Anais da Academia = Brasileira de Ci=EAncias - Amazon Forest maintenance as a source of = environmental services

=20

services

Anais da Academia Brasileira de Ci=EAncias

Print version ISSN 0001-3765

An. Acad. Bras. Ci=EAnc. vol.80 no.1 Rio de=20 Janeiro Mar. 2008

doi: 10.1590/S0001-37652008000100006

BIOLOGICAL = SCIENCES

Amazon Forest = maintenance as a=20 source of environmental services

Philip M. Fearnside

Instituto Nacional de Pesquisas da = Amaz=F4nia (INPA),=20 Caixa Postal 478, 69011-970 Manaus, AM, Brasil

Corre= spondence=20 to

ABSTRACT

Amazonian forest produces environmental = services=20 such as maintenance of biodiversity, water cycling and carbon stocks. = These=20 services have a much greater value to human society than do the timber, = beef and=20 other products that are obtained by destroying the forest. Yet = institutional=20 mechanisms are still lacking to transform the value of the standing = forest into=20 the foundation of an economy based on maintaining rather than destroying = this=20 ecosystem. Forest management for commodities such as timber and = non-timber=20 forest products faces severe limitations and inherent contradictions = unless=20 income is supplemented based on environmenta lservices. Amazon forest is = threatened by deforestation, logging, forest fires and climate change. = Measures=20 to avoid deforestation include repression through command and control, = creation=20 of protected areas, and reformulation of infrastructure decisions and=20 development policies. An economy primarily based on the value of = environmental=20 services is essential for long-term maintenance of the forest. Much = progress has=20 been made in the decades since I first proposed such a transition, but = many=20 issues also remain unresolved. These include theoretical issues = regarding=20 accounting procedures, improved quantification of the services and of = the=20 benefits of different policy options, and effective uses of the funds = generated=20 in ways that maintain both the forest and the human = population.

Key words: Amazonia, avoided = deforestation,=20 Brazil, carbon, deforestation, global warming, Greenhouse effect,=20 rainforest.

RESUMO

A floresta amaz=F4nica produz = servi=E7os ambientais,=20 tais como a manuten=E7=E3o da biodiversidade, da ciclagem de =E1gua e = dos estoques de=20 carbono. Estes servi=E7os t=EAm um valor muito maior para a sociedade = humana do que=20 a madeira, carne bovina e outros produtos que s=E3o obtidos destruindo a = floresta.=20 Mecanismos institucionais ainda est=E3o faltando para transformar o = valor da=20 floresta em p=E9 no alicerce de uma economia baseada em manter, em lugar = de=20 destruir, este ecossistema. Manejo florestal para madeira e para = produtos=20 florestais n=E3o-madeireiros enfrenta limita=E7=F5es severas e = contradi=E7=F5es inerentes=20 a menos que a renda seja completada com base em servi=E7os ambientais. A = floresta=20 amaz=F4nica =E9 amea=E7ada por desmatamento, explora=E7=E3o madeireira, = inc=EAndios=20 florestais e mudan=E7a clim=E1tica. Medidas para evitar o desmatamento = incluem=20 repress=E3o por comando e controle, cria=E7=E3o de =E1reas protegidas, e = reformula=E7=E3o de=20 decis=F5es sobre infra-estrutura e sobre pol=EDticas de desenvolvimento. = Uma=20 economia que =E9 principalmente baseada no valor dos servi=E7os = ambientais =E9=20 essencial para a manuten=E7=E3o a longo prazo da floresta. Muito = progresso foi feito=20 nas d=E9cadas desde que eu propus uma transi=E7=E3o deste tipo, mas = v=E1rios assuntos=20 tamb=E9m permanecem n=E3o resolvidos. Estes incluem assuntos te=F3ricos = relativos aos=20 procedimentos de contabilidade, quantifica=E7=E3o melhorada dos = servi=E7os e dos=20 benef=EDcios de diferentes op=E7=F5es de pol=EDtica, e usos eficazes dos = fundos gerados=20 de modo que mant=EAm tanto a floresta como a popula=E7=E3o = humana.

Palavras-chave: Amaz=F4nia, = aquecimento=20 global, carbono, desmatamento evitado, efeito estufa, floresta tropical. =

INTRODUCTION

AMAZONIAS PRESENT ECONOMY

The present economy of Brazilian = Amazonia is almost=20 entirely based on destroying the forest, either through predatory = logging or=20 deforestation for cattle pasture and, in some parts of the region, for = soybeans.=20 Sustainable activities such as rubber tapping and Brazilnut harvesting = exist,=20 but their relative importance is minimal from the standpoint of = financial flows=20 in today's economy. In addition, the rate at which these uses can = produce=20 products sustainably is limited and often compares unfavorably with = predatory=20 uses, unless, that is, the value of environmental services can be = incorporated=20 into the income stream.

BARRIERS TO FOREST MANAGEMENT FOR = CONVENTIONAL=20 COMMODITIES

Timber

Forest management for timber faces the=20 contradictionbetween the slow growth rates of tropical-forest trees and = the=20 financial logic of investors who, whether explicitly calculated or not, = act on=20 the basis of commercial discount rates that reflect the returns that can = be=20 obtained on competing investments elsewhere in the economy (e.g., = Fearnside=20 1979). Forest-management proponents tend to promise anything when a = proposal is=20 evaluated and licensed, but decades later when the first cycle of = harvesting is=20 complete the inherent contradictions must be faced and resolved if = management is=20 to continue in a sustainable way (Fearnside 2003a). In the first harvest = cycle,=20 large trees are being cut that have grown "for free'' over centuries = prior to=20 the initiation of management. This is inherently more profitable than = subsequent=20 cycles when harvesting approaches an equilibrium after which the manager = only=20 harvests what has grown while the sustainable management operation has = been=20 waiting and investing in the trees. This transition represents a = discontinuity=20 with a risk of the land owner or manager abandoning the management plan = in favor=20 of either a predatory harvest or outright deforestation.

Forest management has additional = impediments to=20 sustainability when the managers are small or medium in size - a problem = for=20 which both environmental and social implications are negative. A large = firm can,=20 if it chooses, foresee the end of a resource it is exploiting = unsustainably and=20 prepare a transition to some other resource. A few of the major oil = companies,=20 for example, are beginning to reposition themselves as energy suppliers = in a=20 general sense and are looking for ways to shift their investments to = sources=20 other than oil. By contrast, Amazonian sawmill owners (who are usually=20 relatively small-scale Brazilian entrepreneurs, not large multinational=20 corporations) are not likely to switch to something else before the = resource=20 they are exploiting comes to an end. In fact, many have passed through a = sequence of moves, destroying the forest resource first in the = Atlantic-forest=20 states of Espirito Santo or Paran=E1, then Amazonian forest in northern = Mato=20 Grosso and now in either southern Par=E1 or in Rond=F4nia. Within these = Amazonian=20 states, logging operations have often made a succession of moves from = one=20 frontier to the next. This gives reason to doubt the expectation that = these=20 sawmill operators will become converted to sustainable forest = management, taking=20 only the relatively modest harvests that can be cut without jeopardizing = the=20 system's sustainability.

Non-timber forest = products

In the case of non-timber forest = products (NTFPs),=20 such as rubber and Brazil nuts, problems include inherent disadvantages = of=20 extractive systems as compared to plantations and the limits imposed by = market=20 saturation for many products if exploitation were scaled up to the areas = available for management in Amazonia. Additionally, more prosaic = temptations are=20 ever present to increase the intensity of harvesting beyond sustainable = limits,=20 to increase the population beyond what can be supported by the resources = at=20 hand, and to increase areas of clearing for agriculture and pasture = within the=20 extractive areas, obviously at the expense of forest.

PROPOSAL FOR ENVIRONMENTAL = SERVICES

This author first proposed = environmental services=20 in 1985 as an adjunct to otherwise-unattractive plans for managing = forest for=20 timber (Fearnside 1985, 1989a) and non-timber forest products (Fearnside = 1989b).=20 Environmental services were grouped into three categories: biodiversity=20 (Fearnside 1999a), water (Fearnside 2004), and avoiding global warming=20 (Fearnside 1997a, 2000a, b). The hallmark of the proposal was its aim of = tapping=20 willingness to pay, as opposed to valuation of replacement costs or = other=20 indicators that serve as general illustrations of the fact that human = societies=20 depend on natural ecosystems. One should note the difference with the = concept of=20 "ecosystem services'' (Costanza et al. 1997, 1998, Mooney and Ehrlich = 1997,=20 Pimentel et al. 1997, Daily et al. 2000), which was widely discussed at = about=20 the same time. The original ecosystem-services concept was a heuristic = device,=20 for example calculating a global total value of ecosystem services = including=20 polination by insects and provision of scenic beauty at US$33 trillion, = but no=20 intention of such a sum ever being collected by service providers = (Costanza et=20 al. 1997). Discussion of ecosystem services has since evolved to focus = on=20 "payments for ecosystem services'' (also "Payments for Environmental = Services'')=20 (PES) programs where governments (usually local or national) pay = landholders a=20 stipend for such services as watershed maintenance. A wide variety of = studies=20 and conservation projects have derived from this. Most PES programs, = such as=20 those in Costa Rica and Mexico, reward watershed functions, but some = also=20 include carbon (Grieg-Gran et al. 2005, Karaousakis 2007).

During the Eco-92 or "Earth Summit'' in = Rio de=20 Janeiro in 1992 my proposal for monetary flows based on environmental = services=20 evolved into a broader plan to shift the basis of the economy that = supports=20 Amazonia's rural population, replacing the current destructive pattern=20 (Fearnside 1997b). International negotiations have progressed the = farthest in=20 the case of compensating the forest's role in avoiding global warming, = but the=20 other services are no less important. In fact, it is the co-benefits of=20 maintaining biodiversity and water, in addition to indigenous peoples = and other=20 traditional human inhabitants of the forest, which most clearly sets = Amazonian=20 conservation apart from other greenhouse mitigation options such as = planting=20 Eucalyptus (e.g., Fearnside 1999b). Geopolitical concerns = resulted in the=20 avoidance of tropical deforestation being excluded from receiving carbon = credit=20 in the period through 2012, but important parts of these concerns do not = apply=20 to negotiations currently underway for the period from 2013 = onwards,making=20 inclusion of this environmental service likely (Fearnside 2001a, 2006a). =

AVOIDING GLOBAL WARMING AS AN = ENVIRONMENTAL=20 SERVICE

Half of the dry weight of the trees is = carbon, and=20 this, together with part of the carbon in the soil under the forest, is = released=20 as carbon dioxide (CO₂) or as methane (CH₄) when = the=20 forest is cleared. Only a relatively small amount is recaptured by the = pasture=20 and secondary forests that subsequently occupy the landscape. Amazonia = as a=20 whole, including all countries and forest carbon stocks (not only = above-ground=20 live biomass, but also the roots, dead trees and soil stocks) has around = 100 Gt=20 (gigatons =3D billion tons) of carbon that could be released (e.g., = Fearnside=20 2000a). If this enters the atmosphere it would result in a very = substantial=20 increase in atmospheric CO₂ concentration and global = temperatures.=20 Since many global climate models do not include this emission, these = increases=20 would be in addition to the already catastrophic increases indicated by = the=20 models as a result of fossil-fuel emissions under the A2 (=3D = business-as-usual)=20 scenario of the Intergovernmental Panel on Climate Change (IPCC). This = is the=20 multi-model average of 4^=B0C increase by 2100 over = pre-industrial=20 temperatures indicated by the IPCC's Fourth Assessment Report (IPCC = 2007). It=20 should also be noted that global mean temperature is dominated by = temperatures=20 over the oceans that occupy most of the Earth's surface, and average=20 temperatures over the continents would be about 30% higher than the = global mean.=20 In the case of Amazonia the possibility of a "permanent El Ni=F1o'' = being=20 established could mean even higher temperatures (Cox et al. 2004). In = addition,=20 the model runs used to generate the IPCC estimates (i.e., = 4^=B0C mean=20 global increase by 2100) do not include warming from the emissions = released by=20 biosphere feedbacks, especially the large release of carbon that would = occur if=20 the Amazon forest succumbs to climate change. If included, biosphere = feedbacks=20 increase the predicted temperature in 2100 by 38% (Cox et al. 2004, p. = 138).=20

If the possibility is taken into = account of the=20 global climate reacting to increased atmospheric CO₂ more = sharply=20 than the increase corresponding to a 50% probability (i.e., under "high = climate=20 sensitivity,'' or a degree of security corresponding to a 95% = probability), then=20 the temperature could shoot up to much higher levels in Amazonia (e.g.,=20 Stainforth et al. 2005). The precautionary principle would indicate that = these=20 higher potential temperature increases should be considered in policy = making,=20 underscoring the importance of immediate actions to reduce global = emissions of=20 greenhouse gases, including those from Amazonian deforestation. A recent = reanalysis of climatic sensitivity based on paleoclimatic evidence = revised the=20 estimate of ''high climate sensitivity,'' or the point where there is = 95%=20 certainty that the true climate sensitivity is included, reducing it = from 9.7 to=20 6.2^=B0C (Hegerl et al. 2006).

Amazonia's stock of carbon could enter = the=20 atmosphere in two ways:

1) emissions from deliberate = destruction of the=20 forest by deforestation and by degradation through logging, and =

2) emissions that are not made = deliberately, as=20 where forest is degraded due to climate change and by forest fires.=20

In the case of deliberate emission = through=20 deforestation, protected areas can have both short- and long-term = effects. On=20 the short term, creation of a reserve can cause a dramatic reduction in = clearing=20 by grileiros (large illegal claimants who occupy public land and = obtain=20 titles through fraud and corruption). The existence of a reserve greatly = reduces=20 the chance of grileiros or other invaders eventually gaining = legal title,=20 and therefore reduces the motive for clearing. Some of this activity can = simply=20 move to other locations (an effect known as "leakage'' in the carbon=20 literature), but some of the reduction is a net gain. Reserves have a = measurable=20 effect in decreasing deforestation (Ferreira et al. 2005, Nepstad et al. = 2006).=20 In addition, the placement of reserves can act as a barrier inhibiting = the=20 advance of deforestation into areas beyond the reserve itself (Fearnside = 2003a).=20

Degradation from climate change and = fire can affect=20 the entire forest, including that within protected areas. In addition to = their=20 role in slowing global warming by avoiding carbon emissions, reserves = contribute=20 to reducing degradation by maintaining the water-cycling functions of = the=20 forest. Because much of the rainfall in Amazonia is water that has been = recycled=20 through the forest, especially in the critically important dry season, = keeping=20 substantial blocks of forest in reserves maintains the climatic = conditions=20 needed to maintain forest in the remainder of the region (D'Almeida et = al. 2007,=20 Foley et al. 2007, Sampaio et al. 2007). Predominant winds in Amazonia = blow from=20 east to west, meaning that forests lying to the west of reserves are the = ones=20 that benefit from the evapotranspiration of the trees in the reserve. = Reserves=20 in eastern Amazonia would have the greatest benefit for maintaining = rainfall=20 within the Amazon region, while reserves in western Amazonia would have = the most=20 direct benefit in maintaining water-vapor transport to S=E3o Paulo and = other parts=20 of south-central Brazil (Fearnside 2004).

THREATS TO AMAZONIAN = FOREST

DEFORESTATION

Amazonia's forests face serious = threats, and the=20 tendency is for many of them to increase in the future (Fearnside = 2005a). Direct=20 deforestation, by felling the forest with chainsaws, is the predominant = cause of=20 forest loss today.The great majority of deforested land becomes cattle = pasture,=20 either directly following clearing or after a brief period of = agricultural use=20 for annual crops. Pasture has been estimated to occupy 80% of the area=20 deforested by 1995 (Barreto et al. 2005). Soybeans represent a recent = addition=20 to the forces driving deforestation. Soybeans are concentrated in = certain=20 locations in Amazonia, but they have a much more far-reaching effect on=20 deforestation by providing the economic justification for major highway = projects=20 (Fearnside 2001b, 2002a, 2007). Roads are the primary force inducing the = spread=20 of deforestation (Laurance et al. 2001a, Nepstad et al. 2001, = Soares-Filho et=20 al. 2004, 2006). The continued expansion and improvement of the road = network,=20 together with the inflows of population and investment that the roads = attract,=20 point to continued increase in deforestation pressure in the coming = years. This=20 long-term trend is more fundamental than some of the forces that can = cause=20 fluctuations in the annual rate of deforestation, such as repression = campaigns=20 and price oscillations of beef and soybeans and of the exchange rate of = the=20 Brazilian real against the US dollar. These short-term influences are = relevant=20 to the dip in Amazonian deforestation rate in 2005, 2006 and 2007, as = well as to=20 a ressurgence in Mato Grosso in 2007 when commodity prices began to = recover=20 (Souza Jr. et al. 2007). The trend since 1991 has been one of steady = increase,=20 as would be expected from the increases in underlying factors such as = roads,=20 population and investment (Laurance et al. 2001b, Fearnside 2005a). =

Deforestation takes place in the = context of a=20 diverse array of actors, with great differences between locations in = terms of=20 who is responsible. Cattle ranchers are the greatest force. In addition = to=20 ranching for the ''legitimate'' economy - producing beef for sale - = there is=20 also a significant parallel economy. Money can be made from land = speculation,=20 where land is obtained cheaply and later sold for a much higher price,=20 especially if legal title can be obtained and/or if a highway is built = nearby=20 (Fearnside 1987, Hecht et al. 1988). Deforestation of at least part of = the land=20 claim is the primary means of maintaining possession of the area and = defending=20 theinvestment against either invasion by squatters or expropriation by = the=20 government. Clearing also takes place as a use for money that is = "laundered''=20 when the funds are derived from illegal sources such as drug = trafficking,=20 government corruption, sale of stolen property and tax evasion. If money = has=20 come from an illegitimate source, the normal financial assumptions will = not=20 apply to the visible portion of the economy and more money may be spent = than is=20 returned in the form of beef sales. The proceeds, however, will be = "clean''=20 money that can be used in the open economy.

Forest is also lost due to flooding = from=20 hydroelectric dams. This land use is planned to occupy vast areas, = ultimately=20 totaling as much as 10 million hectares (Brazil, ELETROBRAS 1987, see = Fearnside=20 1995a). This corresponds to 2% of Brazil's 5 million km² = Legal Amazon=20 region, or 3% of the originally forested portion of theregion. In = addition to=20 directly flooding forest, hydroelectric projects have much wider impacts = in=20 stimulating road building, migration and deforestation (Fearnside 1989c, = 1999c,=20 2001c, 2005b, 2006b).

LOGGING AND FOREST FIRES

Forest degradation through logging is a = major=20 factor in forest loss because of its interactions with other processes. = Logging=20 is often a prelude to deforestation, facilitating clearing by providing = access=20 on logging roadsand by providing money to landholders through thesale of = timber=20 (Asner et al. 2005, 2006). Logging alsogreatly increases the probability = of=20 forest fires (Uhl and Buschbacher 1985, Alencar et al. 2004, 2006). = These=20 initiate a vicious cycle where fire kills trees by burning the bark at = the base=20 of each trunk (Barbosa and Fearnside 1999, Barlow et al. 2002). Next = fire will=20 be hotter and more destructive than the first one (Nepstad et al. 1999, = 2001).=20 After about three passages of fire the forest is destroyed and will = appear as=20 deforested on satellite images (Cochrane et al. 1999, Cochrane 2003).=20

CLIMATE CHANGE

Climate change is an increasing threat = to Amazonian=20 forest and some climate models (such as the Hadley Center model of the = UK=20 Meteorological Office) indicate a threat to the entire forest within the = current=20 century if global warming continues unabated (e.g., Cox et al. 2004). = Even an=20 average of the results of 15 different models, including those with less = extreme=20 outputs than the Hadley Center model, indicates the eastern portion of = Amazonia=20 being transformed from forest to savanna as a result of climate change = (Salazar=20 et al. 2007). Several factors are not included in the models that = wouldgreatly=20 increase the damage, especially direct deforestation, logging and forest = fires.

MEASURES TO AVOID = DEFORESTATION

Measures to avoid deforestation, also = called=20 "reduction of deforestation and degradation'' (REDD), can be grouped = into the=20 following categories:

REPRESSION BY COMMAND AND = CONTROL

The main focus of government action to = date has=20 been on repressing deforestation through inspection and fines. = Deforestation=20 licensing combined with repression ofunlicensed clearing was sucessful = in=20 reducing deforestation rates in Mato Grosso over the 1999-2001 period, = providing=20 a valuable demonstration of the capacity of government regulation to = influence=20 deforestation rates (Fearnside 2003b, Fearnside and Barbosa 2003). =

PROTECTED AREAS

Protected areas are an essential part = of strategies=20 to contain deforestation and the consequent release of carbon. In = Brazilian=20 Amazonia the demarcation of indigenous areas is particularly important = because=20 of the large area they cover and because of the role played by the = indigenous=20 peoples in actively defending their land from deforestation.

INFRASTRUCTURE DECISIONS

The history of highways in Amazonia = shows a clear=20 pattern of rapid clearing whenever a road is built or improved. = Infrastructure=20 decisions have a great influence on future deforestation, not only from = the=20 highway itself but also from migration of population and capital to new = areas=20 beyond the roads (Fearnside and Gra=E7a 2006, Fearnside 2007). This is a = key part=20 of the process that is not yet understood by many: it is not enough to = create=20 reserves and repress unauthorized clearing if new highways continue to=20 proliferate.

DEVELOPMENT POLICIES

Government development policies that = affect=20 deforestation include incentives for pasture and sawmills. Even today, = the=20 corporations that own ranches financed in the 1970s by the = Superintendency for=20 Development of Amazonia (SUDAM) can escape taxes on income earnedoutside = of=20 Amazonia by investing in their Amazonian properties (Brazil, MF, = Secretaria da=20 Receita Federal 2007, p. 341).

A long-standing policy issue is the = land-tenure=20 regulation that bases the granting of title to untitled(public) lands on = showing=20 that the claimant has made a "benfeitoria'' (literally an = "improvement,''=20 which basically means deforestation). The result is a built-in motive to = clear=20 regardless of what prohibitions or punishments may be enacted. Although = many=20 years have passed since this problem was raised (Fearnside 1979), it is=20 still a fundamental driver of deforestation in the region. = Another policy=20 matter is agricultural financing, as government-subsidized credit is a = major=20 force behind expansion of both crops such as soybeans and more modest=20 small-farmer agriculture.

On the side of slowing deforestation, a = variety of=20 policy measures that are largely ineffective are often presented as=20 deforestation countermeasures. For example, environmental education, = while a=20 worthwhile activity, is unlikely to be convince those who are actually = cutting=20 the forest. Another measure frequently invoked is agroforestry, but this = land=20 use is restrained from occupying very large areas by a variety of = economic and=20 physical limitations, and its role in discouraging forest clearing is = limited=20 (Fearnside 1995b). Agroforestry has a role in directly sequestering = carbon=20 (Tipper and De Jong 1998, De Jong et al. 2004). This land use also has = an=20 important potential role in Amazonia in providing a more sustainable = form of=20 agricultural production to small farmers (Smith et al. 1998). =

The role of urbanization in reducing is = controversial. Wright and Muller-Landau (2006) have suggested that this = trend=20 could significantly slow deforestation, but this has been strongly = contested=20 (Laurance 2006, Sloan 2007). The Manaus Free Trade Zone (SUFRAMA), which = receives federal fiscal incentives as a policy decision to develop = Amazonia, is=20 claimed by the Amazonas state government as an effective break on = deforestation=20 due to the city's attraction of rural population.

Certification of various production = activities has=20 been proposed as a mitigation measure, but the results have been mixed. = An=20 example of the problem is provided by the 2006 loan from the = International=20 Finance Corporation (IFC), of the World Bank group, to a large = slaughterhouse in=20 Marab=E1, Par=E1 (Folha de S=E3o Paulo 2007). In this case a = certified activity=20 can lead to more rather than less deforestation because the = profitability of=20 additional deforestation on many unregulated ranches in the surrounding = area=20 will also increase due to the presence of the slaughterhouse, leading to = more=20 deforestation. Nevertheless, certification initiatives for soybeans, = beef and=20 timber all have potential benefits in bringing these sectors into = compliance=20 with environmental laws and in minimizing their impacts (e.g., Zarin et = al.=20 2004).

Agricultural intensification has been = promoted as a=20 means of avoiding deforestation (S=E1nchez et al. 1982). However, a = variety of=20 effects prevent this from assuming the desired role of slowing the loss = of=20 natural forest (Fearnside 1990). A similar intensification of ranching = (Batjes=20 and Sombroek 1997) also faces resource limits (Fearnside and Barbosa=20 1998).

ENVIRONMENTAL SERVICES AS=20 DEVELOPMENT

DIRECT PAYMENTS FOR ENVIRONMENTAL = SERVICES=20 (PES)

Direct payments for environmental = services can=20 sometimes be more effective in achieving environmental goals than are = indirect=20 programs to promote sustainable development, for example in the buffer = zones=20 around protected areas (Ferraro and Kiss 2002). Payment for = environmental=20 services (PES) programs in Costa Rica and Mexico are the ones with the = most=20 practical experience out of many such programs that have recently been = initiated=20 in tropical countries (Karaousakis 2006, 2007). Such programs are often=20 criticized for paying the rich landholders instead of using government = funds for=20 more socially desirable ends that would reduce the inequalities in = wealth=20 distribution (Zbinden and Lee 2005, Grieg-Gran et al. 2005). In = addition, the=20 programs are often paying ranchers and other actors who have = beendestroying the=20 forest, while traditional forest peoples who have much less impact are = left with=20 no reward for the environmental services of the forest.

The Proambiente program is designed to = compensate=20 the environmental services of small farmers who adopt agroforestry = systems and=20 maintain the carbon stocks in their properties (Mattos et al. 2001, = Brazil, MMA=20 2003). The program depends on the budget of the Ministry of the = Environment and=20 has frequently not had funds available to pay the farmers as promised, = therefore=20 leading to a loss of credibility with local populations in the 13 pilot = sites in=20 Amazonia. Another PES program began in September 2007 in the state of = Amazonas.=20 In this program the state government pays a "forest stipend'' (bolsa = floresta)=20 to small farmers and extractivists in state-owned land in exchange for a = signed=20 commitment to refrain from deforestation (Viana and Campos 2007). The = program=20 also has a component to compensate these farmers for ceasing to sell = manioc=20 flour as a commercial crop; the Amazonas state secretariat of the = environment=20 and sustainable development (SDS) expects the corresponding supply of = demand for=20 manioc flour in Manaus to be supplied from input-intensive farms outside = of=20 Amazonia, especially in Paran=E1. It should be noted, however, that the = Amazonas=20 state secretariat of rural production (SEPROR) hopes to increase manioc=20 production by farmers in the state to make Amazonas self-sufficient in = this=20 dietary staple.

VALUING ENVIRONMENTAL = SERVICES

Time and the value of = forest

What choices are made in allocating = effort for=20 conservation are heavily dependent on how the accounting for = environmental=20 services is done. In the case of the global-warming mitigation, the = value=20 attributed to the deforestation that is averted by an action such as = creation of=20 a forest reserve is heavily dependent on decisions regarding the value = of time.=20 Time can be given value in various ways in carbon calculations: by = applying to=20 carbon either a discount rate or some alternative time-preference = formulation,=20 by setting a time horizon for the calculation, or both. I have argued = that the=20 value attributed to reserve creation will depend on whether the reserves = are=20 created near the deforestation frontier, where reserves that can be = created are=20 smaller and their cost higher but their benefit is almost immediate. If = reserves=20 are created far from the frontier, they are large and inexpensive but = their=20 carbon benefit will only occur at a future date when the deforestation = frontier=20 reaches the area. Tradeoffs therefore exist between reserve proposals in = different locations (Fearnside and Ferraz 1995). Tradeoffs also exist = between=20 reserve creation and other types of mitigation measures, including = avoided=20 deforestation through command-and-control operations, tree planting and=20 reduction of fossil-fuel emissions.

A quantitative example is given in = Fearnside et al.=20 (2000, p. 262-264) comparing the carbon benefits of reserve creation = with those=20 of slowing the overall deforestation rate, as through enforcement of=20 deforestation regulations with inspection and fines. The discount rate = is the=20 critical factor in determining which strategy is most beneficial in = combating=20 global warming. At a discount rate of 1%/year, a 50% reduction in = deforestation=20 has the same value as converting 5% of the forest area into a protected = area,=20 whereas one would have to convert 22% to a protected area to have this = effect if=20 the discount rate were 5%/year. The long-term nature of carbon-stock = protection=20 afforded by protected areas gives them a strong advantage when the long = term is=20 given priority. Reserves have permanence that command-and-control = restraints on=20 deforestation lack, giving them additional value in avoiding climate = change=20 (Dutschke 2007).

This author has argued that some value = should be=20 attached to time. While proposals for the appropriate discount rate vary = from 0%=20 (e.g., Greenpeace International 2000, Kirschbaum 2006) to market rates = of around=20 12% per annum (e.g., van Kooten et al. 1997), a modest value (on the = order of=20 1%/year), or its equivalent through alternative accounting mechanisms, = would=20 avoid distortions that militate against forests and against other = societal=20 interests at either the high or the low end of the range of possible = discounts=20 (Fearnside 2002b, c). If no value is given to time, future climate = change,=20 including glacial cycles that may be millenia in the future, eliminate = any value=20 of maintaining forest as a mitigation option. If the future is = discounted very=20 sharply, then the benefit of a reserve is also eliminated because the = benefit=20 would accrue after the value of the carbon has been discounted to a = value near=20 zero. Time preference represents an important difference between carbon = and=20 biodiversity considerations, and can result in different strategies = being=20 identified as priorities (Fearnside 1995c). The outcome of an ongoing=20 theoretical battle over the value attached to time in carbon = calculations is=20 critical to any valuation of forest maintenance as a global-warming = mitigation=20 measure (Kirschbaum 2006, Fearnside 2008).

Permanence has been addressed by = several proposals=20 (including the ton-year accounting suggested by this author in 1992; see = Fearnside et al. 2000), but the most politically tractable solution is = the=20 Colombian Proposal for temporary certified emissions reductions, or = t-CERs=20 (Blanco and Forner 2000). This is the approach adopted in the 2001 = Marakesh=20 Accords for afforestation and reforestation projects under the Clean = Development=20 Mechanism of the Kyoto Protocol (UN-FCCC 2001). Ways of accounting for=20 "fractions of permanence'' (Dutschke 2002) are needed in order to adjust = mitigation decisions to the reality that no carbon is really permanent.=20

Stocks versus flows

The above discussion implies carbon = accounting=20 based on "additionality,'' or emissions reductions relative to a = hypothetical=20 (counterfactual) baseline representing what would have been emitted in a = reference scenario without a mitigation action, such as creation of a = forest=20 reserve. This is the basis of accounting under the Kyoto Protocol's = Clean=20 Development Mechanism (UN-FCCC 1997, Article 12). Prior to the December = 1997=20 Kyoto Protocol, this author proposed compensating environmental services = of=20 Amazonian forest based on stock maintenance, that is, with payments as = an annual=20 percentage of the stock value similar to the interest that is earned on = a=20 savings account in a bank (Fearnside 1997b). This form of accounting has = recently re-emerged in discussion of how to market the carbon benefits = of the=20 ''Amazonas Initiative'' of the Amazonas state government. State = governments in=20 Brazil are becoming important actors in driving both diplomatic and = technical=20 advances towards making the environmental services of Amazonian forests = into a=20 force for environmental protection. These efforts complement federal = initiatives=20 such as that of the Ministry of the Environment's Protected Areas in = Amazonia=20 (ARPA) program. All of these initiatives require improvements in the = knowledge=20 base and in the human and physical resources needed for evaluating = carbon stocks=20 and properly accounting for and rewarding their maintenance.

The question of whether stocks or = additionality=20 (i.e., the basis of credit under the Kyoto Protocol's Clean Development=20 Mechanism) should be the basis of accounting depends very much on the = stage to=20 which deforestation has advanced in an area. In locations where much has = already=20 been cleared (thereby providing a historical baseline) and rapid = deforestation=20 is underway, as in much of the state of Mato Grosso, the additionality = criterion=20 works well. In cases where very little has been cleared, as in the state = of=20 Amazonas, additionality will not work, at least not if calculated from a = historical baseline. Additionality can be made to work in this situation = with a=20 simulated baseline based on planned road construction, or alternatively=20 additionality can be replaced with stocks-based accounting. In cases = where=20 deforestation is well advanced and the rate is slowing for lack of = available=20 forest to clear, the historical baseline will no longer be appropriate = (e.g.,=20 some parts of Mato Grosso: Fearnside 2003b). In places where the forest = has=20 almost all been cleared already, a historical baseline will produce "hot = air,''=20 or credit with no climate benefit.

The choice between the two accounting = methods has a=20 strong influence on the social outcome. Under additionality the major=20 beneficiaries are likely to be ranchers in Mato Grosso, whereas forest = peoples=20 in the state of Amazonas would be rewarded by the stocks-based approach. = In=20 either case, it is important that the baseline be based either on past = history=20 (i.e., on a period before carbon credit came under discussion) or on = trends=20 derived from past history. This is needed to avoid any possibility of=20 stimulating clearing in order to raise the baseline and increase = subsequent=20 carbon credit. It is possible to have several systems simultaneously for = forests=20 in different situations.

INSURING THAT BENEFITS ARE = REAL

Regardless of the accounting method, a = basic=20 priority is a system in which payments are only made for carbon benefits = that=20 are actually achieved, not for promises. It must be on a = "pay-as-you-go'' basis,=20 not the "up-front'' payments that project proponents inevitably want. = For=20 example, projects commonly call for planting a seedling and expect = immediate=20 credit for a full-grown tree. Guaranteeing that any carbon credit = granted=20 represents a real benefit for climate that has been accounted for in a = fair,=20 transparent and verifiable way is essential, and any deviation from this = has a=20 much greater potential environmental cost than the impact of any carbon = emission=20 that has been improperly permitted. The principal cost of such = deviations is in=20 jeopardizing the entire effort to develop an economy based on = environmental=20 services.

In the case of avoided deforestation, = one must take=20 the debit when deforestation increases along with the credit when it = decreases.=20 Otherwise the mitigation program has no more real benefit than = speculating in=20 the stock market, where the objective is to "buy low and sell high.''=20 Deforestation rates in Amazonia have risen and fallen with various=20 macro-economic factors affecting availability of investment funds, = commodity=20 prices, exchange rates, inflation, land values, etc. (Fearnside 2005a). = These=20 oscillations have the potential to generate "hot air'' carbon credit if = only the=20 decreases are counted.

Uncertainty is inherent in = avoided-deforestation=20 proposals, both with respect to the amount of emission avoided per = hectare and=20 the number of hectares avoided. Uncertainty is greater for avoided = deforestation=20 than for many other mitigation options, such as silvicultural = plantations.=20 Although progress has been made on reducing these uncertainties, much = remains.=20 In choosing between mitigation options and in assigning the credit to = each,=20 application of an overly demanding standard for uncertainty has = substantial=20 drawbacks because of a tradeoff between uncertainty and opportunity for = climate=20 benefits (Fearnside 2000c).

"Leakage'' is one of the fears = frequently raised=20 with respect to avoided deforestation. Leakage refers to the carbon = benefits=20 from a mitigation project being wholly or partially nullified by = emissions=20 provoked by the project outside of its boundaries (including not only = spatial=20 boundaries, but also boundaries in terms of time and in terms of = conceptual=20 framework). For example, if a reserve is created, the people who would = have been=20 clearing forest in the reserve may simply move to another location in = the region=20 and clear just as much forest at the new location, thereby cancelling = out the=20 climatic benefit of the reserve. Most leakage is solved by accounting at = the=20 national level or at least at the level of very large political units, = such as=20 the state of Amazonas (1.5 million km²).

Unresolved issues need not be = obstacles. Above all,=20 it is a matter of attitude that determines if the existence of a problem = is used=20 as an excuse to reject proposals such as those to grant carbon credit = for=20 avoided deforestation, or whether the problem is viewed as just one more = challenge to be faced and overcome. Our effort should go into solving = the=20 problems that can be identified and get on with the task of creating the = institutional structures that are capable of turning the value of = environmental=20 services into monetary flows. These flows must be on the scale that is = needed to=20 change the course of history in Amazonia.

CONCLUSIONS

There is no time to lose in combating = deforestation=20 and in reducing impacts such as greenhouse-gas emissions. In the coming = years=20 critical thresholds are likely to be crossed in Amazonia, both in the=20 deforestation process and in the forest's resistance to global warming. = Waiting=20 to take action makes the situation much worse because of delays in = various parts=20 of the system including the climate system (emissions-warming), the = feedbacks=20 that cause forest degeneration (global warming-savannization), and the = impact of=20 decisions (road building-deforestation). All this points to the = importance of=20 acting now rather than waiting for climate impacts to become more = apparent.=20 Containing deforestation will require more than increased enforcement of = environmental regulations: it will require giving value to forest = maintenance by=20 rewarding environmental services. Maintaining carbon stocks is the = environmental=20 service closest to becoming a basis for substantial monetary flows, = although=20 biodiversity and water cycling also have great importance and could = generate=20 additional flows over the long term. Rewarding carbon benefits requires=20 appropriate accounting procedures for each phase of the deforestation = process:=20 the initial phase where little or no clearing has taken place, the phase = of=20 rapid clearing where plenty of forest remains available for clearing, = and the=20 declining phase where available forest is dwindling. Current = negotiations focus=20 on reducing carbon flows in the second of these phases, but additional=20 arrangements are needed to reward carbon stocks for forests in the first = phase,=20 such as large areas in Brazil's state of Amazonas. For these largely = intact=20 areas, current decisions on highway construction and reserve creation = are=20 critical to the future fate of the forest.

ACKNOWLEDGMENTS

The Conselho Nacional do = Desenvolvimento Cient=EDfico=20 e Tecnol=F3gico (CNPq: Proc. 306031/2004-3, 474548/ 2006-6, = 557152/2005-4,=20 420199/2005-5), Rede GEOMA and the Instituto Nacional de Pesquisas da = Amaz=F4nia=20 (INPA: PPI PRJ05.57) contributed financial support. I am grateful for = helpful=20 reviewer comments.

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=20 Correspondence to:
Philip Martin Fearnside
E-mail: pmfearn@inpa.gov.br

Manuscript received on October 8, 2007; = accepted=20 for publication on January 21, 2008; contributed by Philip M. = Fearnside^*=

*= =20 Member Academia Brasileira de Ci=EAncias

=A9 2009 Academia=20 Brasileira de Ci=EAncias

R. Anfilofio de Carvalho, 29, = 3.=20 and.
20030-060 Rio de Janeiro RJ Brazil
Tel: +55 21 = 3907-8100
Fax: +55=20 21 3907-8101

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