The Funding Puzzle

When Portuguese explorers reached Brazil in 1500, the Atlantic Forest covered a huge swath of coastline running from the northeastern tip of South America all the way down to southern Brazil—an area comparable to the expanse from Maine to South Carolina in the United States. Bordered by the grasslands of the Cerrado to the west and the Atlantic Ocean to the east, it featured ecosystems that were sharply different from those elsewhere in South America. 

It was, and against all odds still is, rich in both flora and fauna. Scientists have identified some 450 tree species on one hectare (2.5 acres) of Atlantic Forest—more than are found along the entire Eastern Seaboard of the United States. The forest is home to 20,000 plant species, 1,000 bird species and 26 species of primates. A surprisingly large number of them are endemic to the area: Some 40 percent of plants, 27 percent of mammals, 38 percent of freshwater fish and a remarkable 61 percent of amphibians are found nowhere else.

Today, only 7 percent of the forest remains well-preserved; restoring that forest is an enormous task. Just saying the numbers provokes awe: If all goes to plan, by 2015 the Conservancy and local partners will have planted 1 billion trees over 2.5 million acres of land spread out over thousands of square miles. This will require roughly $1 billion and will promote the creation of thousands of jobs in seed collection, nurseries, tree planting and maintenance activities, and possibly thousands more jobs in related industries.

It is a bold plan, but it is not without precedent, says Fishbein. Costa Rica has protected and reforested more than 1 million acres by paying land­owners for the water and other services their forests provide. China began investing $1 billion a year on reforestation programs after the Yangtze River burst its banks in 1999. To date it has reforested some 2.5 million acres.

And in the United States during the Great Depression, President Franklin Delano Roosevelt’s administration hired 3 million unemployed men to plant 3 billion trees over nine years as part of the Civilian Conservation Corps.

The main obstacle to such a program in Brazil, acknowledges Fishbein, is funding. The Brazilian government is not likely to fully fund such a large-scale program. Instead, Conservancy officials envision a program that requires only limited assistance from governments and donors. The bulk of the funding, says Fishbein, could come from payments for the services that the forest provides. For example, nascent carbon markets are purchasing credits for the carbon dioxide absorbed by replanted trees, allowing purchasers to offset greenhouse gas emissions elsewhere—and pay for reforestation in the process.

But a more immediate opportunity may lie in the water the forest provides. A 1997 Brazilian law created a legal framework for local committees to oversee community watersheds. The committees are made up of state and local government officials, conservation groups, private companies and local users. Together they establish programs and policies for the sustainable use of their water.

According to Marcelo Morgado, the environmental affairs advisor to the president of São Paulo’s water company, a few committees recently started to levy water users such as municipalities, utility companies and industries. Some of the money is being used to pay for sewage stations and treatment plants. But some of it is also being used for reforestation—including at the Conservancy’s pilot program in Extrema. “This is the first time in Brazil that farmers are receiving compensation for the water services they are providing to millions of people,” says Miguel Calmon, director of the Conservancy’s Atlantic Forest conservation program.

Using fees to replant trees, especially along rivers and streams, makes sense. Rapid urbanization the length and breadth of the Atlantic Forest has affected both the quality and quantity of water in São Paulo and other cities, explains Morgado. Reforestation is “fundamental” if they are to reverse that trend, he says.

Properly managed ecosystems provide higher-quality water by reducing the amount of sediment and contaminants being washed from the soil and reaching rivers. Undisturbed forests minimize erosion and help retain water, preventing rapid runoff and providing reserves even during dry spells. And by holding the soil together with their roots, trees also reduce the likelihood of floods. The Conservancy is betting that more watershed committees can be persuaded to embrace reforestation as a way to improve local water supplies.

“In Piracicaba and Paraiba do Sul, they already raised 10 million dollars,” says Calmon of the basins providing water to São Paulo and Rio de Janeiro. “We hope that money will go towards forest protection and reforestation. We want to create a permanent funding source. That is a very important component in the whole puzzle.”

In Extrema and in two other local watersheds, money from the watershed committee near São Paulo is being pooled with funds from the Conservancy, the town and state agencies. The town then pays farmers a small fee in return for the right to reforest their riverside pastures and conserve existing forest. As an additional incentive, the reforestation helps landowners get into compliance with Brazil’s frequently ignored Forest Code. By law, farmers in the Atlantic Forest must conserve as natural vegetation 20 percent of their overall territory and all riparian areas and steep slopes. 

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Nature picture credits (top to bottom): Photos © Scott Warren