BRAZIL-DEFORESTATION: GREAT CONCERN BUT LITTLE ASSISTANCE,

UNCLAS SECTION 01 OF 03 BRASILIA 001377 SENSITIVE SIPDIS DEPT FOR OES/PCI - L.SPERLING DEPT FOR OES/ENCR - S.CASWELL AND C.KARR-COLQUE DEPT FOR OES/EGC - D.NELSON AND T.TALLEY E.O. 12958: N/A TAGS: SENV EAID KGHG EFIN NO BR SUBJECT: BRAZIL-DEFORESTATION: GREAT CONCERN BUT LITTLE ASSISTANCE, WITH FEW NOTABLE EXCEPTIONS REF: BRASILIA 1159 BRASILIA 00001377 001.2 OF 003 ¶1. (U) THIS CABLE IS SENSITIVE BUT UNCLASSIFIED AND NOT FOR INTERNET DISTRIBUTION. ¶2. (SBU) SUMMARY. At a September 8 meeting, representatives of key European and Asia-Pacific countries outlined their current and planned financial and technical assistance to Brazil to help combat deforestation. All of the participants expressed concern over climate change, which in the case of Brazil means deforestation. Most of the participants said their countries viewed Brazil as a middle-income country that does not require much, if any, financial assistance for dealing with deforestation. Norway stood apart; it has announced plans to provide up to USD 1 billion to help Brazil reduce deforestation through 2015. On a much smaller scale, Germany, the European Commission, France, Japan and the United Kingdom have modest assistance programs or activities concerning deforestation. END SUMMARY ¶3. (SBU) At a luncheon meeting hosted by Post's Deputy Chief of Mission on September 8, representatives of Australia, Canada, Denmark, European Commission, France, Germany, Italy, Japan, the Netherlands, New Zealand, Norway, Spain, Sweden, Switzerland, and the United Kingdom met to exchange information on their respective efforts to assist Brazil in combating deforestation. All of the representatives were keenly interested in the topic of climate change. In the case of Brazil, the vast majority of greenhouse gas emissions are due to deforestation. There was significant interest in the recently established Amazon Fund (REFTEL),which the Government of Brazil (GOB) intends to use to support efforts to reduce deforestation. Highlights of the meeting include the following: NORWAY -------------- ¶4. (SBU) Norway, at the time, was likely to make significant donations to the Amazon Fund as long as they learned more about how it would operate and how the avoided amount of emissions and deforestation reduction would be calculated and verified. (NOTE: During Norwegian Prime Minister Jens Stoltenberg's visit to Brazil, a week later, on September 16, he announced that Norway had made the first donations to the Amazon Fund. An initial USD 20 million deposit plus another USD 120 million within the next 12 months was promised, with additional sums possible as long as Brazil keeps reducing its deforestation rate. Norway also offered to donate a total of up to USD 1 billion by 2015. Brazilian Minister of Environment Carlos Minc announced that disbursals from the Amazon Fund will be tied to the amount of deforestation that is avoided. Thus, a decline in the deforestation rate would permit more money to be disbursed, but an increase would reduce the amount available for disbursal. END NOTE) EUROPEAN COMMISSION (EC) -------------- ¶5. (SBU) A Memorandum of Understanding (MOU) is in effect between GOB and the EC and climate change is one of the areas of cooperation included in the MOU. Currently, there are five ongoing projects in the Amazon region involving total grants of around 30 million Euros. These projects are implemented through non-governmental organizations (NGOs). Moreover, the EC has funding available (approximately 18.3 Euros) for new projects in the areas of protected areas, monitoring of forests, and climate change. (NOTE: Six million Euros will be used for a project to protect the area alongside north-south highway BR-163 which runs through the Amazon Forest. END NOTE.) UNITED KINGDOM -------------- ¶6. (SBU) The United Kingdom has a variety of projects with funding of an estimated 1 million pounds, which are implemented through NGOs. These projects focus on forest fire, law enforcement, and compliance with the law requiring landowners in the Amazon to preserve 80 percent of their land as forests. Also, the United Kingdom is preparing a report called the "Economics of Climate Change in Brazil," which are projections of the impact of climate change over for the next 40 years. A first draft should be available in June of 2009. Further, the United Kingdom is working BRASILIA 00001377 002.2 OF 003 with the Brazilian Space Research Institute (INPE) on a satellite to be launched in 2010 with a high definition camera developed by the UK for better monitoring deforestation. GERMANY -------------- ¶7. (SBU) Germany through its assistance agency, KFW, has contributed 360 million Euros on sustainable forestry activities, protection of indigenous reservations, and land use planning and regulation. Germany is active with projects in the Amazon and also in the Atlantic Forest regions of Brazil. Germany sees the new Amazon Fund as an interesting mechanism, but wants to learn more about it before deciding to make a contribution. Germany is about to launch a research initiative in the Amazon, including construction of very tall towers to monitor release and absorption of gases in the rainforest. FRANCE -------------- ¶8. (SBU) France said it contributed to environmental matters in Brazil through the Global Environmental Fund (GEF),and its development agency had provided modest assistance. It has a small grant of about 1.5 million Euros, which it is implementing through NGOs, for projects near the Brazilian-French Guiana border. Also, France provides Brazil with access to information from the SPOT satellite. JAPAN -------------- ¶9. (SBU) Japan has various small environmental projects in various states within Brazil that range from environmental educational programs to technical cooperation on Amazon Forest monitoring using images captured by Japanese satellites systems. Brazil has 24 Clean Development Mechanism (CDM) projects approved by the Japanese Government and seven projects totaling USD 2.37 million that provide financial assistance through the International Tropical Timber Organization (ITTO). The Japanese representative emphasized that the three main fields of cooperation are: Amazon Forest conservation; preservation of other ecosystems besides the Amazon; and environment improvement in urban cities. They are also interested in learning more about the Amazon Fund mechanism. CANADA -------------- ¶10. (SBU) Canada and Brazil have signed an agreement on sustainable forest management. Canada will provide some modest funding to implement the agreement. ITALY -------------- ¶11. (SBU) Italy has an ongoing cooperation with the Brazilian environmental agency of combating forest fire in the Amazon region. It also plans to provide collaboration on the environment pursuant to a new science and research agreement. The Italian have a program of collaboration with Brazil on fire prevention and combat at State and Federal levels that is comprehensive and well-regarded. OTHER COUNTRIES -------------- ¶12. (SBU) With Brazil's improving economic situation it is generally viewed as becoming a middle-income country. Thus, Sweden, Denmark, the Netherlands, and Spain have terminated or are ending their financial assistance to Brazil and shifting their financial assistance to poorer, needier countries. Nonetheless, Sweden and Denmark are studying the Amazon Fund with a view of possibly making contributions in the future. Australia and New Zealand have been more focused on the Pacific and have not had any significant programs concerning deforestation in Brazil. COMMENT -------------- ¶13. (SBU) The intense interest in climate change and deforestation has not translated into large assistance programs for Brazil. The BRASILIA 00001377 003.2 OF 003 one notable exception is Norway with its decision to finance the Amazon Fund to the tune of about USD one billion over the next seven years. The developed countries do have a number of small or modest programs. Interestingly, these programs are almost universally implemented through NGOs. Further, many developed countries have already "graduated" Brazil from their assistance programs and shifted their focus to poorer countries. Given Brazil's opposition to including forests in carbon credit programs, it appears that Brazil will need to look primarily to its own resources - rather than international funds - to finance its efforts to control deforestation. SOBEL