Paying property owners not to clear land


Conserv staff member (left) with Mato Grosso state cattle rancher who is among the landowners receiving pilot project payments in return for keeping a larger share of their land in a natural state than is required by law. (Photo by Sara Pereira-IPAM)

Concerns about woodland protection in Brazil often focus on the illegal deforestation of lands earmarked for conservation. And small wonder: For decades, miners, loggers and land-grabbers have unlawfully despoiled protected lands ranging from indigenous reserves to national parks. Meanwhile, private ranchers and farmers have cleared their properties far in excess of established government limits.

Increasingly, though, a distinct challenge in the woodland-conservation equation is gaining attention as well: How to ensure ongoing protection of environmentally valuable natural lands where clearing is legally allowed?

Prime evidence of that attention is Conserv, Brazil’s first private nonprofit initiative to make so-called environmental-services payments to landowners who pledge to keep more of their property forested than they are required to by law.

Currently in its pilot stage, Conserv was launched in October 2020 by the Amazon Environmental Research Institute (IPAM), a Brazilian nonprofit, in partnership with two U.S. conservation organizations—the Environmental Defense Fund and Woodwell Climate Research Center.

The initiative aims to encourage private landowners to exceed their conservation requirements under the Forest Code, Brazil’s main forest-protection law. The code mandates that landowners preserve native vegetation on 80% of their property in the country’s Amazon region; 35% in the Cerrado, which is the sprawling wooded savanna bracketing the southern Amazon; and 20% in other biomes.

This leaves a staggering amount of land that can be cleared legally—over 13 million hectares (32 million acres) in Brazil’s Amazon region alone.

Conserv’s overarching goal is to incentivize conservation of this land through payments for environmental services, an approach known as PES. The nine landowners participating in the pilot so far are being paid under 36-month contracts to preserve natural lands they otherwise would be legally allowed to clear. Organizers aim to sign new, 10- to 20-year contracts with these and other pilot participants being recruited, then bring on still more landowners when the program scales up with funds from private investors after the pilot’s 36-month contracts expire.

Funding for Conserv thus far has come from the Dutch and Norwegian governments, which have committed US$6 million, an amount expected to finance Conserv until the last of its pilot-phase contracts with landowners expire in late 2024 or early 2025.

The nine current participants, all of them Cerrado landowners in the western Mato Grosso state municipality of Sapezal, have committed to conserve a total of 8,410 hectares (20,781 acres) above and beyond their Forest Code obligations during the three years of their pilot-phase contracts. In return, they are collectively receiving payments amounting to US$500,000 a year.

To verify compliance on behalf of Conserv, IPAM is using satellite images, GPS coordinates and maps, and onsite inspections. Contract amounts can vary from landowner to landowner, but Conserv staff members say all are calculated to be competitive with the income that could be earned if the property were cleared and used for ranching or farming. The property’s conservation value, its importance as an ecological corridor to surrounding land and the extent of its carbon stocks are also taken into account, they say.

Conserv aims to boost the pilot phase’s total protected property to 20,000 to 25,000 hectares (49,000 to 62,000 acres) by signing 36-month contracts with 15 to 20 additional landowners elsewhere in the Cerrado and in the Amazon region over the next six months.

Organizers plan to make the program permanent by developing a business model to attract investors, whose funds could be used to boost the number and duration of land-conservation contracts.

For their part, the investors, ranging from private banks and insurance companies to supermarket chains and consumer-goods retailers, could use their participation in Conserv to gain green-marketing leverage in environmentally conscious markets and perhaps also eventually to secure carbon credits.

Favoring such prospects is the fact that seemingly untrammeled land clearing under the administration of right-wing Brazilian President Jair Bolsonaro has drawn growing pushback from international corporations in recent years. (See "Corporations pressing Brazil to curb deforestation" —EcoAméricas, October 2020.)

Marcelo Stabile, an IPAM researcher who is Conserv’s coordinator, argues that once brought to scale, the model could significantly boost land conservation and related climate-protection efforts.

“Very few mechanisms exist here to reduce legal deforestation by providing rural landowners with financial incentives,” Stabile says. “That’s why Conserv is building relationships with Amazon and Cerrado landowners, to help them better understand how safeguarding their forests and their carbon stocks can help mitigate climate change while benefiting their bottom line.”

Experts say that if businesses can earn carbon credits in return for investments in PES programs such as Conserv’s, funds could become available to expand landowner participation. That, in turn, could provide Brazil a major boost in meeting its Paris Climate Agreement commitment to reduce greenhouse gas emissions 37% by 2025 and 43% by 2030 compared to 2005 levels, they say.

“Mato Grosso state, Brazil’s biggest agricultural commodity producer, has seven million hectares (17 million acres) of land in the Amazon, Cerrado and Pantanal [a western Brazilian floodplain] that can be legally cut,” says Fernando Sampaio, the director of Produce, Conserve, Include (PCI) Strategy, a sustainable-development advocacy group located in Mato Grosso state. “That amounts to 7% of the state’s territory. A growing number of European importers who source Amazon- and Cerrado-grown beef and soy might be willing to invest in Conserv.”

Eduardo Bastos, until recently sustainability director in Latin America for pesticide and seed maker Bayer, says the company is considering making a contribution to Conserv, which he calls an “unprecedented effort by a nonprofit to curb legal deforestation in Brazil.”

Adds Bastos: “One of Bayer’s sustainability goals is to reduce greenhouse gas emissions from agriculture 30% by 2030. We can help do so by connecting our seed and pesticide buyers to Conserv.”

Conserv is not the only scheme intended to incentivize private landowners to keep more of their natural land intact. For instance, a three-decade-old federal government program gives property-tax breaks to landowners who conserve their land as a Private Natural Heritage Reserve (RPPN).(See "Private-reserve program benefits Brazil" —EcoAméricas, December 2003.) Brazil has some 1,500 RPPNs, which collectively cover over 750,000 hectares (1.8 million acres), according to the International Union for Conservation of Nature (IUCN).

But experts say programs based on direct payments to property owners for environmental services, like the one being developed by Conserv, could have greater conservation potential. That, they say, is because they’re more likely to attract funding from private investors and could be integrated more easily into carbon-credit regimens.

Though the private, nonprofit Conserv program is the first initiative of this type to begin operating in Brazil, the Brazilian government has set up its own such effort. Called Floresta+, the program was created in 2020 after the UN-backed Green Climate Fund (GCF)—the global financing mechanism that helps developing countries address climate change—announced it would contribute US$96.5 million to the effort.

It was the GCF’s first payment under REDD+, the UN-backed strategy that promotes forest protection in developing nations in order to help cut greenhouse gas emissions. (See "Brazil to implement GCF-funded forest payments" —EcoAméricas, July 2020.) Though the GCF has disbursed the funds for Floresta+, the Brazilian government has yet to make the program operational and begin distributing payments to landowners.

Both Conserv and Floresta+ could benefit from a recently enacted Brazilian law that sets federal policy and procedures for government and non-governmental payment for environmental services schemes.

The legislation, for instance, facilitates transfers of PES-earmarked funds, say, from foreign governments or multilateral institutions to PES projects in Brazil. It also provides certain legal protections that program stakeholders can use to defend PES payments if these are challenged in court.

President Bolsonaro vetoed several provisions of the bill, which won congressional approval in Dec. 2020. But Congress overrode the three most important vetoes in March of this year, preserving investor-friendly provisions to make PES fund transfers from domestic and foreign funders more transparent and easier to direct to specific conservation projects.

“The law’s regulations will make it easier to invest in PES programs here because they make the PES policy framework clearer,” says Bayer’s Bastos.

For his part, Stabile agrees that the new legislation could benefit regimens such as Conserv, but he says crucial groundwork for such programs has to be laid at the COP26 UN Climate Change Conference scheduled to take place in November in Glasgow, Scotland.

“The PES law could attract investments to Conserv, depending on how it is regulated,” Stabile says. “Ideally, the law will enable us to scale up Conserv. But investments from foreign companies will largely depend on what is decided at COP26 in regard to defining the rules that govern Article 6 of the Paris Climate Agreement. That article will deal with whether and how forest carbon can be used to offset national and company emissions.”

Sampaio of PCI Strategy agrees that establishing a dependable pipeline of funding is the key hurdle for payment-for-environmental-services programs such as Conserv.

“The main challenge in creating and expanding the size of programs like Conserv, an initiative now financed by donations from a few European governments, is to maintain and guarantee the cash flow needed to finance growth,” he says. “Such financing could come from agribusiness end-buyers, like supermarket chains that buy Amazon and Cerrado beef, or from European feedstock buyers, who purchase Amazon and Cerrado soy to fatten their pigs. Or the funds could come from Amazon and Cerrado state governments that set up public policy financing to support such programs.”

- Michael Kepp

In the index: Land owned by one of the Conserv pilot project participants includes soy cropland as well as protected forest. (Photo by Pantanal Filmes)

André Lima
Institute for Democracy and Sustainability (IDS)
Brasília, Brazil
Tel: +(55 61) 3546-8864
Fernando Sampaio
Mato Grosso State Produce, Conserve and Include (PCI) Strategy
Cuiabá, Mato Grosso, Brazil
Tel: +(55 65) 99911-9301
Marcelo Stabile
IPAM Researcher and Conserv Coordinator
Amazon Environmental Research Institute (IPAM)
Brasília, Brazil
Tel: +(55 61) 2109-4150
Documents & Resources
  1. Brazil’s new PES legislation (in Portuguese): link