Evaluation and economic modeling of forest restoration in the State of Pará, eastern Brazilian Amazon Daniel Silva Sâmia Nunes Support: Execution: January 2017 1 Authors: Daniel Silva (Terra Nativa) Sâmia Nunes (Imazon) Collaboration: Renato Crouzeilles Felipe Barros Technical Revision: Rubens Benini (TNC) Sérgio Margulis Editorial Revision: Glaucia Barreto ([email protected]) Translation Free Talk Idiomas e Tradução S586 Silva, Daniel Portuguese title: Avaliação e modelagem econômica da restauração florestal no Estado do Pará / Daniel Silva, Sâmia Nunes. – Belém, PA: Imazon, 2017. 92p., 21,5x28 cm ISBN: 978-85-86212-87-1 1. Forest resource. 2. Reforestation. 3. Forest protection. 4. Economic analysis. 5. Conservation Units - Pará. 6. Public policies - Amazônia. 7. Restoration Opportunity Assessment Methodology (ROAM). I. Nunes, Sâmia. II. Title. CDD 333.75153098115 The data and opinions expressed in this work are entirely the responsibility of the authors and do not necessarily reflect the opinion of the financial sponsors of this study Trav. Dom Romualdo de Seixas No. 1.698, Edifício Zion Business, 11º andar • Bairro Umarizal - CEP: 66.055-200 Belém - Pará - Brasil www.imazon.org.br 2 DATA SHEET “Evaluation and economic modeling of forest restoration in the State of Pará, eastern Brazilian Amazon” is a report produced by Terra Nativa under contract to its collaborating authors Imazon (Amazon Institute of People and the Environment) and incorporates research from specialized literature, personal interviews and independent technical analysis, extensively reviewed by specialists in the economics of environmental restoration. To evaluate forest landscape restoration, we utilized the Restoration Opportunities Assessment Methodology (ROAM) (IUCN & WRI, 2014), which features “Restoration Economic Modelling and Valuation” as one of its key tools. Coordination and economic analysis: Daniel Silva (Associate consultant, Terra Nativa). Coordination and technical support: Sâmia Nunes (Researcher, Imazon). Renato Crouzeilles and Felipe Barros (both from CS-Rio/PUC) provided technical support for the habitat availability analyses. ABOUT IMAZON Imazon is a research institute whose mission is to promote sustainable development in the Amazon thorough studies, support for the establishment of public policies, broad dissemination of information, and professional training. The institute is a non-profit association licensed by the Brazilian Ministry of Justice as a Civil Society Public Interest Organization (Oscip in Portuguese). Imazon, founded in 1990, has its headquarters in Belém, Pará. During 22 years, it has published over 400 scientific and technical papers. Of these works, 163 correspond to articles published in international scientific journals or feature as book chapters. In addition, 43 books, 17 brochures and more than 175 technical reports and strategic documents for public policies have also been published. Website: www.imazon.org.br ABOUT TERRA NATIVA Established in 2004 and currently located in the city of Guaxupé (MG), TERRA NATIVA AGRO-ENVIRONMENTAL MANAGEMENT is an agronomic consulting company focuses on economic evaluation and training to integrate agribusiness and environmental management, with social responsibility. The company operates throughout Brazil and has experience in the preparation of Business Models, production processes and products, economic and socio-environmental indicators for agribusiness. Acknowledgements: World Resources Institute – WRI, for the financial support; Prof. Dr. Ricardo Rodrigues, at the Luiz de Queiroz College of Agriculture University of São Paulo (Esalq/USP), for discussions and guidance in recent years; Amata S.A, for providing information; and Prof. Dr. Luiz Varela, University of Amazônia (Unama), for providing information. 3 INDEX EXECUTIVE SUMMARY ........................................................................................................... 7 1. INTRODUCTION ............................................................................................................. 10 1.1. What is ROAM? ....................................................................................................... 11 2. METHODOLOGICAL CONSIDERATIONS ...................................................................... 13 2.1. Study Area ............................................................................................................... 13 2.2. Estimated area for restoration .................................................................................. 14 2.3. Estimated cost of transport ...................................................................................... 14 2.4. Cost-benefit analysis................................................................................................ 15 2.4.1. Technical-financial indicators and risk calculation ............................................. 16 2.5. Assessment of land opportunity costs ...................................................................... 17 2.5.1. Estimate of weighted net revenue from agricultural and livestock activities ....... 18 2.5.2. Definition of the land prices .............................................................................. 19 2.5.3. Classification of land use and land cover in the areas of forest deficit .............. 20 2.6. Estimate of Agroforestry Systems (AFS) Revenue ................................................... 21 2.7. Analysis of habitat availability ................................................................................... 21 2.7.1. Definition of the sample design ......................................................................... 21 2.7.2. Estimate of habitat availability .......................................................................... 22 3. RESULTS ....................................................................................................................... 23 3.1. Costs of restoration .................................................................................................. 23 3.1.1. Implementation cost under various conditions and scenarios ............................ 23 3.1.2. Transport Costs ............................................................................................... 25 3.1.3. Legal Reserve restoration costs on registered property .................................... 26 3.1.4. APP restoration costs throughout the entire state ............................................. 28 3.2. Opportunity costs of land ......................................................................................... 31 3.3. Financial benefits of restoration................................................................................ 34 3.3.1. Potential revenue from carbon sequestration in LR ........................................... 34 3.3.2. Potential revenue from carbon sequestration in APP ........................................ 36 3.3.3. Potential revenue from logging in the Legal Reserve ........................................ 38 3.3.4. Potential revenue from Agroforestry Systems (AFS) ......................................... 44 3.4. Habitat availability .................................................................................................... 45 4. SUMMARY OF COSTS AND BENEFITS ......................................................................... 49 5. RECOMMENDATIONS ................................................................................................... 51 5.1. Recommendations for the restoration supply chain .................................................. 51 5.2. Recommendations for policies that affect restoration ................................................ 51 BIBLIOGRAPHIC REFERENCES ........................................................................................... 53 Appendix I. Detailing the costs of restoration ........................................................................... 58 Appendix II. Land prices in the Pará municipalities in 2014 ...................................................... 60 Appendix III. Estimation of minimum and maximum APP restoration and restoration costs in various scenarios, by municipality ........................................................................................... 63 Appendix IV. Carbon sequestration and potential net revenue (in present value) from carbon sequestration .......................................................................................................................... 66 Appendix V. Indicator of habitat availability according to the scenarios (current situation and restoration of APP), species with different dispersion capacities (100, 1000 and 3000 m), by municipality in the state of Pará. .............................................................................................. 68 Appendix VI. Gain in habitat availability for each BRL 1 million spent on restoration (cost- effectiveness), for the various Planaveg restoration scenarios, by municipality ........................ 70 4 List of Figures Figure 1. State of Pará (study area), with roads, rivers and Protected Areas (Indigenous Land, Conservation Unit and Military Area) ....................................................................................... 13 Figure 2. Map of transport costs for seedlings from the main nursery sites mapped by Ipea.. 26 Figure 3. Expenses flow for restoration of the Legal Reserve on properties registered in the Rural Environmental Registry for Pará, over 22 years, for various