Sérgio Abranches

The early-warning satellite system for monitoring deforestation in the Brazilian Amazon, DETER, developed by the National Institute for Space Research, INPE, has detected an atypical increase in cleared forest area on March-April this year. It was the largest area cleared in this period since 2008. Compared to 2010 deforestation was 473% greater. Today, INPE has announced that deforestation in May was 146% greater than in May, 2010.

There is a clear trend towards increased land clearing. The chart shows DETER‘s figures for both periods.

Deforestation has been greater in 2011 than in 2009 and 2010. The figure for March-April 2011 is anomalously high because these months close the rainy season. The explanation for this sudden increase in land-clearing even before the dry season begins is the anticipation of the congressional approval of a new Forestry Code.

The bill reduces the mandatory forest reserve in the Amazon from 80% to 50% of the property area, as well as the extension of riparian vegetation to be preserved or restored on both margins of rivers, from 30 to 15 meters. These changes were already approved by the House. If the bill becomes a law, landholders will have to register their properties indicating the areas of mandatory protection. The bill also eliminates fines and administrative and legal proceedings against illegal deforestation until 2008. The likelihood of its approval has triggered “preemptive clearing”, a policy of “fait accomplit”, before the bill is converted into law.

The dry season in the Amazon begins in May. The  risk of intentional wildfires and land clearing is at its highest from May through to September. Fire usually comes after the electric saw and the tractor-pulled chain, two common methods of land-clearing. The most devastating one is the use of large freighter anchor chains connected to two high-power tractors that would pull every tree, and kill every animal on their way. This method easily clears near 100 hectares in a day’s work. (See a video here.) Fire has also been used to clear drier tracts of native forest. Cleaning up the rest becomes an easy task for a tractor shovel.

The chart with aggregate deforestation areas from March to May gives a clearer picture of the present trend towards higher clearing rates.

INPE has indicated that 81% of the deforested area in March-April was in the state of Mato Grosso, Brazil’s larger soybean and beef producer. In May, 35% of the cleared area was in Mato Grosso; 25% in Rondonia, where the government is building two large and controversial hydropower dams; 24% in Pará, a large beef and timber producer; 11% in the state of Amazonas; and the remaining in the states of Maranhão, Tocantins and Acre.

The state of Mato Grosso has active lobbies and political networks related to the two major traditional drivers of Amazon and Savannah (Cerrado) deforestation: soybean cultivation and cattle ranching. The pressure from soybean cultures over  the forest has been smaller for the last 5 years due to the “Soy Deforestation Moratorium” signed in 2006 by Brazilian soy industry representatives, trading companies and large producers, after major U.S. and European consumers refused to continue buying soy from illegally cleared land. This movement was triggered by a well orchestrated campaign from Greenpeace’s Brazilian branch.

A story by Bettina Barros (in Portuguese) for Valor Econômico, a Brazilian daily business newspaper, shows that the soy industry is already considering relaxation of the moratorium due to the upcoming change in the forest law. They argue that their agreement cannot ask more from producers than the law. But the fact is that the “Soy Deforestation Moratorium” did ask more than the law from producers before it became clear that the law was about to be changed.

The motive for ending the ban on soy from illegally deforested areas comes from the market. World soybean prices were quite low by the time the “Moratorium” was signed at US$ 5.50/bushel. Now they are as high as US$ 13.60/bushel.

The market has also changed. Most of the demand in the early 2000’s came from the European Union and the United States. Under the pressure of environmentalists, the media, and their consumers U.S. and EU customers have decided not to buy soy coming from deforested land, and to ask for certification of origin. Today most of the demand comes from China. Chinese buyers ask no questions. They are insensitive to what happens in their supply chain to have their food industry adequately fed.

On another recent story (also in Portuguese), Cláudio Ângelo, a senior reporter for the Brazilian daily newspaper Folha de São Paulo reported that land clearing for soybean plantation had increased by 85% in 2011 in comparison to the area cleared in 2010. He also used data from INPE, and mentioned the incentive from high global soy prices. Senator Blairo Maggi (PR-MT), one of the world’s largest soybean producers told him that prices “have never been that high for the last 70 years.”

Sergio Abranches

Local sustainable development 2.0, that’s how we should call what is happening in 80 municipalities of the Brazilian giant state of Pará, in the Amazon region. Pará is 1.8 times the size of Texas. These 80 towns are basically dominated by cattle-ranching and some timber production. Beef, timber, and soybean have been the main culprits for a long history of illegal logging, that has claimed about 20% of the Amazon rainforest, and 27% of Pará’s forest cover.

Until recently, local development in the Amazon has been based on small scale cooperative-based extractive activities for the production of rubber, fruit or fish. Now local development has to address large-scale production, usually for beef, soybean, and wood products exports.

Deforestation has declined sharply over the last five years, from more than 25,000 sq. Km a year to around 7,000 sq. km. Forest degradation, though, has been rampant, especially over the last three years. Degradation has two main sources. One, is selective logging for  timber production. Loggers cut the most valued species and leave those with less or no commercial value. The other is land clearing for pasture or soybean production. Loggers also cut selectively, to hide the process from common satellite detection, until it is too late for authorities to prevent full clearing.

Continue reading…

Sergio Abranches

The Amazon hydropower work site at the Jirau dam, in the state o Rondonia, Northern Brazil, has been occupied by the military of the National Guard after 22,000 workers rebelled against poor work conditions. The works at its sibling Santo Antonio dam have stopped due to a sequence of 16,000 workers’ strikes. They are very controversial projects on all counts, but the government has remained aloof to the environmentalists’ criticism, to negative technical appraisals, and even to the skepticism of many investors.

The hydropower projects in the Amazon rivers are a good example of how not to use hydropower. They were decided autocratically by a group of politicians, technocrats, and contractors. Costs were underestimated by the winning bidders. Appraisals of environmental impact were technically flawed. A controversial special environmental licensing procedure is under judicial review. Social impact at the site and in the capital city of Porto Velho was grossly underestimated.

The two Madeira river plants, Santo Antonio and Jirau, are already under construction, and have been paralyzed by intense labor conflict. Belo Monte, to be built on the Xingu river, got a partial license to set up the construction camp which is also under judicial review. The contractor started to lay the groundwork for the camp, including significant logging of pristine Amazon forest, during carnival to minimize public attention.

Rebelled workers have set fire to the Jirau work camp, burning down sleeping quarters and a restaurant. Strikes had already paralyzed the Santo Antonio works on different occasions. One stoppage occurred immediately before the Jirau rebellion, and another right after the military of the National Guard occupied Jirau’s camp site. Workers complain about breach of labor contract; paid wages lower than what has been offered; a repressive work environment; and degrading work conditions. The contractors have denied all the complaints and said that workers have never told them about their dissatisfaction. Hard to believe. But there were recurrent signs of workers discontent. They were not taken into account neither by the government, nor by the contractors. Besides, worker’s stories collected by special envoys of the major Brazilian newspapers coincide with a well-known pattern of third party labor recruitment in the region. Offers of higher wages and benefits than they will really get are often used to lure workers from afar to these remote Amazon sites. Workers are recruited in other states, to work far from home. Large distances – sometimes thousands of kilometers – and difficulties imposed by employers to pay their travel back home and contractual rights on dismissal force them to stay.

What has really happened in Jirau? This is a story that only further investigation will uncover entirely. The authorities and employers say that the camp was raided by unknown vandals with their faces covered. This was the version the Federal Government has used to decide to send the military special unit, the National Guard, to intervene on what appeared to be a private conflict between workers and employers.

Tension was clearly on the rise in the Jirau camp. Both the contractors and the government should have been aware of that, since signs of discontent were present in several stories on the media. There is no record of any attempt at negotiation or arbitrage. The camp housed around 22,000 workers. Discontent among such a huge number of people enclosed together in a limited space, at a remote area, presents a clear and present danger of breaking into a hard to control riot. Contagion is immediate. Repression only aggravates existing grievances. After the riot was contained by military intervention, all workers were transferred to the city and piled up in a gym unfit to house that many people. No wonder a significant number asked to be paid off and get a ticket home. This has only started to happen after a judicial order forced the employers to comply.

The deterioration of urban life in Porto Velho was fast and could have been predicted by a appropriate professional analysis of social impact. Porto Velho has around 430,000 inhabitants. It received more than 38,000, mainly males, recruited from other states to work in the construction of the plants. The construction has attracted even more people. Residential rentals rose steeply. Porto Velho’s population increased by 12,5% from 2008, when works at the dams began, to 2010 reports the daily newspaper Folha de São Paulo (in Portuguese). The state of Rondonia’s population grew only 2.7% in the same period. The homicide rate increased 44%, and the number of infant and teenager victims of sexual abuse or prostitution rose 18%. Reported cases of rape have increased 76%. Drug trafficking has increased significantly.

These have been very controversial projects since the beginning. They’ll cost too much, depend on subsidized public finance, and have a yet unknown environmental impact. They are too far from consumption centers, requiring very long-distance and expensive transmission lines, crossing pristine tracts of the Amazon forest, with a significant rate of energy loss.

Nobody really knows the impact that changing the volume and flow of the river’s waters will cause to the flooded forest. A part of the affected forest is ‘flooded forest’, it remains under water for all the rain season. The Amazon has a very marked flood-drought regime, and part of plant and animal reproduction takes advantage of it. Seed dispersion is related to the water regime, as well as the food chain of several species.

I’ve crossed several kilometers of flooded forest by boat, negotiating my way through the canopy of trees as high as 35 meters. They were totally covered by water. I could only see the top of their canopy and it gave me the impression of going through bushes rather than being at the top of such high trees.

Analysis about the impact of the volume of organic sediment typical of the Amazon rivers has not been very convincing. Especially because the power plants will use bulb turbines of dimensions larger than any in use anywhere in the world. This technology has also never been adopted in rivers with the sediment characteristics of the Amazon rivers. This means that estimates of maintenance costs and average annual power yields are only hypothetical.

This is even more true for the Belo Monte project. The government says that Belo Monte is a 13,000 MW project, but its average annual yield will be around 4,000 MW in the best case scenario. During the worst days of the drought period it will stop generating power. Not even at peak production, during the flood season, actual yield will get even near installed capacity. Its actual efficiency rate will be much lower than the average yield of southeastern dams.

Negative social impact was grossly underestimated, as current events are clearly showing.

The original project for the Amazon dams was designed by the military government. It was an authoritarian and repressive regime. Environmental concerns were never taken into account. Neither was the economic and fiscal soundness of any project if national security concerns were at play. The occupation of the Amazon, ‘the green inferno’ how they used to call it, was considered a matter of national interest. Cost considerations were set aside, and the idea was to replace the forested area with human settlements. The same idea of ‘national interest’ has now been used by a judge to provisionally authorize construction pending a final ruling by the federal court.

The Lula government has restored and updated the Amazon projects, and has decided to implement them no matter what. On Dilma Roussef’s administration, Belo Monte got a ‘partial’ environmental license to allow building the work camp. The project itself has not been licensed yet because the contractors failed to fulfill all the precautionary conditions and offsetting imposed at the first stage of the licensing process. So, they started building a work camp for a project they don’t know whether or not will be licensed. It may a sign that the government intends to grant the final license irrespectively of the  environmental precautions required.

The three projects are under judicial review. Licensing has been irregular and construction could likely be stopped by a final ruling. Now, in the case of Jirau, labor costs will rise significantly. First it is likely contractors will be sued by many workers asking for  reparations. Second, new workers will ask for signed guarantees of wage levels, benefits, and work conditions prior to accepting replacing those leaving.

Before they started having labor problems, the Jirau contractors had already asked for more finance, as costs estimates increased from $ 5.4 billion to $ 7.8 billion.

Belo Monte’s originally estimated costs were $ 11.4 billion. But the state-owned development bank, BNDES, has already approved subsidized credit amounting to $ 15 billion, and some experts say final cost could be higher than $ 18 billion.

Taking into account the cost and energy efficiency of these projects, as well as their environmental impact, they are hardly justifiable. The same amount of energy could be produced using wind mills, for instance, in Northeastern Brazil, closer to consumption centers. The Northeast’s wind power potential is very high, even when considering only on-shore mills. It has the advantage of reaching peak production during the drought season, when the Southeastern’s hydropower plants’ reservoirs are at their lowest level. The environmental impact is negligible when compared to the Amazon projects. ROI is probably better, when taking into account real maintenance and transmission costs.

But wind power is not a part of the core of Brazilian energy policy. It belongs to a smaller, ancillary program for ‘alternative energy’. The core program only contemplates large hydropower plants; coal, oil, and gas fired thermal plants; and nuclear plants. Small hydro, biomass, wind, and solar, are set to contribute with a very small fraction of total electricity generation.

Sergio Abanches

COP16 closes today its technical segment with no concrete result. Even the draft document sketching the lines of a possible new global climate deal is a “non-paper”, a non-negotiating document.

The technical segment has been fully dedicated to informal consultations. Contact groups led by facilitators have produced summary texts, all “non-papers”, not negotiating drafts. The LCA “non-negotiating” draft prepared by its chair, Margaret Mukahanana-Sangarwe, has been discussed extensively, but delegates considered that it could not serve as the basis for formal negotiations. The document draws extensively on the Copenhagen Accord and “expands on the portions of that text”. It lacks, however, some definitions that are critical for a “balanced” package within and between each of the two trails of negotiation, the LCA and the Kyoto Protocol tracks.

Emphasizing informal consultations to the limit was clearly a Mexican strategy. The Mexican presidency has made all efforts to prevent deadlocks to emerge right at the beginning of the talks. It is also trying to create a positive ambience through informal encounters aiming at increasing the likelihood of a good result. This strategy has indeed helped to create a positive climate. But the side-effect was the lack of concrete results. The Mexican strategy has also triggered some criticism from delegations. Brazilian chief climate change negotiator ambassador Luiz Alberto Figueiredo told me he would prefer “direct negotiations with the Parties”, rather than talking informally with facilitators. During the Sunday informal stock-taking meeting with COP16 President Patricia Espinosa several delegates complained about the delay of direct government to government negotiations.

Christiana Figueres, Executive Secretary of the Climate Convention, inserted a veiled criticism of this excess of informality on her last press briefing: “We’re on Friday, almost the end of the first week. Governments should engage on the difficult task of deciding what they’re going to present to the high level segment. It’s time to switch gears.” She also said that “the challenge of Cancun is how to formalize proposals and pledges within the UNFCCC process on a balanced way.”

Balance is one of the three magic words that could provide the password for a deal at Cancun. It has been evoked repeatedly by all delegations in every press briefing and in every intervention at the stock-taking meetings.

U.S. Chief negotiator, Todd Stern, said that many countries look for a balanced result on both tracks, KP and LCA, here in Cancun. On the Kyoto Protocol, he added that “we are not a part of that negotiation, but I hope there is a way out of this debate without killing the possibilities of an effective result on the other track.”

EU top negotiator Arthur Runge-Metzger said: “The magic word is balance, there is no way to go without it. In the end, what’s important is that the commitments are comparable within the second period of commitment of the Kyoto Protocol and within the agreement that comes out of the development of the Copenhagen Accord. The sum of these commitments has to add up to meet the 2^oC target.” Peter Wittoeck, also from the European Union, considers balancing the two tracks the most “challenging question delegates have to solve in Cancun”. To him progress lies on the perspective of having a second period of commitment for the Kyoto Protocol and a comparable agreement on LCA. “That’s what Europe is offering as a middle ground a two-track balanced package”.

Balance is also key to the issue of transparency, the second magic word, that has actually to do with confidence among the Parties. A crisis of confidence marked the Copenhagen summit from the beginning because of rumors about a “secret paper” from the Danish Presidency. The paper did exist and was published by The Guardian. This hidden agenda led to a break of confidence that irremediably poisoned the negotiating environment. The Mexican Presidency is sparing no resource to create confidence. “No hidden agenda, no secret text” is a stock phrase repeated again and again by president Patricia Espinosa. Several delegates fear that the end of the Kyoto Protocol is at the core of a secret negotiation among a few governments. Thus the need for reassurance that all are committed to the two-track view as well as to a balanced final package deal.

Minister Espinosa said that much at the beginning of her statement Sunday morning: “all of us are fully aware of and respect the fact that this is a two-track process and will continue to maintain balance within and between each of them.”

Governments will have to compromise to reach a balanced agreement. Balance within each track means that adaptation and mitigation have to get a proportionate treatment on the texts. It also means that adaptation finance has to be solved and guaranteed. Balance between the Kyoto Protocol and the Post-Copenhagen Accord (LCA) tracks means that commitments under each of them are comparable, Runge-Metzger argued on his statement to the press last week.

Everybody is calling for compromise here in Cancun, the third magic word. Even Venezuela, usually holding intractable positions, called for compromise on Sunday. Venezuela’s chief climate change negotiator Claudia Salerno asked for a constructive dialogue, and for “those who disagree the most, to talk more to each other”, to move forward and strike a balanced and full deal in Cancun.

Executive-Secretary Christiana Figueres said that she is optimistic, because the governments have arrived in Cancun aware of the need for reaching an agreement for a concerted action on climate change. She asked all “to look beyond their national situations, although without sacrificing their true national interest”. At the end, she said, “nobody will be satisfied, but this is the very definition of a compromise: one from which nobody leaves totally satisfied or totally dissatisfied”. Later she said that delegates should look for a “solution that makes all equally uncomfortable with or comfortable with the final package”.

Paradoxically the best compromise deal should leave all equally dissatisfied, because that would mean everybody has relinquished some principled points that have been deadlocking climate change talks. A compromise that is fully satisfying to this heterogeneous assembly of parties to the Climate Convention, with so many contradictory interests among them, would be void of substance. A compromise without sacrificing some interests would not serve the objective of tackling climate change. We should hope for a solution that dissatisfies individual countries‘ interests and satisfies the target of enhancing the chance of the “best-case” scenarios for climate change.

Issues related to these conflicting interests permeate all aspects of what is under negotiation here in Cancun. They can only be solved politically. All the technical groundwork has been done. The options are all on the table. In an attempt to deal with these issues at the political level and try to strike compromises on them all, the Mexican Presidency has designed pairs of ministers representing the developed and the developing worlds, to act as facilitators on each of these issues.

“I have approached pairs of ministers, one from a developing country and one from a developed country, who I know would greatly benefit our effort by focusing on specific matters. I hope their agendas allow them to undertake this task. Sweden and Grenada could help on matters related to shared vision; Spain and Algeria on adaptation; Australia and Bangladesh on finance, technology and capacity building; New Zealand and Indonesia on mitigation, including MRV, and the United Kingdom and Brazil on items under the Kyoto Protocol. Other ministers, among them those from Ecuador, Singapore, Norway and Switzerland could support on other specific issues as they arise.” (Patricia Espinosa, President of COP16, on Sunday’s stock-taking informal meeting)

We will soon see whether this strategy of political management of the hot issues will work. There is some stress on the relationship between negotiators (“experts”) and the “politicos”. This stress was apparent at other COPs as well. To avoid the politicos to encroach on the “experts” legitimate right to be the actual negotiators within the UN process, president Espinosa has set strict ground rules for the “high-level segment”.

“Ministers will not be expected to draft compromise language, but to help identify where balance is to be found. Ministers will not convene informal sessions of any sort, but will instead approach every delegation they believe ought to be consulted at each specific moment and remain accessible to all. Ministers will not limit their contacts to other ministers, but will be open to dialogue with all and they will reach out to the representatives that each party has decided to appoint. Ministers will not relief the Chairs of their responsibilities in any way, but will support their efforts to resolve matters that have so far not advanced in a more formal setting.” (Patricia Espinosa, President of COP16, on Sunday’s stock-taking informal meeting).

The issues are well known. The ground rules are set. However there are no formal papers to negotiate. Before a “balanced package on the two tracks” can be agreed upon, a frantic day of drafting and text negotiation lies ahead of delegations. Let’s hope that at the end of the day they’ll have substantive drafts to be presented to the ministers and, more importantly, to be tabled at the respective decision-making bodies of the UN process so that the game can enter its decisive phase.

Sergio Abranches
Logging of large areas in the Amazon region has dropped significantly, from August 2009 to July 2010. Both the Brazilian Space Agency, INPE, and Imazon, a non-governmental think-act tank, have captured this trend on their monitoring through satellite images. Imazon says that this trend holds for both large and medium sized plots with at least 12,5 ha. INPE’s head, Gilberto Camara, alerts that the satellite used, MODIS, can’t see logging in areas smaller than 100 ha.

Gilberto Câmara said that logging is increasing in areas of 25 ha or smaller. He explained on his Twitter that INPE’s system, DETER, captures trends, but cannot detect small logging. He also informed that 80% of current illegal logging activity have less than 100 ha. See below the chart he posted.

Adalberto Veríssimo, senior researcher at Imazon tweeted that, by Amazon standards, logging of areas of 12.5 ha should be considered as medium sized.

There is significant consensus among experts about what is happening, in spite of these diverging views on metrics. First, logging of large areas is plummeting. Second, the pattern of logging is changing: logging is increasing at small and medium sized plots, while large logging is decreasing. Third, deforestation is growing in the Southern part of the Amazonas state, an area where forest protection used to be more effective.

Beto Veríssimo has told me that Imazon has detected logging in areas where the forest is denser. This means that the loss of carbon and quality of forest mass by logged hectare is larger than before. Veríssimo argues that logging in the Amazon has a new pattern besides the shift of scale. The main vectors of this new pattern are the Transamazonica and BR-163 roads, agrarian reform settlements, extensive cattle raising, and land grabbing.

Gilberto Câmara is a bit more cautious and says it is too early to talk about a new pattern, solely on the basis of data generated by the SAD (Imazon) and DETER (INPE) models. He would prefer to say this is a trend already detected by the PRODES model in 2009, INPE’s measurement system based on high-resolution satellite images.

Câmara’s cautiousness is welcome. Brazil is on the last month of electoral campaign, and deforestation data have been presented with a political twist by the ministers of Environment and Science and Technology. Câmara wants to make it clear that these are preliminary data without the necessary reach and precision to support definitive conclusions about deforestation patterns.

Although lacking accuracy these observations show that there are forces in action effective enough to change the dynamics, scale and territorial distribution of logging. Câmara is right, though, to say that only the data generated by the high res PRODES model will provide accurate confirmation of these trends.

The soy moratorium and the refusal of large supermarket chains to buy meat from meatpackers operating in deforestation areas have certainly contributed to the reduction of the scale of logging. These two agreements have neutralized the main traditional vectors of deforestation: soybean plantation and cattle ranching. It is important to notice that both resulted from pressure over large consumers by the social movement, without any supporting government policy. Greenpeace, on both counts, produced information and exerted strong pressure to persuade McDonald’s, in the case of soybean exports, and the major supermarket chains – Walmart, Carrefour and Pão de Açúcar – in the case of beef. The government entered as a partner to the agreements after the deals were closed.

But it is also true that policies against deforestation and repression of logging have also contributed to this change. Beto Veríssimo, who is often consulted by policy-makers and systematically evaluates policies for the Amazon region says that measures against logging, especially those adopted during Marina Silva’s term as Environment Minister, have contributed very much to falling deforestation rates.

Imazon’s report has analyzed the situation of 41 towns listed in the government anti-logging policy as those with the larger areas and rates of deforestation, deserving particular attention from authorities. It shows that there was an average 40% reduction of logging in these “critical towns”.

They were divided into three different groups: the first comprising the towns where logging has decreased; the second encompassing towns where there has still been from low to moderate logging; the third, grouping those where logging has increased. The first group has 24 towns, 57% of the list. Deforestation has decreased on average 64% in this group. Group 2 has 8 towns, 19%, their average deforestation rate was 14%. In Group 3, with 24% of the towns on the list, deforestation has increased by 157% on average.

Falling logging rates are good news, but they do not mean the Amazon is not losing forest cover. On the contrary, the loss of forest cover is still too large for anyone to be comfortable with anti-deforestation policies. The chart below shows that the accumulated deforested area continues to grow.

I share Beto Veríssimo’s view that it is about time the Brazilian government sets zero deforestation as a target, instead of the goal of 80% reduction of logging rates by 2020. Veríssimo thinks that zero deforestation by 2014 would be perfectly feasible.

Sergio Abranches
How can a supposedly communist legislator champion the interests of traditional landowners, and seek amnesty to illegal logging, often associated with violent land-grabbing and force-labor? The Brazilian House is right now discussing a bill proposing changes in the Forestry Code Law that does exactly that. The proposal under discussion was drafted by communist deputy Aldo Rebelo, a former Speaker of the House during President Lula’s first term in office.

The Forestry Code was instrumental in reducing deforestation rates. Deforestation although still not entirely sustainable has prevented the loss of a large amount of the Amazon forest. The proposal responds solely to the interests of the more traditional sector of the Brazilian agribusiness. Its main effect, if turned into law, would be to pardon illegal practices that led to deforestation and destruction of riparian vegetation that caused the erosion of river beds and drying of water sources. I’ve been to areas of soybean plantation where producers are desperate about water scarcity brought about by land clearing that destroyed all the previous vegetation, including the riverine, to increase agricultural area. Now rivers and sources are drying, and they’re left with no water for irrigation. In the future they’ll leave the land bare, and look for new areas to occupy pushing deforestation further into the Amazon and the savanna fields (Cerrado).

If approved, the proposal would do harm not only to the environment, but to the economic sustainability of competitive agricultural production in many areas. It benefits a traditional  mode of production that destroys the vegetal riparian protection of river banks and water sources; clears the vegetation that prevents landslides on steep hillsides; disregards the legal reserve of primary forest as a means to protect biodiversity. It is detrimental to a contemporary and competitive agricultural commodity business.

Large global buyers are banning all grain, beef and leather coming from land illegally cleared, or produced with the use of forced labor from their supply chains. In the Brazilian domestic market large retailers such as Walmart, Pão de Açúcar and Carrefour are also banning beef coming from areas of deforestation from their shelves. Major Brazilian exporters of leather goods will soon be forced to do the same.

The bill goes to the extreme of giving fiscal benefits to those who have illegally cleared their land and disrespected rules for the protection of riparian vegetation and primary biodiversity. Farmers who have obeyed all rules and paid a price for being legal will now see those who have thrived in illegality getting subsidized long-term finance to abide by far less demanding rules. Rules that will lead to the resumption of deforestation and destruction of river courses.

How can that happen? An alliance between a communist and the more conservative forces of the right linked to traditional rural practices of production and domination? How come the successors of the Brazilian latifundia can find political help from a supposedly left wing politician? How can a government led by a president who came from the progressive metalworkers union movement, leader of a labor-oriented party let such a bill follow its course unhindered? The government leadership is taking no action either to block or to modify a proposal that contradicts current government policies. It would, among other things, prevent the government from meeting the deforestation targets it has registered under the Copenhagen Accord. Several representatives of the Social-democrat opposition are also supporting the proposal or have adopted an attitude of benign neglect.

The Brazilian political system has some very specific features that help to explain such apparently surreal outcomes. Features that are hard to explain to foreign audiences.

Brazil has a presidential political system in which the President depends on a multiparty coalition to govern. I called it a ‘coalition presidential system’ a long time ago. It explains why president Lula is so uninterested on the fate of the Forestry Code. He has many traditional rural business sectors in his coalition that have a direct interest in changing the Code for their own benefit. The majority of the progressive forces in his coalition are not really interested in what happens to the distant Amazon region or the rich savanna fields of the Brazilian midwest.

Brazilian parties are two-headed entities, with a “national head” focused on presidential coalition politics, and a “regional head” focused on state and local politics. The Forestry Code is far more about regional and local interests than it is about general, strategic national issues. And this is also a measure of the little importance environmental issues have in the national political agenda. There is no place in the Brazilian party system for ideology or policy-oriented behavior. Parties are machines finely tuned to grabbing power and controlling the largest possible share of the national budget. All political dealings are led by the convenience of personalities, factions and their allies. Paramount among allies are business sectors that can provide resources to parties’ and politicians’ campaign finance; labor organizations that can provide loyal vote clusters; and organized sectoral lobbies controlling either money or vote pools.

Ideologies in this system are so fuzzy that ultra-right and ultra-left nationalists can easily coalesce to fight what they see as the perils of globalization. Retrograde business groups and opportunistic politicians who identify themselves as “progressive”, “communist”, or “socialist” can easily find common ground to justify their alliance. Ideological identifications are today no more than meaningless labels. That’s how a “communist” can staunchly defend the interests of landowners. Among the landowners to be benefitted there may be several who have had illegal or illegitimate access to land either by directly appropriating public land, or buying illegally grabbed land with fraudulent property documentation. Some of them are being prosecuted for the use of forced labor in their farms. The proposed version of the bill does not make any clear distinction between legitimate owners of legal land and land-grabbers.

The bill is presently at the stage of House committees review. After being voted at the House floor it has to be reviewed by the Senate. As we are approaching the campaign for general elections, including a presidential election, it is unlikely the bill could become law this year, under normal circumstances. Here lie the hopes of those who want to defend Brazilian forests and rivers: to obstruct the decision-making process and wait for the new correlation of forces that will come out of the elections. Seat turnover is likely to be very high this year: 100% of House seats and two thirds of the Senate seats are up for the grabs. Safe seats will be no more than 30% in the House. In other words only around 30% of the House are likely to get reelected. At least 60% of the Senate seats will change hands, a turnover of around 40%. Newcomers to the House can be as much as 50% of the total. We should also include in the renewal at least another 20% or 30% of seats that will likely be gained by former House members that did not run at the previous election or failed to get elected.

With the possibility of a power shift at the Presidency and a substantial change in party seat share in the Congress, the best strategy for those who oppose these changes to the Forestry Code should be to prevent the bill from being voted this year. The issues addressed by the bill will certainly be debated during the campaign and different points of view will become better known to the public. This would the best way to deal with the complexities and idiosyncrasies of the Brazilian political system.

The proposal responds solely to the interests of the more traditional sector of the Brazilian agribusiness. Its main effect, if turned into law, would be to pardon illegal practices that led to deforestation and destruction of riparian vegetation that caused the erosion of river beds and drying of water sources. I’ve been to areas of soybean plantation where producers are desperate about water scarcity brought about by land clearing that destroyed all the previous vegetation, including the riverine, to increase agricultural area. Now rivers and sources are drying, and they’re left with no water for irrigation. In the future they’ll leave the land bare, and look for new areas to occupy pushing deforestation further into the Amazon and the savanna fields (Cerrado).

The proposal does harm not only to the environment, but to the economic sustainability of competitive agricultural production in many areas. This mode of production destroys the vegetal riparian protection of river banks and water sources; clears the vegetation that prevents landslides on steep hillsides; disregards the legal reserve of primary forest as a means to protect biodiversity. It is detrimental to a contemporary and competitive agricultural commodity business. Large global buyers are banning all grain beef and leather coming from land illegally cleared, or produced with the use of forced labor from their supply chains. In the Brazilian domestic market large chains such as Walmart, Pão de Açúcar and Carrefour are also banning beef coming from areas of deforestation from their shelves. Major Brazilian exporters of leather goods will soon be forced to do the same.

The proposal goes to the extreme of giving fiscal benefits to those who have illegally cleared their land and disrespected rules for the protection of riparian vegetation and primary biodiversity. Farmers who have obeyed all rules and paid a price for being legal will now see those who have thrived in illegality getting subsidized long-term finance to abide by far less demanding rules. Rules that will lead to the resumption of deforestation and destruction of river courses.

How can that happen? An alliance between a communist and the more conservative forces of the right linked to traditional rural practices of production and domination? How come the successors of the Brazilian latifundia can find political help from a supposedly left wing politician? How can a government led by a president who came from the progressive metalworkers union movement, leader of a labor-oriented party let such a bill follow its course unhindered? The government leadership is taking no action either to block or to modify a proposal that runs against current government policies. It will, among other things, prevent the government from meeting the deforestation targets it has registered under the Copenhagen Accord. Several representatives of the Social-democrat opposition are also supporting the proposal or have adopted an attitude of benign neglect.

The Brazilian political system has some very specific features that help to explain such apparently surreal outcomes. Features that are hard to explain to foreign audiences.

Brazil has a presidential political system in which the President depends on a multiparty coalition to govern. I called it a ‘coalition presidential system’ a long time ago. It explains why president Lula is so uninterested on the fate of the Forestry Code. He has many traditional rural business sectors in his coalition that have a direct interest in changing the Code for their own benefit. The majority of the progressive forces in his coalition are not really interested in what happens to the distant Amazon region or the rich savanna fields of the Brazilian midwest.

Brazilian parties are two-headed entities, with a “national head” focused on presidential coalition politics, and a “regional head” focused on state and local politics. The Forestry Code is far more about regional and local interests than it is about general, strategic national issues. And this is also a measure of the little importance environmental issues have in the national political agenda. There is no place in the Brazilian party system for ideology or policy-oriented behavior. Parties are machines finely tuned to grabbing power offices and getting a fair share of the national budget. All political dealings are led by the convenience of personalities, factions and their allies. Paramount among allies are business sectors that can provide resources to parties’ and politicians’ campaign finance; labor organizations that can provide loyal vote clusters; and organized sectoral lobbies controlling either money or vote pools.

Ideologies in this system are so fuzzy that ultra-right and ultra-left nationalists can easily coalesce to fight what they see as the perils of globalization. Retrograde business groups and opportunistic politicians who identify themselves as “progressive”, “communist”, or “socialist” can easily find common ground to justify their alliance. Ideological identifications are today no more than meaningless labels. That’s how a “communist” can staunchly defend the interests of landowners. Among the landowners to be benefitted there may be several who have had illegal or illegitimate access to land either by directly appropriating public land, or buying illegally grabbed land with fraudulent property documentation. Some of them are being prosecuted for the use of forced labor in their farms. The proposed version of the bill does not make any clear distinction between legitimate owners of legal land and land-grabbers.

The proposal is presently under discussion by the House at the committee level. After being voted at the House floor it has to be reviewed by the Senate. As we are approaching the campaign for general elections, including a presidential election, it is unlikely the bill could become law this year, unless President Lula tells his leaders in Congress to give it urgency status. Here lies the hopes of those who want to defend Brazilian forests and rivers: to obstruct the decision-making process and wait for the new correlation of forcers that will come out of the elections. Seat turnover is likely to be very high this year: 100% of House seats and two thirds of the Senate seats are up for the grabs. Safe seats will be no more than 30% in the House. In other words only around 30% of the House are likely to get reelected. At least 60% of the Senate seats will change hands, a turnover of around 40%. Newcomers to the House can be as much as 50% of the total. We should also include in the renewal at least another 20% or 30% of seats that will likely be gained by former House members that did not run at the previous election or failed to get elected.

With the possibility of a power shift at the Presidency and a substantial change in party seat share in the Congress, the best strategy for those who oppose these changes to the Forestry Code should be to prevent the bill from being voted this year. The issues addressed by the bill will certainly be debated during the campaign and different points of view will become better known to the public. This should be the best way to deal with the complexities and idiosyncrasies of the Brazilian political system.

Sergio Abranches

Amidst a judicial battle around the hydropower dam of Belo Monte, in the Brazilian Amazon region, the government has hastily auctioned the project. The 7-minute long bidding is being contested at the federal courts.

There are four lawsuits, as of yesterday, to stop the project, and revoke the auction. The government has been able to suspend the injunctions and go on with the auction, but there has been no ruling yet by the Federal Court of Appeals on whether the whole process has been in accordance to the law and environmental rules. See Jeremy Hance story on the Belo Monte auction for Mongabay here.

Only 8 months before being replaced by a new administration, the government has bypassed rules and set all legal and policy precaution aside only to see the project auctioned. What has been puzzling many analysts, including myself, is why is President Lula fighting so stubbornly to speed up a project that clearly requires a more thorough technical evaluation on all grounds.

It is also intriguing why the government has refused to look at any alternative, even other hydro plants already planned. The project has raised doubts on economic, financial, energy efficiency, environmental, and procedural grounds. There is no justification for such a hasty implementation. The country will have a surplus of electric power of about 4,000 mW by 2013. Technological uncertainties may lead to skyrocketing maintenance costs. The dam is more than 1,000 km away from the grid. For its electricity to reach consumer centers the government will have to build a long and very costly transmission line. There are better alternatives within the grid area. The government has never done a comparative analysis of the costs and benefits of the Belo Monte plant against other hydro or wind power alternatives closer to consumer centers.

One of the Federal Prosecutor’s arguments is that the auction has specified a larger flooded area than allowed by the provisional environmental license. If the court finds that there is a difference between what was auctioned, what was licensed, it is likely that it will be revoked.

The environmental license itself is contested at the Federal Court due to several irregularities identified by the Federal Prosecutor. He has argued that it was granted by Ibama, the federal environmental agency, without a complete assessment of the dam’s environmental impact, as required by law. He attached documents showing that Ibama’s analysts wrote several memos stating that there were many technical points requiring clarification, before an appropriate assessment of environmental impact could be effectively made.

The project has a huge environmental impact, endangering forest reproduction over a 100 km long tract of the Amazon rainforest. It would also reduce the fish and water supply of local indigenous communities. Belo Monte is controversial on economic and energy security grounds as well. It is the less efficient electric power project under consideration in Brazil. It will cost over US$ 17 billion and would have to be almost entirely subsidized. The fiscal risk is very high. The maximum tariff adopted as a ceiling for the auction, of US$ 47.00 per kWh, is too low to make it financially viable to private investors. As a result, private investors have decided to participate only under the umbrella of state-owned companies. To circumvent private financial objections, the government has decided to organize consortia led by state-owned power companies. Private investors were invited to join as minority partners. The state-owned investment bank, BNDES, will provide highly subsidized finance for 80% of the project. The return on investment is so low that the pension funds of state-owned corporations the government wanted to bring to the consortia could not participate. ROI is smaller than the minimum set by the law that regulates pension funds.

The Belo Monte project was first released in 1979. Its original design was an environmental nightmare. Although subsequent redesigning has reduced its impact on the environment, it failed to remove its structural flaws. For the plant to be more efficient, the dam would have to be much larger, doing an unbearable damage to the Xingu river and to the Amazon forest. To minimize environmental damage, the project ends up with one of the lowest capacity to yield ratios in the Brazilian power sector. Its annual average power yield would be within the range of 3,500 mW – 4,500 mW, depending on the water flow, for an installed capacity of 13,000 mW.

Even for the plant to generate 4,500 mW annually, channels would have to divert a huge amount of the water flow into the dam. Upriver water availability would be severely compromised. Draining the river upstream would have important environmental consequences. A large portion of the rainforest in this region remains flooded for several months. The flood season coincides with the fruit season. Several species of fish enter the forest area when it is flooded and eat fruits, becoming major vectors for forest spreading and reproduction along the river banks. Depending on the water flow remaining upriver after the diverting channels are operational, most of the forest area would no longer be flooded and the forest would die. The level of remaining water would lead to imbalances on forest life and biodiversity. It would also negatively impact fisheries and the food supply of the local indigenous population. There is risk of spreading vector-borne epidemics, particularly malaria and dengue fever, because of changes in the distribution of water, drying upriver and flooding at the dam site. Levees would be necessary to reduce flooding in the rain season by water overflowing the dam.

Emissions of methane due to forest degradation and death were not counted as environmental impacts. The dam could also become a major source of emissions due to the large amount of organic sediment typical of Amazonian rivers.

The winner of the 7-minute auction was a loose coalition of companies, assembled only a few days before the bidding, and led by state-owned CHESF. The government agency in charge of auctioning, ANEEL, has made several last-minute maneuvers for the group to be entitled to register. Their bid of US$ 44.00 has been unanimously considered as untenable. It is consensus in the financial markets and in the electric power sector that even the US$ 47.00 set as ceiling by the government would not be profitable. Experts who are favorable to the project, although critical of the way the government is conducting the process, say that the minimum profitable tariff would be US$ 57.00, taking finance subsidy into account. O Globo newspaper columnist Miriam Leitão gives more details on the final dealings that led to this objectionable fast-track process. Her column, here, reveals several important aspects of the Belo Monte affair (in Portuguese).

The dominant groups in the Brazilian electric power sector – contractors, experts, consultants, government officials – refuse to even consider wind power as an alternative, in spite of the country’s obvious wind and solar power advantages. Brazil has only 600 mW of wind power installed capacity, compared to China’s almost 30,000 mW. China has increased its capacity by 13,800 mW in 2009, more than Belo Monte’s nominal capacity.

Only two experts, among more than a dozen interviewed in the Brazilian press, said that wind power should be considered as an alternative. The Brazilian energy establishment is so antagonistic to the idea of wind power, that there is no serious official inventory of the country’s wind power potential. There is only a very partial survey of on-shore potential. Recent academic research has estimated that Brazil’s off-shore potential is even greater than on-shore. There are indications that in some on-shore sites in the Northeastern states, and several off-shore sites, along the coast, installed capacity to effective yield ratios could be as high as 50%, compared to the commonly used 30% average. The difference has to do with the direction and strength of the wind during the day and the number of windy days in the year. But no official and systematic appraisal has ever been released.

Senator Marina Silva, the Green Party presidential candidate, has told me that Belo Monte should be reexamined and the government should conduct further public inquiries before it is thoroughly reviewed by Ibama, the federal environmental agency. The forerunner in the polls, the Social Democrat candidate, José Serra, has not commented. But he has adopted greener policies while governor of the State of São Paulo. If the electoral wind does not go in the direction of President Lula’s candidate, he might well have bet his political assets on a damned dam.

Preliminary satellite data points to the smaller amount of logging since measurement began. But can it be sustained?

Sergio Abranches

INPE – The National Space Research Agency reports a major reduction of deforestation rates in the Brazilian Amazon. Preliminary satellite data shows that total deforestation from August 2008 to July 2009 reached the lowest level since measurement began: 7,008 sq. km. Although the government, in full electoral drive, attributes this sharp drop in logging activity to policies of land property regularization, it has other causes.

The government is also celebrating these figures as a durable achievement, which is unlikely to be true. The major factor behind such a low number was the recession, that has dramatically reduced housing activities, the major source of demand for Amazon timber – both legal and illegal. The world economic crisis has also substantially reduced foreign demand for agricultural commodities, at the same time their prices fell significantly. There is a historic correlation between agricultural commodities prices and deforestation in the Brazilian Amazon.

Deforestation has been, nevertheless, on a downward trend since 2005. The two major economic drivers of deforestation in Brazil, soybean plantation and cattle ranching are under relative control due to successful action from Greenpeace. First the NGO has targeted soybean production, and led major consumers such as MacDonald’s, and its major supplier, Cargill, to join other large companies on a soy moratorium that is now 3 years old. Earlier this year, Greenpeace targeted cattle retailers, and as a result the larger supermarket chains Wal-Mart, Pão de Açúcar and Carrefour announced a ban on beef from ranchers and slaughterhouses accused of deforestation by state prosecutors. The government became a part of these initiatives after they were already in force.

This downward trend has also resulted from policies the of the command and control introduced by former Environment Minister Marina Silva, and maintained by the present minister Carlos Minc. Minc has also increased Federal Police and Environmental Agents’ raids against cattle ranchers and illegal loggers in the Amazon that began with so-called Operation Arch of Fire created by Marina Silva.

Among the most effective actions taken by the former minister was the resolution by the Monetary Authority prohibiting financing of farms and companies found to be illegally logging.

But it is clear that deforestation will only drop on a sustained way after a whole new development policy for the region is implemented.

Although this lower level of deforestation is good news, it is still too high. According to Warren Dean (With Broadax and Firebrand: The Destruction of the Brazilian Atlantic Forest) it took 150 years for the sugar cane producers to destroy 7,500 sq. km of the Atlantic Rainforest, between 1700 to 1850. In other words the government celebrates as a great achievement the fact that we are logging in one year the same amount of trees that were cut from the Atlantic Rainforest over 150 years. (Thanks to @claudioangelo for reminding us).

The government has been sounding its trumpets at every opportunity regarding the environmental agenda, since former Environment Minister, Marina Silva, quit Lula’s party, PT, to join the Green Party – PV on a bid to the Presidency in 2010. Suddenly a government that has always been aloof to environmental and climate change issues moved them to the center of its political marketing agenda.

This newly found concern for the environment will likely influence the government’s decision to commit to a quantifiable action aiming at curbing carbon emissions in Copenhagen. A good sign of this propensity for a shift on Brazil’s traditional diplomatic state of denial is that Lula has appointed his minister Dilma Roussef as head of the Brazilian delegation. Dilma Roussef, Lula’s Chief of Staff has been personally picked by the president as his party’s presidential candidate. This decision is likely to be announced later today. Tomorrow president Lula leaves for a visit to France, and minister Roussef goes from Paris to Copenhagen for preparatory talks on the way to COP15.

These are all incremental improvements that will require further work to become truly meaningful. The good news is that inertia has been broken. Underneath a heavy clutter of green washing and political marketeering there is some progress that may prove useful in the future, after politics gives room to sound policy.

A paper to be presented to the Panel: “It’s Not Easy Going Green”of the Divisions on Science, Technology and Environmental Politics, and Comparative Politics of Developing Countries at the 2009 Annual Meeting of the American Political Association, Toronto, September 3-6, 2009.

Sergio Abranches

SUMMARY

New models of development will be required to contemplate, simultaneously, avenues for low and carbon-free production and consumption; as well as adaptation to the emerging effects of climate change. The crucial transitional choices regarding how much further climate change we are willing to contract will be made in the 2009-2030 period.

A low-carbon society should not necessarily pose absolute, long-run limits to human development and general welfare.

In Brazil, moving in a very few decades towards a low-carbon society would represent a qualitative breakthrough that could reduce the costs of transition from a high-carbon emerging economy to a low-carbon developed one. The agenda for change in this direction is in effect a development agenda, rather than a matter of limits to growth. It will require new patterns of land, natural capital, and energy use. It would entail more, rather than less, global integration and networking while, at the same time, relying on regionally specific productive, developmental and adaptive capabilities. The dynamic matrix of this new

development paradigm will necessarily be knowledge-based, but framed by the historic, structural and physical specific properties of local societies.

In Brazil, that would call for a long-run shift from mechanical and metallurgical industries to a new low-carbon biotechnological industry, capable of producing low-carbon feedstock, and second and third generation biopharmaceuticals, biofuels, and biopolymers. The central and special focus of this strategy ought to be the Amazon. No low-carbon future could be envisaged to Brazil unless she can stop deforestation in a very few years. To sustain a zero-deforestation strategy Brazil has to occupy the Amazon with unobtrusive science and technology, replacing soybean plantations and pastures.

If interested you can download it here (under SSRN rules) http://bit.ly/GqRdJ

Sergio Abranches

The people of the forest know about our global predicament. But we seldom remember to ask them what they are experiencing.

We were preparing for a series of small presentations to the “people of the forest” – rubber-tappers, Indians, small tenants, fishers – on climate change, the Amazon rainforest and REDD (Reduction of Emissions from Deforestation and Degradation). The setting was the meeting “People of the Forest and REDD” organized by the Forum for a Sustainable Amazon in Rio Branco, capital city of Acre, the Amazon westernmost state. The core idea was that we should be simple, and make a strong case for the connection between an ambitious climate change policy, the protection of the tropical forest and the payment for environmental service and avoided deforestation.

They were about 100 odd, from several parts of the forest, mainly, but not only, within the State of Acre, the Westernmost Amazon state. All very interested on how greenhouse gases warm the Planet, and how warming causes climate change. They were also very concerned about the relationship between their forest and all that. They knew deforestation is bad for all, and fires are a plague that brings many casualties to wild animals, and, in many cases, is hazardous to their communities.

Photo: Sergio Abranches

When I mentioned the flying rivers, the immense amount of water vapor that hangs over the canopy of the trees, the scientists are studying, and how they had as much water, sometimes more, than the rivers themselves, their eyes were shinning and their heads balanced up and down in agreement. Rivers do fly out there. They knew it all.

When the floor was opened to questions and statements almost all of them had something to say.

An old fisher, Antonio, told us about drying rivers and igarapés (water channels formed by the main rivers). He talked about deforestation, degradation and erosion, and how they were reducing quality of life for the river.

Photo: Sergio Abranches

A rubber-tapper, Luiz, told us about lawlessness and the lack of citizenship rights, where there is no permanent governmental presence.

Photo: Sergio Abranches

Benki Piyãko, leader of the ashaninka people, said they, indigenous forest people, “know the emissions of greenhouse gases are not of their making, they are the result of other people’s action.” They are aware, he told me, it is a problem that affects them “in many ways.” On an interview to Brazilian journalist Altino Machado, during the meeting, he talked about afforestation and wild game breeding, as a means to feed their people, reduce emissions and displace cattle ranching.

Photo: Sergio Abranches

He said that “the great afforestation, with native species, for logging, and fruit.” He envisions “associating forest economic management, and breeding of wild game” as a countervailing power to cattle ranching. “We will survive and sustainably manage our natural resources, protecting and using ou lakes, rivers, breeding species now threatened of extinction. We can live out of what Nature has.”

We, on our turn, have a lot to learn from them. They have the cases, they know the ways of the forest, they know how climate changing is happening, what forest degradation does to their people and to the rest of the forest. A respectful connection of our two societies, can be good for both. They also have many things to learn, but brought to them respecting their culture. Some of them are no longer guardians of the forest. They should be convinced to go back to their original role.

I was particularly happy to see Indian chiefs proudly using their headdresses, and coming to discuss REDD, as a mechanism they understand and could use to protect the forest, their cultural ways, and fight global climate change. We will need leadeship from these citizens of two cultures to protect the Amazon.

Photo: Sergio Abranches