GERMANY SEEKS TO EXPAND ITS SUBSTANIAL ASSISTANCE TO BRAZIL

UNCLAS SECTION 01 OF 02 BRASILIA 001565

SENSITIVE

SIPDIS

DEPT FOR OES/ENRC, OES/STC

E.O. 12958: N/A
TAGS: SENV KSCA KGHG BR GM
SUBJECT: GERMANY SEEKS TO EXPAND ITS SUBSTANIAL ASSISTANCE TO BRAZIL
ON CLIMATE CHANGE AND COMBATING DEFORESTATION

REF: A) BRASILIA 1377, B) BRASILIA 1159


1. (U) THIS CABLE IS SENSITIVE BUT UNCLASSIFIED AND NOT FOR
INTERNET DISTRIBUTION.


2. (SBU) SUMMARY. Germany has long been the leading contributor of
financial and technical assistance to Brazil on deforestation and
climate change. It is looking to expand its substantial program of
technical assistance at the national and state levels with
deforestation, and it also plans to increase its financial
assistance with over 100 million Euros on climate change and
renewable energy projects. END SUMMARY.

LONG THE LEADING CONTRIBUTOR


3. (SBU) Germany has long played the leading role in the
international effort on conserving the Amazon forest. It was a
major contributor to the G-7's Pilot Program to Conserve the
Brazilian Rainforest (PPG7),which was created by the Group of 7 in
1992 and is now winding up. According to Dr. Michael Grewe,
Counselor for Technical and Financial Assistance of the German
Embassy in Brasilia, the German assistance agency KFW as of
September 2008 had contributed approximately 360 million Euros on
sustainable forestry activities, protection of indigenous
reservations, and land use planning and regulation. (REFTEL A)
Further, Jen Ochtrop, the German Development Bank's (KfW) Brazil
Director of Programs for the Management of Natural Resources in an
October 14 briefing for Embassy Science Officers outlined ambitious
plans for future financial assistance. At that same briefing, the
Dr. Helmut Eger, the Director of the German Technical Assistance
Agency's (GTZ) Program for the Protection and Sustainable Management
of Tropical Forests, described expanding an already impressive
technical assistance program.


4. (SBU) Germany would still be the leading contributor to Brazil
in this area if Norway had not announced in September a one billion
dollar pledge to the Amazonas Fund (REFTEL B). Germany is still
studying that fund and has not decided whether it will also
contribute or not. During the October meeting, Grewe and Ochtrop
expressed concerns over the lack of controls and transparency


5. (SBU) Germany has established partnerships with the Ministry of
the Environment, FUNAI (the Brazilian Indian Aid Agency),the
Ministry of Agricultural, and the State of Amazonas. GTZ and KfW
efforts focus on reducing deforestation and promoting sustainable
development in the states of Amazonas and Acre. While Germany is
looking to expand its impressive environmental efforts, it is no
longer working with Brazil on projects to combat poverty. Grewe
explained that this is because Germany has determined that Brazil,
now a middle income country, has sufficient economic resources to
carry out such activities on its own.

AMBITIOUS PLANS FOR THE FUTURE


6. (SBU) According to Ochtrop (KfW) and Egger (GTZ),Germany's
priority areas for Brazilian cooperation are: forest conservation
and sustainable use; renewable energy and energy efficiency;
sustainable development of natural resources with a focus on
protected areas; demarcation and protection of indigenous lands; and
land use planning and regional development. Germany is also working
on capacity building with IBAMA (the Brazilian Institute of
Environment and Renewable Natural Resources),the Chico Mendes
Institute (which manages conservation areas),and the Brazilian
Forest Service in the areas of knowledge management and capacity
development. The majority of their capacity development work takes
place in the State of Amazonas.


7. (SBU) Germany is heavily involved in projects with the Amazonas
State Environmental Secretariat as well as other state government
institutions in the states of Amazonas and Acre. Much of this
activity has occurred since July 2008. Germany participates in land
management projects such as the formalizing of land titles and
ownership records. The Germans are looking for ways to support the
introduction of programs for Reducing Emissions for Deforestation
and Forest Degradation (REDD),especially in Amazonas State.

CLIMATE CHANGE


8. (SBU) KfW has started a new climate protection initiative that
originated in the German environmental ministry. The German
government has allocated approximately 400 million Euros for
international climate change projects, which will come from the
auction of emission rights under a carbon trading scheme. Of this
total, 120 million Euros have been set aside for the initial round
of projects, and 20 million Euros are being designated specifically

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for use in Brazil.


9. (SBU) Over the last two years the Germany has spent
approximately 92 million Euros for climate related project. In
regard to clean energy projects, Grewe told Science Officers that
Germany plans to spend about 100 million Euros on wind energy in
Brazil and 89 million Euros on a hydroelectric project. These will
be implemented through the electric utilities Electrosul and
Electrobras.

COMMENT


10. (SBU) Germany shares many of the USG's concerns and interests
regarding deforestation and climate change in Brazil. Germany has
brought substantial financial and technical resources to help
address these problems, and it plans to expand these efforts.
Coordination of USG efforts with Germany and other contributors
could offer opportunities to leverage our limited technical and
financial resources in these critical areas. END COMMENT.

KUBISKE