1 federative republic of

President Jair Messias Bolsonaro

Vice-President Antônio Hamilton Martins Mourão

MINISTRY OF THE ENVIRONMENT OF BRAZIL Minister Ricardo de Aquino Salles

EXECUTIVE SECRETARIAT Executive Secretary Luís Gustavo Biagioni

DIRECTORATE OF EXTERNAL RESOURCES Director Marcelo Donnini Freire

FORESTS AND SUSTAINABLE DEVELOPMENT SECRETARIAT Secretary Joaquim Alvaro Pereira Leite

DIRECTORATE OF Director Marta Lisli Ribeiro de Morais Giannichi Ministry of the Environment of Brazil Forests and Sustainable Development Secretariat

National Program of Payment for Environmental Services Floresta+

Brasília - DF MMA 2020 Table of Contents

Introduction ...... 5 Floresta+ Program...... 6 Payment for Environmental Services...... 6 Environmental Services...... 7 Landholding Categories...... 7 Origin of the Resources...... 8 Payment Initiatives...... 8 Regulations...... 9 Strategic Objectives ...... 9 Pilot Project Floresta+ Amazon...... 10 Consultations with Interested Parties...... 10 Desired Projected Results ...... 10 Conclusion...... 11 5 Introduction

During the decade of the 1930s, the first payments for environmental services appeared in the United States based on the conservation of soil and water resources in areas under planting. At present, the Conservation Reserve Program of the US Department of Agriculture devotes robust allocation of its resources for payments for environmental services to American farmers. By the end of the 1990s in Latin America, payment programs for environmental services had become a standard and were implemented by countries such as Costa Rica and México. In Brazil, in July of 2020, the National Program of Payment for Environmental Services Floresta + was launched, as the largest program of this kind in the world, focused on the conservation of native vegetation. When society realizes that the poor use of soil could be avoided by an agricultural activity that could instead protect it, the benefits generated by environmental services are recognized. When it is understood that it is cheaper to protect a river source rather than provide waste treatment for a water supply then the importance of payments for environmental services is fully appreciated. When the world recognizes the economic value of a standing then it is ready for a market for environmental services. 6 Floresta+ Program

The Floresta+ Program is an initiative by the Ministry of the Environment of Brazil designed to create, develop and consolidate a market for environmental services, recognizing and valuing the environmental activities that are carried out and providing monetary and non-monetary incentives in all Brazilian biomes: Amazon, Cerrado, Caatinga, Mata Atlântica, and Pampa. Another highlight of the program is its exclusive focus on the area of native vegetation. We should recognize the good agricultural and livestock practices that lead to important environmental services in the areas under cultivation, generating benefits such as ensuring water supply and soil conservation, the maintenance and absorption of carbon, amongst others.

Payment for Environmental Services

The Payment for Environmental Services consists of a remuneration for individuals or organizations, public or private, either national or international, to environmental service providers, directly or indirectly, in a monetary or non- monetary form.

Environmental Services Benefits Market

Monitoring Water supply Financial Surveillance Carbon credits Consumer goods Fire fighting Technology Research Conservation Oil & Gas Planting native trees Wildlife watching Food & Beverage Agroforestry system Soil protection Farmaceutical Environmental inventory Climate effects Electricity Water treatment

Payment

Conservation Unit Indigenous Lands Area of Permanent Conservation Legal Reserve Surplus from Legal Reserve Area with Restricted Use 7 Environmental Services

Within the Floresta+ Program environmental services are a collection of defined, effective and long-lasting activities, that generate significant environmental benefits, resulting in an improvement, conservation or protection of native vegetation. These diverse environmental services activities include territorial surveillance, protection and monitoring, combat and subsequent restoration of wildfires, soil, biodiversity and water resources conservation, environmental inventories, use of an agroforestry system, reforestation with native trees, natural regeneration and ecological restauration, amongst others. These activities may be undertaken by individuals or legal entities, with public or private control, by family groups or communities, directly or through third parties. When undertaken in an appropriate manner these activities contribute in a significant way to an improvement of benefits generated by nature. The benefits include the maintenance and increase of carbon stocks, preservation of biodiversity, pollination, climate control, the observation of , regulation and availability of water resources, nutrient cycle, fertility and prevention of soil erosion, and appreciation of the natural landscape.

Landholding Categories

The Program extends to all landholding categories: conservation areas, indigenous lands, settlements and private properties (areas of permanent protection, legal land reserves or their surplus entitlements and land with restricted use), with native vegetation cover in all biomes.

Native Vegetation Biomes millions of hectares millions of km2 Amazon 350.6 3.5 Cerrado 106.8 1.1 Caatinga 50.9 0.5 Mata Atlântica 30.9 0.3 Pantanal 12.1 0.1 Pampa 8.7 0.1 Total 560.1 5.6 8 Origin of the Resources

The monetary and non-monetary resources coming from international cooperation or private sector will be fundamental for the consolidation of the Market for environmental services and to reach the scale desired for all the biomes.

Payment Initiatives

The Program will accelerate the initiatives of the Market for environmental services on various fronts:

• The instrument REDD+ (Reduction of Emissions from Deforestation and Forest Degradation, conservation of forest carbon stocks, management of sustainable forestry and an increase in forest carbon stock), recognized by the United Nations Framework Convention on Climate Change (UNFCCC) and sustained by donations calculated on a payment for results basis, is one of the principal forms to capture international resources for the development of national public policies and subnational initiatives to combat deforestation.

• The Voluntary Market for native forests carbon credits, not associated with the UNFCCC, is already a reality in other countries and the Federal Government recognizes it as potentially an important source of resources, principally from private entities, to pay for environmental services.

• Green debentures and impact investing, as seen within the financial sector, have an important role in the development of the market for environmental services.

• The aggregation of ecosystem benefits to products and services offers the consumer the best perception of the value from conserving natural resources, while demonstrating to companies, industries, farmers, agricultural cooperatives and communities that they can produce while protecting the environment.

• Private projects, especially in infrastructure, that pay for environmental services located near to their operations, can generate a positive environmental impact within the areas affected. 9 Regulations

The regulation of the Voluntary Market for Environmental Services will provide the credibility necessary so that the projects will have the legal guarantees and an assurance of the development of their full potential.

Strategic Objectives

In accordance with the Portaria nº 288i, of July 2, 2020, that instituted the National Program of Payments for Environmental Services Floresta+, the strategic objectives are: • Form partnerships with organizations and entities, public or private, national or international, seeking to support projects incorporating payments for environmental services; • Encourage sectorial agreements to generate a demand for environmental services; • Support actions involving international cooperation to promote the awareness and payment of environmental services; • Promote the capture of international resources on a payment for results basis to generate public policies designed to strengthen the market for payments for environmental services; • Support good methodological practices in the verification, validation, certification and monitoring of environmental services; • Promote the registration and integration of details of projects with environmental services; • Encourage the development of digital tools for the payment of environmental services; • Encourage projects with payments for environmental services so as to promote their expansion; • Implement a Pilot Project of payment for environmental services “Floresta+ Amazon” in Brazil’s Legal Amazon region with resources coming from the REDD+ project of results-based payments. 10 Pilot Project Floresta+ Amazon

The Pilot Project Floresta+ Amazon, conceived with the results-based payment system of REDD+, was designed in its form, scope and magnitude of resources that are unprecedented under the modality of payment for environmental services, with resources paid directly to small rural producers and indirectly to communities and indigenous populations. The robust form in which it was created will serve as an instrument to incentivize the Program’s growth, recognition and consolidation of the value of environmental services. In future, the success of the Pilot Project will contribute to full development and territorial reach of the Floresta+ Program and for effective public policies for the conservation of native vegetation, benefiting all of Brazilian society and the world.

Consultations with Interested Parties

The discussions that underpinned the creation of the Floresta+ Program, published on July 3rd of 2020, began in August 2019, after various meetings with the Ministry of the Economy, Ministry of Agriculture, Fisheries and Supply, the National Congress, the States, representatives of Civil Society, Non- Governmental Organizations and the Private Sector.

Desired Projected Results

The Floresta+ Program is planned to consolidate the Market of payments for environmental service, incorporating in an effective manner the participation of the private sector into the forest conservation plan, the protection of biodiversity and the mitigation of effects of climate change. Using the tools of the new green economy it will be possible to provide access to the basic conditions of life and the generation of income for those living in the neediest regions in each of the biomes. It is a real economic alternative to deforestation and it complements activities such as extractivist agroforestry for rural producers, small scale farmers and communities that conserve the native forest. 11 Conclusion

The Floresta+ Program is an initiative of the Ministry of the Environment that expresses the alignment of the Federal Government with the trends, challenges and opportunities in a global context as well as presentand future demands of society and its commitment with sustainable development and the conservation of its native forests. Aware of the relevance of Brazil in this context and the potential of its contribution in the development and consolidation of a new green economy with a global impact, the Brazilian government establishes this initiative, with the objective of developing a business environment for the advance of a market for environmental services.

i Available at: http://www.in.gov.br/en/web/dou/-/portaria-n-288-de-2-de-julho-de-2020-264916875 12