ANALISYS CLIMATE CHANGE, ENERGY AND ENVIRONMENT THE AMAZON FUND: PATHWAYS TO SOCIAL INCLUSION This paper investigates how the Amazon Fund can contribute to reducing social inequality and the marginalization of indigenous and traditional sustainable producers in the Amazon. Broader civil society participation, autonomous subfunds and stronger integration with diverse public policies that should prioritize rural smallscale production and food security as well as environmental protection. Claudia Horn March 2023 The reopening of the Amazon Fund is an opportune moment to improve the communication between the fund’s administrator BNDES and local actors on projects that fit better with local needs and the environment.

CLIMATE CHANGE, ENERGY AND ENVIRONMENT THE AMAZON FUND: PATHWAYS TO SOCIAL INCLUSION

PATHWAYS TO SOCIAL INCLUSION Contents INTRODUCTION 2 WEALTH AND POVERTY IN THE LEGAL AMAZON 3 REDD+ FINANCE TO SUPPORT PUBLIC POLICIES AND REPRESENT PCTS 5 INSTITUTIONAL LEARNING AND OPPORTUNITIES FOR POPULAR GOVERNANCE 5 PROMOTING SOCIOECONOMIC DEVELOPMENT 6 THE INTEGRATION WITH PUBLIC POLICIES 8 THE PRIVATE SECTOR AND SOCIAL SAFEGUARDS 9 RECOMMENDATIONS 10 ANNEX 12 REFERENCES 15 1

FRIEDRICH-EBERT-STIFTUNG – THE AMAZON FUND INTRODUCTION Between 2008 and 2019, Brazil’s Amazon Fund raised US$1.3 billion in voluntary donations from the Norwegian government(93.08%), Germany’s development bank, KfW(5.7%), and the Brazilian semi-public oil company Petrobras(0.5%). The initiative to finance actions for Reducing Emissions from Deforestation and Forest Degradation(REDD+) is the only major national REDD+ fund managed by a public recipient agency, Brazil’s National Development Bank(BNDES). It disbursed US$469 million towards preventing, monitoring, and combating deforestation and promoting sustainable development in the Legal Amazon(BNDES 2019a). 1 In 2019, Brazil’s far-right government, led by then-President Jair Bolsonaro, abolished the fund by eliminating its participatory orientation committee. Only previously approved projects have been active since then. However, recently inaugurated Brazilian President Luís Ignacio Lula da Silva’s current government reestablished the Fund it had founded. The Amazon Fund will support the urgent task of reviving Brazil’s dismantled environmental regulation and the support of Indigenous and traditional peoples. This urgency is clear given the dramatic spike in deforestation, environmental crimes, and violent invasions by illegal miners in Indigenous territories, most recently causing a dramatic humanitarian crisis in Yanomami villages. Brazil’s environment minister Marina Silva has prioritized fundraising for emergency measures. 2 At the same time, the Lula government’s emphasis on the political representation of Indigenous, Quilombola, and traditional populations, land demarcation, and redistributive social measures are an opportunity to review how the Amazon Fund can best potentialize this political emancipation. This policy paper contributes to and considers the results of existing reviews of the Amazon Fund. Several academic articles examine the Amazon Fund as a model for international finance toward deforestation avoidance and analyze its innovative governance structure(Marcovitch and Pinsky 2014). For instance, Bidone(2022) argues that the Fund institutionalizes and combines ecological modernization approaches with multilevel, multi-stakeholder governance, providing a space for broad debates about development. Other studies focus on the Amazon Fund’s results-based financing mechanism that departs from traditional foreign aid. However, they find diverging understandings among donors and Brazilian actors of what constitutes legitimate results(van der Hoff, Rajão, and Leroy 2018). In addition, case studies consider the causal effects of Amazon Fund support on local deforestation, for instance, in Alta Floresta, Mato Grosso(Correa et al. 2020). More policy-oriented studies include reviews on Norwegian’s REDD+ aid, pointing out the exceptional agreement of the Amazon Fund, with Brazil claiming more ownership over implementation(Angelsen 2017). Norway’s auditor’s report reviewed the Fund, pointing out significant strengthening of Indigenous actors but a lack of transparency over compliance with socioenvironmental safeguards and regarding measurement and reporting(Foss 2018). However, the more detailed review of Kadri et al.(2020) highlights that establishing this complex financing mechanism has been a progressive learning process. The German Agency for International Cooperation(GIZ), which has also been advising the Amazon Fund, has conducted mid-term evaluations. The reports focus on its effectiveness from 2008 to 2018(Garcia 2019), the benefit distribution of the Fund’s projects(Viergever and Santos 2019), and its support towards projects with Indigenous peoples(Gomes, Baniwa, and Caldas 2021), as well as the implementation of the Rural Environmental Registry(CAR)(Crisostomo and Machado 2019). In addition, this text draws on the review of the Amazon Fund’s own regular activity reports(BNDES 2018, 2021) and the ex-post evaluation conducted by the German Development Bank(KfW 2016). These evaluations agree on the success of the Amazon Fund in supporting measures to combat deforestation and strengthen sustainable production. However, they miss clear indicators and baseline data to assess impacts on the socioenvironmental conditions of the region. An important document is the collective civil society reflection on lessons learned, organized and summarized by INESC in June 2022, which offers recommendations on the governance and operation of the Amazon Fund(Ribeiro, Pietricovsky, and Moroni 2022). 1. – The Legal Amazon comprises nine Brazilian states: Acre, Amapá, Amazonas, Maranhão, Mato Grosso, Pará,Rondônia, Roraima, and Tocantins. 2 – https://www.politicaporinteiro.org/2023/01/20/brasilem-davos-os-sinais-da-primeira-agenda-internacionaldo-novo-governo/?fbclid=PAAaY_NVcCBxt0QZG5dVswa7iecz8nSbTazNtuHiuZbVzN_O3nAPINupw8S8; – https://www.unicamp.br/unicamp/noticias/2023/01/24/situacao-dosyanomami-expoe-abandono-dos-indigenas-pelo-estado. This policy paper contributes to this debate by drawing specific attention to the socioeconomic conditions in the Legal Amazon – particularly the concentration of wealth, rural poverty, and the attacks on the territorial rights of Indigenous and traditional populations. While the primary focus of the Amazon Fund is deforestation reduction, it also seeks to pro2

PATHWAYS TO SOCIAL INCLUSION mote sustainable production and income generation. Since rural elites contest the notions of sustainable development and the more recent bioeconomy, this paper proposes a broader debate about the role and criteria of the Fund. It investigates how the fund could contribute to reducing inequality and the socioeconomic marginalization of Indigenous and traditional sustainable producers by centering them as subjects and decision-makers. As part of my doctoral research on Brazil’s environmental cooperation, including the Pilot Program to Conserve the Brazilian Rainforest(PPG7) and the Amazon Fund, I have researched this topic since 2017. Based in Belém, my research includes over 150 interviews with policy makers, diplomats, donor representatives, researchers, and members of social movements and NGOs. I also participated in meetings such as the ENREDD+ safeguard consultations, local meetings, and international climate summits. In addition to a review of the abovementioned reports, this paper draws on qualitative data, project documents, and socioeconomic data. The rural population of Brazil’s Legal Amazon Beyond its biodiversity and natural riches, the Amazon region has an incomparable cultural, ethnic, and linguistic diversity including Indigenous peoples, rubber tappers, and traditional peoples such as Quilombolas, riverside dwellers, artisanal fishermen and fisherwomen, landless peasants and members of land-reform settlements, family farmers, and others. Around 440,000 Indigenous people – more than 180 peoples and several isolated groups – live in an area of about 110 million hectares. More than 1,000 Quilombola communities live in the Legal Amazon in multiple states: about 750 in Maranhão, more than 400 in Pará, almost 100 in Tocantins and dozens in Amapá, Amazonas, and Rondônia. The descendants of former enslaved people of mostly, though not only, African descent live from fishing, extractivism, and small-farming and have collective rights to their territories. WEALTH AND POVERTY IN THE LEGAL AMAZON In the Amazon region, of which more than half is located within the borders of Brazil, the commodity-based development model stimulates rural impoverishment, environmental problems, unequal land distribution, and lack of access to education and health. The Indigenous, traditional, and Quilombola (descendants of escaped formerly enslaved people) people have been subject to successive colonialization and exploitation; for instance, the oppression of the seringueiros(rubber tappers) during the rubber boom of the 19 th century. Since the 1970s, exploitation has spread to almost every forest. Brazil has become a global leader in exporting commodities such as soy and meat, making commercial agriculture expansion the main driver of deforestation. The Amazon region is also an export corridor and energy producer for the national economy, and interconnected mining, commodity-export logistics(industrial waterways, trains), hydroelectric dams, and agribusiness ventures displace and dispossess Indigenous and traditional populations. 3 After China, the EU imports most of the soy and palm oil that cause deforestation in the Amazon. The traditional, small-scale production consists mainly of the extraction of non-timber products such as nuts; smallscale farming of manioc, beans, potatoes, squash, and other staples; fishing; and agroforestry practices that are often combined. For example, in river communities like Igarapé-Miri in the state of Pará, fishing, extractivism, and small-scale agriculture provide 90% of local consumption. However, commercializing products from small-scale exThe traditional knowledge and productive practices of these populations have been fundamental to the protection of Amazonian ecosystems, for instance, by preserving creole seeds and cultivating without any artificial inputs. The Amazon peoples are collectively organized to fight for the implementation of their land rights, the promotion of their identity, and access to social services like education. Source: https://ispn.org.br/biomas/amazonia/povos-e-comunidades-tradicionais-da-amazonia/ tractivism and agroecology is challenging. Compared to southern Brazil, producers hardly have access to agroforestry technologies and soil management equipment that would help them to expand production. As a result, the regional production is more artisanal, based on local staples such as açaí, mandioc flour, and fruit pulps. In addition, the“Amazon costs” of long distances and few local transport lines inhibit scaling up and make commercialization efforts incipient and mainly local. Considering the conventional measure of Gross Value Added to describe the region’s economy, the service sector comprises, with 64.6%, the greatest share of the Legal Amazon’s economy, though this is lower than Brazil’s average of 73%. Agriculture makes up 9.4% and the industrial sector 26%. 4 Commercial agriculture and livestock have expanded, as cattle ranching remains the most inefficient agricultural activity. Agribusiness is especially dominant in the so-called“arc of deforestation,” namely in the states of Rondônia, Pará, Mato Grosso, and Tocantins, as well as in Maranhão. The Amazon is also a frontier for min3 https://outraspalavras.net/outrasmidias/amazonia-tres-mega-obras-narota-da-destruicao/; https://www.zedudu.com.br/helder-barbalho-afirma-quederrocamento-do-lourencao-deve-ser-acelerado/ 4 https://blogdoibre.fgv.br/posts/um-breve-retrato-economico-daamazonia 3

FRIEDRICH-EBERT-STIFTUNG – THE AMAZON FUND Table 1 Average and median household income per capita(R$) 2021 Brazil Rondônia(RO) Acre(AC) Amazonas(AM) Roraima(RR) Pará(PA) Amapá(AP) Tocantins(TO) Maranhão(MA) Mato Grosso(MT) Source: IBGE. 2021 Average 1 353 1013 882 810 1027 828 844 1055 639 1322 Median 810 729 539 473 532 520 507 654 395 914 Percentage below the Poverty Line 28.4% 31% 46,9% 50,8% 46,2% 46,6% 47,2% 33,1% 57,5% 20,6% eral extraction, especially in Amazonas and Pará, including manganese, iron, bauxite, nickel, and gold. It stands out in Pará, where the Carajás Mine, the largest iron ore mine in the world, is located. Pará also produces the most electricity of any state for the rest of the country, with its hydroelectric dams Belo Monte and Tucuruí. The region’s economy is based on primary goods, except for the Free Trade Zone, founded in 1967 by the military dictatorship, and located in the capital city of Amazonas, Manaus, where companies produce machinery, electronics, chemicals, and cars. While these companies benefit from significant tax waivers, Manaus has the second worst income among the capitals, losing only to São Luís, the capital of Maranhão. 5 The Legal Amazon is one of Brazil’s poorest and most unequal regions. The Social Progress Index(IPS) uses public data to assess the socioenvironmental conditions of Amazon municipalities. 6 The region scores well below Brazil’s average, and half of the indicators, including water and sanitation, access to information, and human rights, have a low average score(below 60 out of 100). Of the 772 Amazon municipalities assessed, almost half(49%) had a reduction in the 2021 IPS compared to 2018. Among the 15 municipalities with the worst index are hotspots of deforestation, forest degradation, and social conflicts, such as the Pará municipalities of Pacajá, Pau D’Arco, Nova Ipixuna, and Nova Conceição do Piriá, as well as centers of illegal mining like Jacareacanga(PA). Violence has increased throughout the region, and is reflected in high homicide rates. 7 Since 2012, the Pastoral Land Commission(CPT) has reported on Brazil’s rural conflicts involving land, water, and labor rights. In 2021, 49.49% of the conflicts(641) registered in the country occurred in the Legal Amazon and were related to agribusiness and mining. From the 35 murders recorded, a total of 28 took place in the Legal Amazon. 8 During the COVID-19 pandemic under the Bolsonaro government – which paralyzed the demarcation of Indigenous territories and the implementation of agrarian reform through INCRA – constant fighting-off of territorial invasions from loggers, land grabbers, and illegal miners has implicated the livelihoods and small-scale production of Traditional Peoples and Communities(PCTs). While hunger has increased across Brazil, it is worst in the North where 71,6% of the population and over half of the family farmer households(54.6%) live in moderate or severe food insecurity. 9 The Bolsonaro government dismantled policies supporting these producers, such as the Food Acquisition Program(PAA) and the National School Feeding Program(PNAE) To make income generation from sustainable production viable, Indigenous, Quilombola, traditional territories, and agrarian-reform settlements must be defended against invasion, land grabbing, and threats. The socioeconomic impact depends on effective measures to combat and control deforestation and environmental crimes in the Amazon, as well as actions toward food security and food sovereignty based on traditional agrobiodiversity and agroecology practices without pesticides. REDD+ FINANCE TO SUPPORT PUBLIC POLICIES AND REPRESENT PCTS It is important to remember that most national REDD+ funds in Global South countries – despite an emphasis on Global 5 – https://aamazonia.com.br/regiao-norte-tem-maior-queda-de-rendae-aumento-de-despesas-na-pandemia-diz-estudo/; – https://valorinternational.globo.com/economy/news/2022/11/28/ brazils-free-trade-zone-in-the-amazon-is-generating-less-jobs.ghtml. 6 https://imazon.org.br/publicacoes/ips-amazonia-2021/ 7 https://forumseguranca.org.br/wp-content/uploads/2021/11/violenciaamazonica-ingles-v3-web.pdf 8 https://www.cptnacional.org.br/publicacoes-2/destaque/6001conflitos-no-campo-brasil-2021 9 https://www.brasildefato.com.br/2022/10/12/sob-bolsonaro-produ tores-de-alimentos-passam-fome-na-amazonia; https://g1.globo.com/ro/rondonia/noticia/2022/06/08/geografia-dafome-regiao-norte-do-brasil-e-a-mais-impactada-pela-insegurancaalimentar.html. 4

PATHWAYS TO SOCIAL INCLUSION South ownership – are managed by international organizations such as the World Bank. 10 The Amazon Fund is an exception, reflecting significant emancipation from traditional foreign aid and progressive leadership of Brazil’s environmental sector. Using a carbon price of five US dollars per ton of carbon dioxide, the Amazon Fund has rewarded results in reduced deforestation, calculated as the difference between measured deforestation and a defined baseline measured by public deforestation rates. The average deforestation rates of the previous ten years, updated every five years, determine the donation level. For instance, deforestation rates from 2006 to 2012(the lowest recorded) were compared with a reference level equal to the average deforestation between 1996 and 2005. With the establishment of the National Strategy for REDD+ (ENREDD+) in 2015, the Amazon Fund is considered formally eligible to access payments for REDD+ results achieved by Brazil and recognized by the UNFCCC, and is integrated with Brazil’s nationally determined contributions(NDCs) to mitigating global climate change, federal regulation, and socioenvironmental safeguards, such as consultations and free prior-informed consent. Brazil’s ENREDD+ aligns with the so-called Warsaw Framework agreed upon at COP19 over the methodological requirements for REDD+. The framework impedes market instruments for forest offsets, which have been controversial in international and Brazil’s climate politics. The idea of forest offsets means that industrialized countries and companies can compensate for parts of their industry and fossil fuel energy emissions by purchasing credits from conservation projects in forest countries. 11 The 2021 UN Climate Change Conference(COP26) in Glasgow established the carbon market through article six of the Paris Agreement. However, climate justice activists argue that offsetting delays climate action and infringes on Indigenous and traditional peoples’ territorial rights. 12 The Bolsonaro government undermined this framework by dissolving the National REDD+ Commission(CONAREDD+) in 2019 and reestablishing it without legitimate representation. 13 This reflects attempts from the agribusiness(so-called ruralist) sector to change the national REDD+ framework and promote market-based mechanisms, including forest offsets. Similarly, the Bolsonaro government limited popular participation in the National Council for the Environment(Conama), an advisory and deliberative body, which the Lula government has reinstated. 14 10 As Asiyanbi and Massarella(2020) argue for Tanzania and Nigeria, donors steer programs to establish standardized REDD+ model policies 11 https://news.mongabay.com/2022/11/cop27-boosts-carbon-tradingand-non-market-conservation-but-can-they-save-forests/.12. 12 There are also technical concerns, namely leakage, additionality, permanence, and measurement. Leakage refers to the possibility of deforestation moving to other areas or countries. Additionality refers to the impossibility of knowing what would have happened in the absence of the intervention. Permanence refers to the concern that trees only temporarily store carbon until they die and release it. Measurement refers to the difficulty and unreliability of data on stored carbon in forests(Scheba 2018). 13 http://redd.mma.gov.br/pt/comissao-nacional-para-redd. 14 https://exame.com/brasil/lula-revoga-decreto-de-bolsonaro-paraBrazil’s national model is based on a consensus reached through consultation with civil society and on strong regulation, environmental integrity, and the protection of traditional and Indigenous territorial rights. The reopening of the fund should consider this consensus and institutional framework. INSTITUTIONAL LEARNING AND OPPORTUNITIES FOR POPULAR GOVERNANCE The institutionalization of the Amazon Fund has been a learning process reflecting the significant mobilization and work of Brazilian civil society organizations and the learning of the BNDES as an administrator in partnership with the federal, state, and municipal governments and universities. Brazil’s National Development Bank(BNDES) manages the Amazon Fund, calling for, selecting, and monitoring projects. The Amazon Fund is audited annually by independent agencies, including a financial audit(accuracy of recorded balances) and an audit of compliance of objectives and funding with the foundational decree, the Guidance Committee(COFA) criteria, PPCDAM, and the National REDD+ Strategy(ENREDD+). Compared to institutions such as the World Bank, the operational costs of BNDES are very low at 3% because they exclude the salaries of the approximately 25 Amazon Fund staff. Donors did not interfere in project selection, though there was informal coordination and, since 2010, German technical assistance to the BNDES. The high profile and international prestige of BNDES give relevance to environmental policies. Some believe that BNDES“safeguarded” the fund against day-to-day politics and guaranteed the persistence of the fund until 2019 from Bolsonaro’s dismantling measures. The administration of the Amazon Fund is part of a transformation process of BNDES, which has historically invested in large ventures driving deforestation, land conflict, and rural displacement, including energy and export logistics megaprojects and agroindustry. One of the main challenges in implementing the Fund was the lack of local reach of the BNDES – based far away from the Amazon in Rio de Janeiro – in the country and the Amazon region. Over the years, BNDES Amazon Fund staff has acquired more sensitivity for the Amazon region, and its reality improved their handling of projects with forest communities, which is essential for positive impact. However, the BNDES system is for big companies, and there exist many hurdles, requirements, and unclarity about the project application and execution, limiting access for PCTs and most of their local associations. Moreover, it is unfeasible for BNDES to directly fund small projects, requiring special arrangements as mentioned below. The Brazilian federal audit office (TCU) and the Central Bank audit BNDES, which implies documentation requirements and a lengthy and costly proampliar-participacao-popular-no-conama/. 5

FRIEDRICH-EBERT-STIFTUNG – THE AMAZON FUND cess for project approval(Kadri et al., 2020). But before 2018, the learning process included reconsidering some of the formal requirements for the eligibility of beneficiary organizations regarding their necessity and feasibility, which should be taken up again. Moreover, between 2015 and 2016, BNDES opened a regional office in Belém, the capital of Pará, where an Amazon Fund manager worked, but it did not effectively operate and closed due to the restructuring of the bank. The Amazon Fund’s Technical Committee(CFTA) certifies the emissions from deforestation. Its composition includes specialists who use public data from the National Institute for Space Research(INPE) and the Brazilian Forest Service (SFB) to calculate emission reductions associated with the decline of deforestation. This Committee was extinguished along with COFA by Decree Nº 9.759/2019. The Fund’s participatory National Guidance Committee (COFA) set the guidelines and criteria for investment in projects and monitored implementation and results. Chaired by the Ministry of Environment, it included representatives of six federal ministries, BNDES, the Chief of Staff of the Presidency, the nine Amazon state governments, and six civil society representatives. In addition, COFA set the guidelines for the allocation of funds. cluding demands for organizational solutions to overcome the abovementioned bureaucratic complexity of BNDES. Despite the importance of the relationship between BNDES and COFA, the latter had limited civil society representation. 15 The National Confederation of Industry (CNI) and the National Forum of Forest-Based Activities (FNABF) represent company interests, but neither extractivist nor Quilombola or fisher communities are members(CNS, CONAQ, MPP). In line with the new government’s agenda, the Amazon Fund can potentialize the role of PCTs as subjects rather than objects in building sustainable development. However, given the unequal power relations in the regions, PCTs should be prioritized over business interests. Likewise, the federal government’s participation in COFA could reflect the new government’s transversal integration of PCTs and the environment, especially the new Indigenous Peoples and Racial Equality ministries. In any event, the participation of the Ministry of Agrarian Development and Family Agriculture would be essential to address poverty and food insecurity. Interviews and documents suggest that the broader involvement of PCTs and further communication could improve the local recognition and reputation of the Fund’s governance(Ribeiro, Pietricovsky, and Moroni, 2022). The composition of the COFA 1) Federal Government(8) - Ministry of the Environment(MMA)(chair) BNDES - Ministry of Industry, Foreign Trade, and Services - Ministry of Foreign Affairs(MRA) - Ministry of Agriculture, Livestock, and Supply(MAPA) - Ministry of Science, Technology, and Innovation - Civil House of the Presidency of the Republic - National Indian Foundation 2) Nine Amazon State Governments(9) 3) Civil Society(6) - The Brazilian Forum of NGOs and Social Movements for the Environment and Development(FBOMS) - Coordination of Indigenous Organizations of the Brazilian Amazon(COIAB) - National Confederation of Agricultural Workers (CONTAG) - Brazilian Society for the Advancement of Science(SBPC) - National Confederation of Industry(CNI) - National Forum of Forest-Based Activities(FNABF) For state governments, the voting right is conditional on having Plans for Preventing and Combating Deforestation (PPCDs), encouraging state-level public policies in line with the Amazon Fund’s objective. COFA decisions are taken by consensus. Representatives of the donors of the Fund from Norway and Germany attend the meetings as observers, without the right to vote or to speak. The COFA has been an essential space for civil society actors to bring proposals, inPROMOTING SOCIOECONOMIC DEVELOPMENT The Amazon Fund’s general objective is to“reduce deforestation with sustainable development in the Brazilian Amazon.” It operated along four axes, as illustrated in graphic 1 (next page). As of 2019, when it was abolished, the Amazon Fund had supported 102 projects totaling over US$693 million, of which it disbursed US$568 million. Eighty percent of its resources were earmarked for the Amazon, while 20% could be used in other biomes and tropical countries. A part of the allocation – in 2017, 8.4% of the resources – was structured through thematic calls such as sustainable value chains, Indigenous territories, and reforestation. The Amazon Fund promoted large-scale projects covering a set of municipalities, rural settlements or protected areas, a state planning region, or the surroundings of major infrastructure works(BNDES 2019c). By March 2022, 15 Regarding the conservation and sustainable development of the Brazilian Amazon are two broad non-state groups, listed in Table 4 in the Anexx. Grassroots groups and member organizations such as local unions, peasant cooperatives, and Indigenous groups(e.g. the National Confederation of Agricultural Workers{CONTAG}) represent and respond to the current issues of their constituencies. In fact, local associations are often producer associations. NGOs are professionalized research and advocacy organizations and interest groups with resources and staff, produce and disseminate important information, and raise funds. Big international conservation NGOs (BINGOs) such as Conservation International and Greenpeace, or Brazil-based NGOs such as FASE and the Instituto Socioambiental support and consult with grassroots groups but do not formally represent them. 6

PATHWAYS TO SOCIAL INCLUSION SUSTAINABLE PRODUCTION (1) REDUCING DEFORESTATION WITH SUSTAINABLE DEVELOPMENT R$ 1.825.446.892,68 MONITORING AND CONTROL (2) LAND USE PLANNING (3) SCIENCE, INNOVATION AND ECONOMIC INSTRUMENTS (4) R$ 476.407.512,31(26%) R$ 852.775.169,35(47%) R$ 252.569.630,31(14%) R$ 243.694.553,31(13%) Social organizations Federal and state governments State governments Different executing actors and beneficiaries 19% of the resources went to the federal government, 26% to state governments, 1% to municipal governments, and 54% to the non-state“third sector”(BNDES 2018). The Amazon Fund funded sustainable production activities and income generation, which received 26% to one-third of its resources. In addition, it promoted the commercialization of forest products and the recovery of deforested and degraded areas. The projects contributed with equipment and trainings, often linked with the public Technical Assistance and Rural Extension(ATER). Projects with a specific focus on income generation within this component, which have already been completed, corresponding to a total amount of more than R$35.4 million(Brazilian reals, approximately US$7 million)(Viergever and Santos 2019). According to evaluations, the Amazon Fund has financed over 7,500 sustainable production initiatives, benefiting more than 160,000 people, of which 34,000 are women (Viergever and Santos 2019). Evaluations confirm that smallscale production protects the environment and sustains traditional people in rural areas who may otherwise lose their income base, move to urban peripheries, and accept precarious work. However, the evaluations of these projects do not find a correlation between Amazon Fund support and poverty levels, reflecting the chronic lack of access to public services. Reports find that the project results are hard to sustain beyond the support phase. The GIZ evaluation remarks the mismatch between norms like phytosanitary standards made for the industrial sector and the local processing of sociobiodiversity production(ibid.). Part of the issue in this lack of independence of producer associations lies in the funding arrangements. The Amazon Fund provided limited direct access for Indigenous, traditional, and Quilombola groups given the above-mentioned bureaucratic filters. The members and associates of grassroots movements such as CNS or CONAQ who did not have a direct connection with the Amazon Fund through COFA had less knowledge and access to funds than more professionalized organizations. To address the issue of access, the Amazon Fund financed in three broad modalities. First, the Amazon Fund funded a network of intermediary NGOs, so-called aglutinadores. Partner institutions had to demonstrate experience, knowledge, operational capacity, and scale in the territory(BNDES 2019b). These executed independent projects with smaller associations. In this case, the proposing NGOs would already select the sub-organizations for a certain project. For example, the Fund supported the Bolsa Floresta PES scheme implemented by the Sustainable Amazon Foundation(FAS) in participating communities in Amazonas state. The NGO monitored and restricted the extension of the cultivation of crops to pristine forests. Each family receives R$50 per month for complying, as well as business and marketing training. The second way has been through the financing of sub-funds such as the Fundo Dema that has open project calls and funds for women, Quilombola, and Indigenous associations, especially along the Transamazônica Highway. 16 In this modality, associations more autonomously execute projects to strengthen solidarity economy and food security. The third modality consists of thematic project calls by the Amazon Fund for which larger organizations apply but select the participating associations afterwards. The objective of the calls is to structure operations along necessities and broaden the range of supported organizations to incorporate other partners that would otherwise have no access and not be on the Fund’s radar. The four calls were for“Sustainable 16 https://www.fundodema.org.br/quem-somos/historia/. 7

FRIEDRICH-EBERT-STIFTUNG – THE AMAZON FUND Productive Projects in the Amazon”(2012),“Elaboration and implementation of Territorial and Environmental Management Plans(PGTAs) in Indigenous lands under the PNGATI” (2014),“Consolidation and strengthening of sustainable and inclusive value chains,” and“Recovery of Vegetation Cover” (2017)(Ribeiro, Pietricovsky, and Moroni 2022). While these arrangements made it possible to channel funds to local organizations, it also concentrated the administrative capacity within the NGOs managing the funds. According to reports, the Amazon Fund affected 345 small institutions and 142,000 people with this strategy, though only indirectly. Small NGOs were not able to meet the bureaucratic criteria and needed to associate with large ones to access resources. The COFA discussed this persistent issue since 2010 (COFA 2010, 2015). For example, support for Indigenous peoples, especially through the National Policy for the Management of Indigenous Territories(PNGATI), was one of the highlights of the Amazon Fund. Arguably, 64% of all official Indigenous lands in the Amazon received support. But Indigenous associations had no direct access to funds, also due to financial safeguards, and consistently demanded access in COFA meetings(COFA 2010). The GIZ evaluation finds that in some cases, small institutions could emancipate themselves and receive independent resources. However, it states,“to ensure that smaller institutions can emerge stronger from this process, it is essential for the Amazon Fund to evaluate and monitor the relationships between aggregators and their smaller institutions, prioritizing greater institutional capacity, building grassroots movements and local organizations, and thereby contributing to a gradual improvement process of the socio-environmental governance of the Amazon”(Viergever and Santos 2019). The complementary modalities had considerable success in reaching distant communities. But a stronger involvement of existing regional structures and institutions such as CNS, CONAQ, and MAB, that historically represent and promote the political and socioeconomic emancipation of PCTs, and have local communication and mobilization structures. There have been demands and efforts by PCTs to administer destinated sub-funds autonomously, for instance, by Malungu, the representation of Quilombola communities in the state of Pará, which currently receives Amazon Fund resources via the Fundo Dema. The option of autonomous funds could be revisited as it presents an opportunity to draw on and at the same time support existing movement structures and their communication, education, etc. THE INTEGRATION WITH PUBLIC POLICIES Launched in 2003, PPCDAm reduced the annual deforestation rate by 59% between 2004 and 2007, using actions in the areas of land and territorial ordering; monitoring and control; and sustainable, productive activities(Maia, Hargrave, Gómez, and Röper 2011). According to data from the Project for Monitoring deforestation in the Legal Amazon (PRODES) of the National Institute for Space Research(INPE), the total area deforested annually in the period 2012-2013 corresponds to only 4571 km 2 , the lowest rate of deforestation in the previous 21 years. The most crucial phase(to 2008) worked on the demarcation of Indigenous areas, conservation units, and advances in control and command. During this period, Brazil created 25 million hectares of conservation areas, representing 70% of the protected areas in the world, and approved 10 million hectares of Indigenous lands. 17 Apart from creating conservation areas, PPCDAm enforced Brazil’s Forest Code, which mandates that landowners maintain a“legal reserve” of standing forest, namely 20% in savannas and between 50% and 80% in the Amazon. If a landowner deforests the reserve, he receives a fine(which often is not paid). Based on digitalization and publicly available satellite monitoring data from the Real-Time Deforestation Detection System(DETER), 18 IBAMA’s local inspection was finally effective in the Amazon. The Bolsonaro government paralyzed PPCDAm, weakening the licensing agency IBAMA and undermining the monitoring agency INPE. In the first days of his term, the government also abolished the Secretary for Climate Change within the MMA that was responsible for fighting deforestation. Major budget cuts did the rest to the environmental agencies IBAMA and ICMBio(responsible for the management of conservation areas). 19 Given that Lula reinstated PPCDAm on his first day in office, the Amazon Fund will be fundamental in supporting public policies fighting deforestation and environmental crime. Previously, the Fund’s investments contributed to maintaining low deforestation even though it could not reduce it. During Amazon Fund implementation, the rate increased 49% in 2020 in relation to the baseline year 2009. However, comparing the average annual deforestation between 2010 and 2020 with this baseline finds a reduction of 4% in the deforested area(BNDES 2021). It also supported the National Plan for the Recovery of Native Vegetation(PLANAVEG), the National Policy for Territorial and Environmental Management of Indigenous Lands (PNGATI), and the Forest Code with the Rural Environmental Registry(CAR). In the case of CAR, the Amazon Fund provided funds destined for monitoring and control(US$113 million) to state governments responsible for the implementation of CAR, investing in equipment, training, and assistance for landowners. Since there have been inconsistencies and abuses of the registering system to occupy public lands, inThe impact of the Amazon Fund on strengthening the sustainable production of PCTs also depends on the integration with public policies. Per decree, the Amazon Fund’s supported projects observe and implement the Plan for the Prevention and Control of Deforestation in the Brazilian Amazon (PPCDAm) and the National REDD+ Strategy(ENREDD+). 17 Approval is the last step in this process; in practice, the most important one is demarcation or identifying the land for its new use. 18 PRODES generates an annual deforestation rate. 19 https://www1.folha.uol.com.br/ambiente/2022/10/o-que-foi-oppcdam-plano-do-pt-contra-desmatamento-desmobilizado-porbolsonaro.shtml. 8

PATHWAYS TO SOCIAL INCLUSION vestment in the verification and correction of registrations is urgent as well as the correct collective registration of Quilombola and traditional communities. 20 In addition, the Amazon Fund’s integration with other public policies could be revisited, particularly those promoting rural small-scale production and food security, and which were dismantled and underfunded during the last government. 21 While the PPCDAm is inter-ministerial and transversal, it does not address these issues. The following are considered in the National REDD+ Strategy: - Food Purchase Program(PAA) - National School Feeding Program(PNAE) - Policy to Guarantee Minimum Prices for Sociobiodiversity Products(PGPM-Bio) - National Plan for Agroecology and Organic Production (PLANAPO) - National Plan for Strengthening of Extractive and Riverside Communities(PLANAFE) - Technical Assistance and Rural Extension(ATER) 22 The integration with public policies could structure and improve the impact of the supported sustainable production activities. To prevent the risk of replacing Brazilian domestic investment in these public policies(the so-called additionality condition of the Amazon Fund), the scope of integration could focus on innovation. 23 through the PAA that are important and more accessible for most communities to sustain. Moreover, although the Amazon Fund did not grant carbon credits, it brokered public-private conservation partnerships. For example, in one project the Vale Fund of the mining business Vale would match funding from the Amazon Fund. This project was approved for funding of funding US$ 10,188,042 in 2016, but canceled in 2017. BNDES proposed support to the private sector within the component four related to economic instruments, but this has still been pending discussion and approval through COFA(Viergever and Santos 2019). Actors within BNDES and MMA sought the inclusion of private actors through risk-sharing funds and matching funds, for instance, for including traditional communities in production chains. These efforts reflect many state governments’ and corporate ideas of green growth; for example, the bioeconomy vision that aims to add value to forest and biodiversity products. For instance, at COP27, the Amazon governors launched a letter in support of a“framework that will allow us to monetize the forest as a new‘commodity’ in the market of environmental goods and services”(Consórcio dos Governadores da Amazonia Legal 2022). In this context, the definition of a participation strategy for the private sector to promote the objectives of the Amazon Fund, including benefit sharing, the importance of social safeguards, and the autonomy and ownership of PCTs. THE PRIVATE SECTOR AND SOCIAL SAFEGUARDS The Amazon Fund seeks to promote a paradigm shift towards sustainable development in the region. Given the conditions of inequality and poverty, measures should consider structural causes and prioritize PCTs and poor small producers. The Amazon Fund has put much emphasis on the creation of a“business environment” for the processing and marketing of forest products and the connection with market economies, for instance, through private certification schemes(Viergever and Santos 2019). However, there is a great potential of local markets, organic fairs, solidarity economies, and possible cooperation with public institutions 20 https://vgriscolegal.com.br/blog/grilagem-e-crimes-com-uso-do-car/; https://oeco.org.br/reportagens/as-falhas-e-inconsistencias-docadastro-ambiental-rural/. 21 https://apublica.org/2022/10/bolsonaro-destinou-zero-reais-apequenos-e-medios-agricultores-no-ultimo-ano/; https://midianinja.org/news/pela-segunda-vez-bolsonaro-negligenciaprograma-nacional-de-alimentacao-escolar-no-orcamento-federal/; https://www.brasildefato.com.br/2022/10/18/abandonada-nogoverno-bolsonaro-agricultura-familiar-resiste-a-desmontes-depoliticas-publicas. 22 ATER provides agricultural research, technology dissemination, technical assistance, rural extension, preparation and monitoring of projects, preparation of credit projects, and the production and sale of seeds. 23 Major budget cuts had in 2017 led to a temporary exception of the additionality principle for maintaining deforestation control and command. Also relevant in this connection is the monitoring of the Amazon Fund, which is currently aligned with the economic-growth paradigm. For instance, it measures the gradual growth in the relevance of the Amazon’s GDP in relation to the total Brazilian GDP, which reached a share of 8.9% in 2018 compared to 7.9% in 2009. However, the GDP is an insufficient measure to address issues such as income concentration, informal labor, environmental quality, health, education, social inequality, poverty, etc. Unsustainable ventures like mining, logging, and agribusiness are an important source of income in the region, though greatly concentrated and unsustainable. Similarly, the Amazon Fund measures patent applications filed by Amazon residents and the extractive products’ productivity and revenue – for instance, seeds, nuts, sustainable forestry – to consider their economic relevance(BNDES 2018). 24 Between 2009 and 2019, the Amazon Fund found a 16% increase in the volume produced and a 35% increase in the revenue generated by a basket of forest extractivist products(BNDES 2021). However, the absolute output and revenue does not indicate the relevance compared to other unsustainable extractive activities such as mining or ranching, nor the income distribution. In addition, the increased output of products such as açaí through widespread industrial production has created novel social issues and land conflicts, 24 Between 2009 and 2020, there was a 63% growth in the number of patent applications filed with the INPI by residents in the states of the Legal Amazon(BNDES 2021). 9

FRIEDRICH-EBERT-STIFTUNG – THE AMAZON FUND pointing to the importance of complex qualitative monitoring adapted to small-producer realities and risks. Considering the socioeconomic dimension of sustainable development, the monitoring system of the Amazon Fund could be revisited to add qualitative social indicators and baselines to reflect the social, environmental, and social dimensions of sustainable development. RECOMMENDATIONS It is important to acknowledge the consensus on Brazil’s national REDD+ framework based on previous consultations, social safeguards etc., especially regarding territorial rights and participation of PCTs. Moreover, the integration of the Amazon Fund with public policies to combat deforestation Prospects for Socioenvironmental Action The reopening of the Amazon Fund and overall environmental measures to address the damage done in recent years face great challenges. The budget restrictions left by the Bolsonaro government imply a budget squeeze for the environment ministry, though Marina Silva announced that Amazon Fund contributions will be outside the budget expenditure ceiling. To compare with the currently deposited R$ 3.7 billion in the Amazon Fund, the Annual Budget Proposal(PLOA) for the MMA and its associated environmental agencies was R$3.81 billion in 2015(US$0.75bn), and only R$1.72 billion(US$0.34bn) in 2021. Meanwhile, Brazilian agribusiness closed the first semester of 2022 with a surplus of US$ 71.2 billion. Moreover, Lula won by a small margin, with a broad alliance of parties, and the PT has already made concessions to other parties in the form of ministerial posts to secure a governable base in congress. On the other side, the ruralist caucus of agribusiness has grown, and is, with 280 members, the biggest faction. In addition, it is necessary to observe how the Legal Amazon’s governors, especially those most aligned with Bolsonarism(e.g., Rondônia), respond to the federal government’s measures to combat crimes against the forest and its traditional populations. In this connection, relative to deforestation and illegal mining, conflicts caused by megaprojects and legal mining have been neglected so far. During the Bolsonaro government, IBAMA granted the license for the paving of the BR-319 highway that links Manaus, Amazonas to Porto Velho, Rondônia, passing through primary forest, as well as the construction of an industrial waterway on the Tocantins River. Another project is the“Ferrogrão” railroad for the transport of soy from Mato Grosso to Pará. These plans present great risk to local biodiversity and communities and imply displacement and deforestation. They are endorsed by the state governments of Amazonas, Mato Grosso, and Pará, and have been denounced for violating territorial rights of local people and protocols of community consultation. The new government’s structure reflects and addresses the transversality of these conflicts around the environment and the participation of PCTs. The following bodies will be relevant in respect to deforestation, the demarcation of Indigenous and traditional peoples’ lands, solidarity economy, etc. - The Ministry of the Environment and Climate Change, with the Secretariat for Traditional Peoples and Communities and Sustainable Rural Development, a Bioeconomy Secretariat, and again the Brazilian Forestry Service, with now 16 tasks (seven under Bolsonaro), including the federal coordination of CAR, and national water security. - The new Ministry of Racial Equality will deal with policies related to Indigenous peoples and other peoples and traditional communities. - The Ministry of Agrarian Development and Family Agriculture will house INCRA and be responsible for agrarian reform, and for recognizing Quilombola territories and other traditional territories. - The new Ministry of Culture will assist the Ministry of Agrarian Development and Family Agriculture and Incra in land-regularization actions, to guarantee the preservation of the cultural identity of Quilombo communities. - The structure of the Ministry of Justice and Public Security includes competences to support conflicts involving Indigenous peoples and creates the Directorate of the Amazon and Environment in the Federal Police. - The new Ministry of Indigenous Peoples with its Secretariat for Environmental and Territorial Indigenous Management, managing PNGATI. - The new Ministry of Development, Industry and Foreign Trade integrates a Secretariat for Green Economy, Decarbonization, and Bioindustry. - The Ministry of Foreign Affairs resumes the Secretariat for Climate, Energy, and Environment. - The Ministry of Labor will have a Secretariat for Solidarity Economy. - The Ministry of Finance with sub-secretariat for Financing for Sustainable Development were created, responsible for international finance for sustainable development. Sources: https://www.ipea.gov.br/cartadeconjuntura/index.php/2022/07/comercio-exterior-do-agronegocio-primeiro-semestre-de2022/#:~:text=O%20agroneg%C3%B3cio%20brasileiro%20fechou%20o,acima%20dos%20observados%20em%; 202021; https://politicaporinteiro.org/2023/01/03/mudanca-do-clima-muito-alem-do-novo-nome-do-ministerio-do-meio-ambiente/. 10

PATHWAYS TO SOCIAL INCLUSION have been fundamental to its impact and will be even more important in the next phase of emergency and reconstruction measures. Despite the continuous push for carbon markets and forest offsets, the environmental integrity and regulation of the public instrument is fundamental to its democratic governance and control and to prevent abuse and greenwashing. To broaden access to organizations most in need of support, the reopening of the Amazon Fund is an opportune moment to reconsider BNDES’ bureaucratic criteria. While the different modalities with NGOs are a partial solution to reach small actors, access is still limited and highly bureaucratic. Training of the BNDES’ staff about the logic of these grants and the realities of Amazon populations is essential. The opening of a local representation of the Amazon Fund would improve the communication with those constituencies it is serving. In this connection, the local staff could more effectively accompany projects. The government’s participation within COFA should represent the new transversal government institutions listed in the text box above – especially the Ministries of Racial Equality and Indigenous Peoples. 25 The representation of agencies should aim to address the complex causes of deforestation and broader needs and demands of the regional population. Broadening and redefining the civil society participation in COFA is recommended to consider regional power relations and the empowerment of PCTs. The industry and corporate sector currently represented cannot be considered civil society, especially in the regional context of inequality and land conflict. As a public instrument for sustainable development, the Amazon Fund has an important role to play in breaking with the power relations underlying the traditional developmentalist paradigm. To do so, the Amazon Fund should increase the relative participation of Indigenous and traditional populations and include regional representatives from CONAQ, CNS, and the MST. The representation should aim at addressing the diverse conditions of family farmers, extractivists, artisanal fishers, and landless peasants. tivities could risk reproducing inequalities and neglecting the complex precarious conditions of rural families. In this regard, the Amazon Fund should consider a stronger integration with public policies aimed at rural small-scale production and food security in addition to environmental policies. Sustainable development in the Amazon requires a broad project to strengthen agroforestry and agroecology based on a long-existing tradition. This project should promote traditional knowledge and practices. For instance, the Amazon Fund, beyond funding separate projects, could promote regional exchanges, education, and training to support public policies. Monitoring and evaluation of the Amazon Fund is fundamental to ensuring its impact and social control. Hence, beyond income and productivity, it should include qualitative socioeconomic and environmental indicators that reflect the perspective of the target populations, considering issues such as poverty, inequality, land conflict, and food security. The Amazon Fund has been an international success case for Global South ownership over climate funds. Moreover, it has been a space of learning and led to the opening of Brazil’s national development bank to rural environmental issues as well as social movements. Its participatory governance and ways to reach many small organizations further proves that it is an essential space in the participatory creation of socioenvironmental-accessible finance models as well as innovative public policies and market interventions. It can now potentialize the political representation of PCTs and their role as subjects rather than objects in the sustainable economy of the Amazon. Autonomous sub-funds can improve access for and capacities of smaller organizations. For instance, separate funds for Indigenous, Quilombola, and extractivist communities would improve their control over programs, turning them from “beneficiaries” to agents of socioecological transformation in the region. Existing bureaucratic impediments to such measures should be reconsidered, keeping these social justice objectives in mind. The Amazon Fund should include direct measures to combat inequality, poverty, and food insecurity, which have become ever more critical in the region. A limited focus on income generation from sustainable production does not address the precarious context. Using narrow ecological criteria in granting support for income generation from sustainable ac25 https://politicaporinteiro.org/2023/01/03/mudanca-do-clima-muitoalem-do-novo-nome-do-ministerio-do-meio-ambiente/. 11

FRIEDRICH-EBERT-STIFTUNG – THE AMAZON FUND ANNEX Table 1 Timeline of the Amazon Fund Brazil and REDD+ 2007 Lula’s second term; Discoveries of the“Pre-Salt layer”; The Bali Action Plan (COP13); formal recog-nition of REDD 2008 National Climate Change Plan; Brazil ratifies the UN Declaration on the Rights of Indigenous People(UNDRIP) 2009 Election of Dilma Rousseff 2010 2011 2012 New Forest Code COP19: Warsaw Framework for REDD+ 2013 2014 2015 2016 2017 2018 2019 Dilma Rousseff is re-elected by a small margin Paris Agreement: REDD+ included in Article 5, Article 6 about market-mechanisms; National REDD+ Strategy(ENREDD+) Nationally Determined Contribution(NDC) Impeachment of President Dilma Rousseff; Michel Temer becomes Inter-im-President Public Spending Ceiling for 20 years Lula is arrested, imprisoned, and prohibited from running as the PT’s presidential candidate; Election of Jair Bolsonaro Elimination of participatory councils and closing of the Amazon Fund; Lula released from prison, his political rights restored 2020 2021 2022 Election of Lula as President 2023 Amazon Fund NGOs launch Pact for Zero Deforestation in Congress, demand the creation of the Ama-zon Fund; Brazil presents the Amazon Fund at COP13 in Bali Amazon Fund Created by Decree 6.527/2008; COFA defines first criteria for the application of resources Norway’s first donation KFW’s first donation; COFA includes the possibility of supporting initiatives that aggregate small projects Petrobras donation Lula’s second term; Discoveries of the“Pre-Salt layer”; The Bali Action Plan(COP13); formal recognition of REDD National Climate Change Plan; Brazil ratifies the UN Declaration on the Rights of Indigenous People(UNDRIP) Election of Dilma Rousseff New Forest Code COP19: Warsaw Framework for REDD+ Dilma Rousseff is re-elected by a small mar-gin Paris Agreement: REDD+ included in Article 5, Article 6 about market-mechanisms; National REDD+ Strategy(ENREDD+) Nationally Determined Contribution(NDC Impeachment of President Dilma Rousseff; Michel Temer becomes Interim-President Public Spending Ceiling for 20 years New Forest Code 12

PATHWAYS TO SOCIAL INCL A U N S N IO E N X Table 2 Composition of the Gross Added Value of Brazil and the states of the North Region 2018 ECONOMIC ACTIVITIES TOTAL OF THE ACTIVITIES AGRICULTURE AND LIFESTOCK Agriculture, including agriculture and postharvest support Livestock, includes support for livestock Forestry, fishing and aquaculture INDUSTRY Extractive industries Manufacturing industries Electricity and gas, water, sewage, waste management and decontamination activities Construction SERVICES Sales and repair of motor vehicles and motorcycles Transport, storage, and mail/courier Hospitality Information and communication Insurance financial activities and related services Real estate activities Professional, scientific and technical, administrative activities, and complementary services Administration, defense, education and public health, and social security Private education and health Arts. culture, sport and recreation, and other service activities Domestic services BRAZIL 100.0 5.2 3.5 1.2 0.5 21.8 2.7 12.3 2.9 4.0 73.0 13.0 4.4 2.4 3.4 7.0 9.8 7.9 17.4 4.5 1.8 1.2 NORTH REGION 100.0 9.4 4.5 3.2 1.7 26.0 6.2 9.1 6.4 4.3 64.6 11.9 2.9 2.6 1.1 2.5 9.2 3.8 25.9 2.3 1.2 1.1 RONDÔNIA ACRE 100.0 100.0 14.2 8.9 2.8 3.3 9.8 4.8 1.6 0.8 17.5 8.0 0.3 0.0 5.5 2.2 8.4 2.0 3.4 3.8 68.2 83.1 13.3 13.1 2.6 1.5 1.8 2.9 0.9 1.3 3.0 3.6 10.9 10.9 2.8 4.3 28.3 40.1 2.5 2.9 1.0 1.2 1.1 1.1 AMAZONAS 100.0 6.5 3.5 0.7 2.4 34.3 1.6 25.8 3.5 3.3 59.2 11.1 3.8 2.4 1.5 2.1 8.4 5.1 20.6 2.0 1.2 1.0 RORAIMA PARÁ 100.0 100.0 5.2 10.2 2.9 5.7 1.6 2.8 0.7 1.6 11.0 31.0 0.1 13.5 1.2 3.9 4.3 8.8 5.5 4.8 83.7 58.8 13.7 10.4 2.4 3.0 1.4 2.9 1.1 0.9 3.4 2.2 8.6 9.3 3.4 3.4 46.1 22.1 1.4 2,2 0.9 1.2 1.4 1.1 AMAPÁ TOCANTINS 100.0 100.0 1.9 13.1 0.5 6.8 0.4 4.9 0.9 1.4 11.7 12.3 0.1 0.5 2.5 2.5 5.0 4.0 4.0 5.2 86.5 74.7 12.5 17.1 1.6 1.8 5.3 2.1 1.1 1.1 2.2 3.5 11.0 7.7 3.0 4.2 45.9 31.2 2.1 3.3 0.7 1.2 1.0 1.5 13

FRIEDRICH-EBERT-STIFTUNG – THE AMAZON FUND Table 3 An incomprehensive overview of major NGOs and grassroots groups active in Brazil’s Amazon ONGs National Conservation/environmental NGOs Socio-Environmental Institute(ISA) Indigenous Missionary Council(CIMI) Pastoral Land Commission(CPT) Federation of Organizations for Social and Educational Assistance(FASE) Institute for Amazon Research(IPAM) Amazon Institute of Man and the Environment(IMAZON) Health and Joy(Saude e Alegria) Sustainable Amazon Foundation(FAS) Institute for Socioeconomic Studies(INESC) Land of Rights( Terra de Direitos) International Conservation NGOs in Brazil Conservation International(CI) Greenpeace Brazil Friends of the Earth World Wildlife Fund(WWF) The Nature Conservancy(TNC) (Source: own compilation) Local and national member organiza-tions and social movements National Council of Extractive Populations(CNS) Coordination of Indigenous Organizations of the Brazilian Amazon(COIAB) National Coordination of Rural Black Quilombola Communities(CONAQ) Landless Workers Movement(MST) Trade Union Federation(CUT) Union of Rural Workers(STTR) National Confederation of Agricultural Workers (CONTAG) and its regional chapters(FETAGRI) The Movement of People Affected by Dams(MAB) Small Farmers Movement(MPA) Movement of Artisanal Fishers(MPP) 14

REFERENCES Bidone, Francisco. 2022.“Driving governance beyond ecological modernization: REDD+ and the Amazon Fund.” Environmental Policy and Governance 32(2): 110–121. BNDES. 2018.“Amazon Fund Activity Report 2017.” BNDES. 2021.“Amazon Fund Activity Report 2021.” Correa, Juliano et al. 2020.“Evaluating REDD+ at subnational level: Amazon fund impacts in Alta Floresta, Brazil.” Forest Policy and Economics 116: 102178. Crisostomo, Ana Carolina, and Gustavo Machado. 2019. Mid-Term Evaluation Report of the Effectiveness of the Amazon Fund. Thematic Study of Projects Supporting the Rural Environmental Registry(CAR). Foss, Per-Kristian. 2018. The Office of the Auditor General of Norway’s investigation of Norway’s International Climate and Forest Initiative. https://www.riksrevisjonen.no/globalassets/reports/en-2017-2018/ norwayinternationalclimateandforestinitiative.pdf(Accessed August 27, 2019). Garcia, Jose Javier Gómez. 2019. Mid-term Evaluation Report on the Effectiveness of the Amazon Fund 2008-2018. ECLAC. Gomes, Antonio Manoel Timbó Lima, Gersem Baniwa, and Ricardo Wahrendorff Caldas. 2021. Avaliação de Efetividade de projetos Indígenas no âmbito do Fundo Amazônia/BNDES. Deutsche Gesellschaft für Internationale Zusammenarbeit – GIZ GmbH. https://www. fundoamazonia.gov.br/export/sites/default/pt/.galleries/documentos/ monitoramento-avaliacao/5.avaliacoes-externas/Relatorio-EfetividadeIndigenas.pdf(Accessed January 20, 2023). Kadri, Nabil Moura et al. 2020.“Fundo Amazônia: financiamento climático em prol da conservação e do desenvolvimento sustentável da Amazônia.” KfW. 2016.“Ex post evaluation – Brazil. Programme/Project: Amazon Fund(BMZ no.: 2008 66 830*, project I) and Amazon basin(Fast Start; BMZ no.: 2010 52 026, project II).” Ribeiro, Cristiane, Iara Pietricovsky, and José Antonio Moroni. 2022. Fundo Amazônia: aprendizados, resultados e caminhos para a retomada. Instituto de Estudos Socioeconômicos – Inesc. Viergever, Marcel, and Priscilla Santos. 2019. Mid-Term Evaluation Report of the Effectiveness of the Amazon Fund. Study of the Amazon Fund’s Benefit Distribution. PATHWAYS TO SOCIAL R I E N F C ER LU EN SI C O E N S 15

PATHWAYS TO SOCIAL INC IM LU P S R IO IN N T ABOUT THE AUTHOR IMPRINT Claudia Horn is a sociologist and fellow at the London School of Economics and Political Science, where she completed her PhD on international development cooperation in the Brazilian Amazon and the formation of green capitalism. She has worked as Project Manager United Nations and the Global South for the Rosa Luxemburg Foundation’s New York office and as an advisor to the municipal government in Belém, Pará. Her work focuses on social justice and international climate, trade, and natural resource politics. Friedrich-Ebert-Stiftung(FES) Brazil Av. Paulista, 2001- 13° andar, conj. 1313 01311-931• São Paulo• SP• Brazil Responsibles: Christoph Heuser, Head of FES Brazil desk Gonzalo Berrón, Project Director, FES Brazil Contact: https://brasil.fes.de fesbrasil@fes.org.br Commercial use of media published by the FES is not permitted without the written consent of the FES. The views expressed in this publication are not necessarily those of the Friedrich-Ebert-Stiftung(FES). 17 978-65-87504-73-5

THE AMAZON FUND: PATHWAYS TO SOCIAL INCLUSION Brazil’s Amazon Fund has restarted its full operation this year, seeking to fight deforestation and promote sustainable development by making the alternative economic use of the standing forest viable on large scale. However, today these alternatives are ever more threatened by mining, agribusiness, and logistics ventures, while invasions and food insecurity are widespread. The deforestation crisis and violence against indigenous and traditional people of the recent years highlight that land conflict and environmental degradation closely relate to the criminalization of socioenvironmental organizations and social movements. Moreover, the systematic neglect of small producers’ demands for territorial rights, land reform, health, education, and food security undermines traditional knowledge, ancestral forms of production in line with the reproduction of the forest, and efforts to innovate alternatives such as agroecology and local solidarity economies. How can the Amazon Fund, managed by Brazil’s Development Bank(BNDES) address this context? While convinced that there is no one solution, this publication considers the existing experience and learning processes of the previous years of implementing the Amazon Fund—the only major fund for Reducing emissions from deforestation and forest degradation (REDD+) that is administered by recipient agencies. It examines gaps and inconsistencies that limit the instrument’s access and integration with relevant socioenvironmental policies and institutions. The study invites a discussion about how the Amazon Fund can better strengthen indigenous and traditional organizations not only as project beneficiaries, but as active decision-makers. Further information on the topic can be found here: https://brasil.fes.de