efforts to protect forests. Despite a challenging macroeconomic environment, Brazil has the most developed legislative framework for tropical forest protection in the Forest Code, powerful institutional capacity including in its large public agriculture finance institutions and high levels of foreign investment and trade in commodities associated with deforestation. We will address two integrated dimensions of a comprehensive strategy to stabilize the forest frontier. There is currently a major focus on commercial approaches to improving productivity on the agricultural side of the frontier. While this focus is important, there needs to be a parallel investment into the protection of forests, ensuring that the public goods forests provide (climate, water, biodiversity) have real value. Building a successful market and policy strategy to effectively stabilize the forest frontier will necessarily require the building and connecting of three fundamental pieces of the architecture.