Resource Mobilization Information Digest No 178 September 2013

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o Resource Mobilization Information Digest N 178 September 2013

Estimating Government Expenditure and Programme Funding in Brazil

Contents

1. Introduction ...... 2

2. Central government spending ...... 2

3. State and municipal spending ...... 2

4. Private sector ...... 3

5. Funding programmes ...... 3

6. Survey on biodiversity projects 1985-1996 ...... 6

1. Introduction Brazil conducted detailed assessments of government spending for biodiversity in its first national report1 and fourth report2 as well as a national submission3. The results are available on central government spending, state/provincial and local/municipal spending, private/markets spending, as well as funding programmes and an earlier survey on biodiversity projects.

2. Central government spending Central Government values were estimated (Brazil 2012) considering of fiscal reports generated by financial and administrative systems (SIAFI and SIGPLAN) from the Ministry of Finance and the Ministry of Planning.

For direct related activities, general budget and personnel payment were considered. For Indirect related activities, only general budget was considered.

Table 1. Central government spending (millions of US$ - US$ 1.00 = R$ 1.76, ref. 2010) Year Directly Related Indirectly Related Total 2006 931.45 172.41 1,103.86 2007 885.85 136.60 1,022.44 2008 741.85 126.61 868.46 2009 814.46 67.37 881.83 2010 905.77 117.96 1,023.74

3. State and municipal spending State and Municipal government budgets were estimated (Brazil 2012) considering global expenditures for all environmental activities – indirect values surpass federal expenditures due in part to urban equipment, pollution control and mitigation managed by these levels of government. Note that a (not yet estimated) part of these resources controlled by state and municipalities have an origin on the federal budget.

1 Brazil (2001). First National Report to the Convention on Biological Diversity, Ministry of the Environment, 2001, 270 pp.

2 Brazil (2010). Fourth National Report to the Convention on Biological Diversity, Office of the National Program for Biodiversity Conservation, Secretariat of Biodiversity and Forests, Ministry of the Environment, COP-10 Special Edition, October 2010, 286 pp.

3 Brazil (2012). Preliminary Reporting Framework, Department of Biodiversity Conservation, Secretariat of Biodiversity and Forests, Ministry of Environment of Brazil, 10 September 2012

Table 2. State and provincial government spending (millions of US$ - US$ 1.00 = R$ 1.76, ref. 2010) Year Directly Related Indirectly Related Total 2006 209.86 839.45 1049.32 2007 201.24 804.95 1,006.19 2008 238.91 955.64 1,194.55 2009 254.44 1017.75 1,272.19 2010 270.97 1083.90 1,354.88

Table 3. Local/municipal government spending (millions of US$ - US$ 1.00 = R$ 1.76, ref. 2010) Year Directly Related Indirectly Related Total 2006 132.03 528.15 660.17 2007 167.97 671.91 839.89 2008 212.24 848.95 1,061.19 2009 250.65 1102.61 1,253.27 2010 296.02 1184.09 1,480.11

4. Private sector Resources allocated from private/market were estimated (Brazil 2012) using reports from The Economic Commission for Latin America –ECLA (2005) – the percentage of environmental expenditures would amount to approximately 1% of industrial GDP per year, during the period of 2000 and 2001. Biodiversity expenditures are expected to be approximately 10% of this 1% of industrial GDP for directly related activities, and the remaining resources accounted for indirectly related activities.

Table 4. Private/market spending (millions of US$ - US$ 1.00 = R$ 1.76, ref. 2010) Year Directly Related Indirectly Related Total 2006 504.48 4,540.39 5044.88 2007 490.51 4,414.63 4,905.14 2008 493.44 4,440.93 4,934.36 2009 467.41 4,206.71 4,674.12 2010 514.69 4,632.20 5,146.89

5. Funding programmes In 2009, the governmental budget allocated R$3,532,621,461 (approximately US$2.08 billion) for federal environmental agencies, only 2% of which from sources other than the national treasury. The Ministry of the Environment and its executing agencies implement this budget through 16 programs in the federal Multi-Year Plan (PPA) and other initiatives not included in the PPA that contribute to the achievement of CBD objectives. Two of these programs are implemented through the Secretariat of Biodiversity and Forests, CBD focal point in Brazil: the Conservation and Sustainable Use of Biodiversity and Genetic Resources Program; and the Conservation, Management and Sustainable Use of Agrobiodiversity Program. In addition to these, several other programs listed in the PPA are implemented by various

ministries and contain actions related to: sustainable rural production with agro-forestry systems; local sustainable development with emphasis on family production and sustainable use of natural resources; biofuels research and production; renewable energy; and territorial ordering and regularization (which assists with contention of deforestation and facilitates vegetation cover monitoring). Table 5 below lists the main federal programs that contribute, in various degrees, to CBD implementation and relates each program to the CBD article(s) to which the program contributes.

Table 5: Main federal programs that contribute to the achievement of CBD goals (2009) Program (no. in the PPA or other initiative) Responsible CBD Article Agency Conservation and Sustainable Use of Biodiversity and Genetic Resources MMA 6, 8 (d, f-h), 9, 10, 12, 15 (0508) Conservation, Management and Sustainable Use of Agrobiodiversity MMA 8(l), 10, 12 (1426) Program to Combat Desertification (1080) MMA 6, 8(d, f, l), 10 Conservation and Recuperation of Brazilian Biomes (1332) MMA 6, 8 (a-f, l), 10, 11 Traditional Communities (1145) MMA 8(j), 10 Environmental Education for Sustainable Societies (0052) MMA 13 National Forests Program (0506) MMA 8 (a-c, f), 10, 12 Deforestation and Fire Prevention and Control – FLORESCER Program MMA 14 (0503) Conservation of Watersheds – PROBACIAS Program (1107) MMA/ANA 6, 11 Revitalization of Vulnerable and Environmentally Degraded Watersheds MMA 8(f), 13, 14 (1305) Sustainable Fisheries Resources (0104) MMA 10, 14 National Ecological-Economic Zoning (0512) MMA 6 Environmental Quality (1346) MMA 6, 14 Urban Solid Waste (8007) MMA 14 Agenda 21 (1102) MMA 6 Management of Environmental Policy Implementation (0511) MMA 6, 18 Management of Water Resources Policy Implementation (0497) MMA 6 National Climate Change Plan MMA 6, 12, 13 Brazilian Program to Eliminate the Production and Consuming of MMA 6, 13 Substances that Destroy the Ozone Layer National Air Quality Control Program – PRONAR and Program to Control MMA 6, 12, 13 Air Pollution by Vehicles – PROCONVE Urban Environmental Management in Environmentally Vulnerable Areas MMA/MCT 6, 11, 13 National Program for Underground Waters MMA 6, 7, 13, 14 Sustainable Amazon Program – PAS MMA 6, 8, 10, 13, 14 Action Plan to Prevent and Control Deforestation in the Amazon – MMA 6, 7, 10, 13, 14 PPCDAM Amazon Protected Areas Program – ARPA MMA 8, 13 Ecological Corridors Project MMA 8, 9, 13 National Plan to Promote Socio-biodiversity Production Chains MMA/MDA 6, 8, 10, 12, 13, 15, 19 /MDS Other Governmental Programs that partially contribute to CBD implementation Program (no. in the PPA or other initiative) Responsible CBD Article

Agency Science, Technology and Innovation Applied to Natural Resources (1122) MCT 6, 7, 12, 17, 19 Science, Technology and Innovation for the Industrial, Technological and MCT 12, 16, 19 Export Trade Policies (PITCE) (1388) Meteorology and Climate Change (1421) MCT 12, 14 Promotion of Research and the Scientific and Technological Development MCT 6, 7, 10, 11, 12, 13, 14, 15, 16, (0461) 17, 18, 19, 20 Agro-energy Development (1409) MAPA 6, 10, 11, 17, 18 Sustainable Development of Agribusiness (1442) MAPA 6, 10, 13, 16 Sustainable Development of the Cocoa Production Regions (0362) MAPA 6, 10, 13, 16 Sanitary Safety in Agriculture and Livestock (0357) MAPA 6, 13, 14 Research and Development for Agribusiness Competitiveness and MAPA 6, 11, 12, 14, 15, 16 Sustainability Agriculture and Livestock Plan 2009-2010 MAPA 6, 13, 14, 16, 21 Integrated Production Program: PIF and SAPI MAPA 6, 14, 16 Proantar (0472) MD 6, 7, 12, 14, 17, 18, 22 Marine Resources (0474) MD 6, 7, 10, 11, 12, 14 Integrated and Sustainable Development of the Semi-Arid Region MI 10 (CONVIVER – “coexist”) (1047) Sustainable Development of Settlement Projects MDA 10 Sustainable Development of Rural Territories (1334) MDA 6, 10 Sustainable Development of Agribusiness MDA 10 Family Agriculture – PRONAF (0351) MDA 6, 10, 11, 14, 16, 21 Technical Assistance and Rural Extension in Family Agriculture (1427) MDA 6, 11, 12, 13, 14 Sustainable Development of Fisheries (1342) MPA 6, 10, 13 Sustainable Development of Aquaculture (1343) MPA 6, 10, 13 National Program for Medicinal Plants and Phytotherapics MS 6, 10, 12, 13, 19 Renewable Alternative Energy (1044) MME 6 Mining and Sustainable Development (0391) MME 6, 14 Energy Efficiency (1046) MME 6, 13 Biodiesel MME 6, 10, 12 National ProÁgua (“ProWater”) ANA 6 GEF Amazonas ANA 6, 10, 13 National Underground Waters Agenda ANA 6, 7, 12 PRODES – Program to De-pollute Watersheds ANA 6, 11, 20 Water Producer ANA 6, 10, 11, 13, 20 National Program to Assess Water Quality ANA 6, 7, 12 Water Resources Plan ANA 6, 10, 13 Cultural Identity and Diversity –Plural Brazil (1355) MinC 8(j) and related provisions Indigenous Peoples Protection and Promotion MJ 8(j) and related provisions Quilombola Brazil (1336) SEPPIR 8(j) and related provisions Source: Federal Multi-Year Plan 2008-2011 – http://www.sigplan.gov.br

Abbreviations: MMA = Ministry of the Environment; ANA = National Water Agency; MDS = Ministry of Social Development; MCT = Ministry of Science and Technology; MAPA = Ministry of Agriculture Livestock and Provision; MD = Ministry of Defense; MI = Ministry of National Integration; MDA = Ministry of Agrarian Development; MPA = Ministry of Fisheries and Aquaculture; MS = Ministry of Health;

MinC = Ministry of Culture; MME = Ministry of Mines and Energy; MJ = Ministry of Justice; SEPPIR = Special Secretariat of Racial Equality Promotion Policies.

6. Survey on biodiversity projects 1985-1996 A survey of biodiversity funding mechanisms and experiments (Brazil 2001) was carried out in 1996 by the Ministry of Environment, in collaboration with the NGO Institute Society, Population and Nature (Instituto Sociedade, População e Natureza - ISPN). The survey facilitated the consolidation of a proposal for a system of storing information on biodiversity projects in the form of a data bank.

The first phase consisted of a survey and analysis of the information from the principal financing or supporting agencies. Information was also collected from official government institutions and bilateral and multilateral financing agencies.

The projects included in the survey were those concerned with research, management, conservation, sustainable use and the recovery of biological diversity. The areas covered included Conservation Biology, in situ and ex situ conservation, Biotechnology, Botany, Zoology, Animal and Plant Genetics, Animal and Plant Morphology, Animal and Plant Systematics, Zootechnology, inventories and surveys of living organisms, Physiology, Biochemistry, Microbiology, Ecology, Ethnobotany, Ethnopharmacology, Phytopathology and the sustainable use of plants and wildlife.

It proved possible to systematize information relating to the financing of biodiversity projects for 27 of the 40 funding sources for environmental projects in Brazil (Table 6).

Table 6. Amounts of biodiversity projects financed during 1985-1996 Financing institution No. of projects Average amount/project (US$) Total value (US$) Government organizations – foreign 37 1,997,899 73,922,269 Government organizations - national* 430 44,267 19,034,701 International organizations 29 653,475 18,950,764 State foundations 1,579 9,038 14,270,973 Nongovernmental organizations 418 21,347 8,922,948 Total 2,493 54,192 135,101,655 * Data from CNPq, CAPES & EMBRAPA are not included.

Source: Instituto Sociedade, População e Natureza (ISPN). Levantamento e Caracterização de Projetos de biodiversidade no Brasil: Relatório Final de Pesquisa - Fase I e Fase II, Brasília, 1996.

These were divided into five categories:

• State foundations for the support of research (5);

• Federal Government institutions: foundations,

 financing foundations, state banks (6);

• Nongovernmental organizations and foundations (4);

• Governments of other countries (8);

• International financing organizations (4).

The state research support foundations invest principally in scientific and technological research projects of interests to the development of the state where they are located, with resources from the state budget. The beneficiaries are generally researchers in higher education and research institutions. Assistance normally takes the form of scholarships, assistance for participation in scientific events, and support for basic and applied research.

From 1985 to 96, the five state foundations surveyed financed 1,615 projects which involved some aspect of biodiversity research, totaling US$ 14,270,973. The average grant per project was US$ 9,000, varying somewhat the different foundations. The São Paulo State Science Research Foundation (Fundação de Amparo à Pesquisa do Estado de São Paulo - FAPESP) accounted for 64% of the resources in this category, and 87% of the projects. Of the projects supported by this foundation, 16% were carried out in other states.

The category of Federal Government institutions and organizations grouped together funds, foundations, financing agencies, superintendencies and state banks which financed projects connected with biodiversity. Collectively, they financed 430 projects, to the amount of US$ 19,034,701, with grants averaging US$ 44,267 (Fundo Nacional do Meio Ambiente / National Environment Fund; Financiadora de Estudos e Projetos / Financing Agency for Studies and Projects; Banco da Amazônia / Bank of Amazonia; Banco do Nordeste do Brasil / Bank of the North-east of Brazil; Superintendência de Desenvolvimento da Amazônia / Amazon Development Superintendency; Fundação Banco do Brasil / Bank of Brazil Foundation). These figures do not include three of the biggest federal funding agencies: CNPq, CAPES and EMBRAPA.

Two international NGOs, The World Wide Fund for Nature (WWF) and Conservation International (CI) and two nongovernmental foundations, The Ford Foundation and the Boticário Foundation (Fundação o Boticário de Proteção à Natureza), which finance biodiversity projects, supported 418 projects, totaling US$ 8,922,948, with an average grant of US$ 21,347.

Eight countries (Germany, United Kingdom, the USA, Japan, France, Italy, Spain and Canada) financed 37 projects, totaling US$ 73,922,269. The average grant was US$ 2,000,000. Forty-four per cent of these resources came from Germany, and 27% from the United Kingdom. The other six countries together accounted for 29%. Overseas government policies give priority to a relatively small number of projects, but on a large scale with a long duration. Resources are invested mainly in the Amazon region, and particularly in the protection and conservation of natural resources. There is poor or no co-ordination between the different projects, except in the case of those forming part of the Pilot Program to Conserve the Brazilian Rain Forest (Programa Piloto para a Proteção das Florestas Tropicais do Brasil - PPG-7). Most of the projects financed by overseas governments are carried out by state and federal research institutes and government agencies. The US Agency for International Development (USAID), however, carries out projects in partnership with NGOs, universities and US government agencies. 7

International organizations invested in 29 biodiversity projects totaling US$ 18,950,764 (Interamerican Development Bank (IDB), International Tropical Timber Organisation (ITTO), United Nations Development Programme (UNDP), Small Projects Programme/Global Environment Facility (GEF)). With the exception of the Small Projects Programme (PPP-GEF), which, as its name suggests, generally finances small projects carried out by NGOs and communities, they give priority to large scale projects, generally costing over US$ 1.2 million.

A total of 2,493 projects were supported by the five types of funding agencies (Table 6), with resources totaling US$ 135,101,655.

In general, while national government organizations, state research support foundations and local NGOs give priority to a large number of projects with relatively low-level funding, overseas government agencies and international organizations give priority to a relatively small number of projects with relatively higher costs. While only 2% of the projects were funded with external resources, this corresponded to 70% of the total funding among the 27 sources surveyed.

From 1985 to 1996, the 27 funding sources surveyed supported varying numbers of projects, from one to 1,359, with amounts ranging US$ 32,540 to US$ 268,020. The number of projects financed annually varied from 150 to slightly over 200 between 1985 and 1990. It increased considerably from 1991/1992 onwards to reach 400 in 1995 and a little less than 350 in 1996.

Although the information provided by the funding institutions did not always allow a precise identification of the geographical areas or biomes to which the resources were destined, it was evident that the south-east of Brazil received the largest number of projects (45% of the total), while the north- east and the central-west received the lowest percentage (11% each). Seventeen per cent were in the north.

This unequal distribution of the number of projects per region in part reflects the contributions of the state research funding foundations which vary according the resources available to each. It also reflects the availability of research scientists in each region. The state of São Paulo contributed one-third of the projects financed, having as it does the richest state research support foundation and the most scientists. The five states with the most projects contributed 62% of the total.

The distribution is unequal between the states comprising each region. For example, in the south, 49% of the projects were in Paraná. In the south-east, 72% were in São Paulo. In the central-west, 68% were in the Federal District. Projects are concentrated in the wealthiest areas and with no relation to their importance in terms of biodiversity. States such as Mato Grosso and Roraima, with highly diversified ecosystems of great significance in terms of the country’s biodiversity, contributed with less than 1% of projects.

However, when considering the amount of funding, the larger-scale projects are mainly concentrated in the north, on account of projects related to the Amazon rain forest. In relation to the number of projects funded, the Amazon rain forest, the Cerrado and the Atlantic forest together accounted for 49% of

projects dealing with terrestrial biomes. The biodiversity of aquatic and fluvial, coastal and marine systems accounted for about one-third of the projects financed. The Caatinga (4%) and the Pantanal (wetlands) (2%), both biologically rich biomes, were not given their due.

Analysis of the biodiversity projects by theme during this period demonstrated considerable concentration on just a few areas. Three of these, Ecology, Zoology and Botany, represented 55% of the projects financed, and ten of the principal areas accounted for 86% of the projects. Besides these ten main topics, projects in Agronomy, Biotechnology, Museology, and Animal and Plant Physiology came to between one and 2% of the total. Another 5% went to congresses, seminars and workshops, as well as publications. The remaining 4% went to: Anthropology; Health Sciences; Soil Conservation; Biological Control; Demography; Law, Political Science and Sociology; Sanitary Engineering; Ethnobiology; Pharmacology; Plant Genetics; Phytopathology; Geography; Geology; Informatics; Limnology; Microbiology; Palynology; Fish-farming; Chemistry/Biochemistry; Remote Sensing; and Veterinary Science/Zootechnology.

Public agencies carried out most of the projects. Taken together, public universities, public agencies (state and municipal environmental secretariats) and public research institutions represented 84% of the total. Universities represented 70%, owing principally to the projects funded by FAPESP, 1,233 of which were carried out by universities. Even so, universities received only 5% of the total financing, since each grant was small. NGOs were responsible for 11% of the projects (table 7).

Table 7. Number of biodiversity projects by different agencies Agency Nº of Projects Universities 1,490 NGOs 228 Public agencies 209 Research Institutes 92 Individuals 71 Private companies 12 Others 27 Total 2,129 The distribution of these projects over time shows that from 1991 on there was an increase in the number of projects financed, probably as a consequence of the Conference on Environment and Development (UNCED) held in Rio de Janeiro in 1992, when the Convention on Biological Diversity was ratified. The highest total in terms of disbursement, however, was in 1995.

Although only five agencies gave information on unmet demand, the data indicate that little more than 13% of the projects submitted actually received funding (Table 8). In financial terms, only 3.5% was met (US$ 8.355 million), while 96.5% failed obtain the resources requested (US$ 233.67 million). The average budgets of the proposals not accepted was some 60% higher than that of the projects that were accepted.

Table 8. Demand for biodiversity projects, met and unmet (1992 -1996) by funding source Source Met Unmet Total No. % No. % FACEPE 36 84 7 16 43 FAPERGS 81 19 354 81 435 PPP-GEF 12 7 151 93 163 FUNBIO 10 1 1,073 99 1,083 SUDAM 26 50 26 50 52 WWF 127 12 277 78 404 Total 292 13.4 1,888 86.6 2,180 Fundação de Apoio à Pesquisa do Estado de Pernambuco – FACEPE -Pernambuco State Research Support Foundation; Fundação de Amparo à Pesquisa do Estado do Rio Grande do Sul (FAPERGS) - Rio Grande do Sul State Research Support Foundation; Small Projects Programme/Global Environment Facility (GEF); Fundo Brasileiro para a Biodiversidade (FUNBIO) - Brazilian Fund for Biodiversity; Superintendência de Desenvolvimento da Amazônia (SUDAM) - Superintendency for Amazon Development; World Wildlife Fund / World Wide Fund for Nature (WWF)

One of the problems in this first phase of the research survey was that some funding sources, both public and private, preferred not to disclose the information requested. Importantly, this survey led to a system of storing and organizing information on the funding, distribution and types of biodiversity projects.