Pristine Forest Is Finite Resource
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SUSTAINABLE BUSINESS Amazonia FINANCIAL TIMES SPECIAL REPORT | Tuesday November 29 2011 www.ft.com/amazonia2011 | twitter.com/ftreports Inside this issue Manaus The city should develop its transport links Pristine forest is finite resource and not just rely on tax breaks Page 2 Attaching a value to the Hydroelectric power environment may help Brazil is building lots of dams but several are meeting with popular avoid damaging protest Page 2 developments, writes Venezuela Developing the rainforest John Paul Rathbone is not on the agenda Page 2 Q&A Interview with our months ago, drug traffick- Izabella Teixeira, ers armed with machine guns Brazil’s current seem to have over-run one of environment the world’s last uncontacted minister, and Ftribes. All that was left from their Marina Silva, a encounter in a remote jungle clearing former one Page 3 near the Peru-Brazil border was a 20kg packet of cocaine and a rucksack Guest column Philip Fearnside with a broken arrow inside. examines the threats to the biome Few scenes provide more eloquent Page 3 evidence of what Claude Lévi-Strauss, the French anthropologist, wrote on Harnessing the forest Private his first trip to the Amazon half a initiatives are using the jungle as century ago: “The first thing we see both a market and a source of raw as we travel around the world is our materials Page 3 own filth, thrown into the face of mankind.” The Amazon is mind-bogglingly More on FT.com A Colombian shaman speaks to huge – but also vulnerable. The basin drains an area the size of two Indias Britain’s House of Lords about the or 10 times that of Texas. An esti- perils facing his rainforest home mated 8,000bn tonnes of water evapo- www.ft.com/amazonia2011 rate from its forests every year. The Amazon discharges more water than the world’s next seven biggest rivers combined. Sustainable business in the Amazon The region, 60 per cent of which lies therefore need not be an oxymoron. in Brazil, is also home to roughly 30m Vale has committed to protecting 1.2m settlers and has already lost a fifth of hectares of primary rainforest around its tree cover. Yet much of the rainfor- its mines. Royal Dutch Shell has pio- est retains the freshness of “the last neered extended-reach oil drilling, unwritten page of Genesis”, as which reduces environmental impact Euclides da Cunha, the Brazilian jour- by using fewer rigs. nalist and geographer, wrote a cen- All this chimes with the rising envi- tury ago. ronmental awareness of South Amer- However, that sense of pristine new- ica’s new middle classes. ness is a deceptive residual of the However, the problem is not the for- area’s immensity. It may also be fleet- mal capitalism practised by multina- ing. First, there is the grave threat of tional companies, or by large farmers global warming, which has led to whose operations can be monitored by increasing numbers of droughts and satellite. forest fires. And, second, there is the Rather, it lies where the rule of law economic boon that the Amazon does not reach – which is much of the promises. Farming in the Amazon: the soya grown in Brazil’s Mato Grosso state supplies much of the world’s incremental demand for protein Reuters Amazon – and sometimes this Carajás, owned by Vale, the Brazil- includes governments themselves. ian mining company, is the biggest upstream from the Atlantic, the river As most deforestation takes place The reason for this change of heart forest’s stock of carbon is perhaps as In Brazil, Bolivia and Peru, indige- iron ore mine in the world. TNK-BP, is still deep enough and broad enough within 80km of a road, the environ- is that Brazil now sees itself as both much as $3,000bn. nous peoples have won the right of the Anglo-Russian oil group, and Eco- to take ocean-going vessels laden with mental impact of these projects is an economic and a biological world The cost of replacing such “forest consultation on large infrastructure petrol, the Colombian state-owned oil commodities and other goods. potentially devastating. Yet they do power. Already a big food producer, it services” is huge – five times the size projects. But Evo Morales, Bolivia’s company, are both prospecting for Brazil, meanwhile, is planning a not necessarily mean the Amazon is aims to become the world’s largest of Italy’s bond market. Halting defor- president, only suspended road con- crude here. Meanwhile, the soya series of trans-Amazonian canals, rail- doomed. food exporter by 2025, overtaking the estation is arguably the cheapest way struction through a national park grown in Brazil’s Mato Grosso state ways and roads that will span the Not long ago, the government urged US. Sustainability is central to this to cut global carbon emissions. after protesters almost toppled his supplies much of the world’s incre- Andes and link its food and mineral- Brazilians to settle in the Amazon, vision. Reducing Emissions from Deforesta- government. Similarly, a lack of due mental demand for protein, either as producing regions directly to Asian and provided them with cheap credit It may not be a pipe dream. Over tion and Forest Degradation (REDD), consultation over the Belo Monte dam vegetable oil or cattle feed. markets. the past 20 years, Brazilian grain pro- a carbon trading scheme, is a global has held up the project in the The Amazon is long familiar with The Interoceanic highway to Peru, duction has increased by 150 per cent, initiative to persuade tropical coun- Supreme Court, for now. such economic booms. A century ago, built by Odebrecht, a Brazilian con- The region has roughly using only 25 per cent more land. tries to do that. BSkyB, the UK satel- Most often, though, the biggest rubber wealth turned Manaus into struction company, and largely 30m settlers, yet retains Some 40 per cent of the forest has lite broadcaster, is one western group threat comes from the informal econ- such a hotbed of conspicuous con- financed by BNDES, Brazil’s develop- already been set aside as national with pilot schemes in Brazil. omy. Illegal loggers, and the small sumption that its inhabitants built an ment bank, was completed this year. the freshness of ‘the last parks. Dilma Rousseff, the president, Better links to international com- farmers that follow them, remain the opera house to rival La Scala in There are domestic projects too, unwritten page of Genesis’ has even said she may veto a revision modity markets are also playing a largest cause of deforestation in Bra- Milan. Money almost literally grew on such as the Belo Monte hydroelectric of the country’s forest code that farm- role. Big agricultural trading and zil. In Peru, informal miners have trees, until Henry Wickham smuggled dam, a controversial $16bn project ers say is overdue but environmental- food-production companies, such as turned the Madre de Dios region into 70,000 seeds out of Brazil and Britain under construction across the Xingu ists argue speeds up deforestation. New York-listed Bunge, no longer buy the country’s largest gold-producing established rival plantations in Asia. river that would be the world’s third and free land to do so. Today, Brasília Backing the environmental cause certain products that are considered province – and also its most environ- A hundred years later, however, biggest. aims to preserve much of the forest as are economists who are waking up to to threaten the rainforest. mentally destructive. this boom promises to be bigger, more Highways are also being improved, national parks, with sprinklings of the Amazon’s latent bounty. Accord- Some governments have gone the Finally, there is the scourge of drug extensive and more prolonged. including the BR-319, which would industry dotted around it. ing to one United Nations-backed other way. Ecuador has floated a trafficking and cocaine production. The river courses through Colombia better link Manaus – a free-trade zone Agriculture at the edges should also initiative, the Economics of Ecosys- scheme whereby it is paid directly to Rising foreign demand for commodi- and Peru and Brazil, three of the most and Brazil’s largest manufacturer of be more productive than in the past, tems and Biodiversity, the amount of leave Amazonian resources undevel- ties may not see the Amazon go up in dynamic economies on the planet. At electrical goods – with the rest of the through increased yields and by mak- carbon the Amazon captures every oped. Others, such as Venezuela, have smoke, but the forest and its peoples Iquitos in Peru, roughly 3,600km country. ing use of abandoned land. year is worth $13bn. The value of the opted for benign neglect. may go up consumers’ noses instead. Stewardship Farmers help to conserve land Search for right formula When John Carter first attracted ranches, covering 3m hectares. landowners in the Brazilian Its target is 20m ha by 2016. Amazon to Aliança da Terra A former Texas rancher who (land alliance), he was offering moved to Mato Grosso with to exploit native species them the land stewardship his Brazilian wife in 1996, equivalent of a comfort blanket. Mr Carter has shown dogged Now he is offering them determination in getting Aliança He says: “The pharmaceutical switched to the laboratory and economic advantage. to a point from which he Medicinal potential industry says it has nothing in computer instead. “Producers are in a terrible believes it can really take off. its pipeline of new drugs. If nat- “It is very probable there situation,” he says.