Why Conserving and Protecting the Amazon Forest Is More Profitable

In Brazil, economic growth is often linked to clearing the Amazon rainforest for farming and mining. The rainforest is one of the world’s most vital ecosystems, home to 10% of all known species. However, it is estimated that 26% of the forest has already been cleared due to agricultural expansion, mining, and other economic activities.

This ongoing practice is unsustainable and cannot continue. In 2021, deforestation and land use in the Amazon accounted for significant carbon dioxide emissions, representing 67% of Brazil’s total emissions. If this trend persists, the Amazon could lose an additional 59 million hectares by 2050, potentially turning from a carbon sink into a source of CO2 emissions for the country.

The WRI article notes that resource exploitation of the Amazon does not translate to economic benefits for the indigenous and local people who depend on it for their livelihoods; in contrast, the region is home to the poorest and most underserved in Brazil. The current trend of clearing the Amazon will transform the rainforest from the world’s carbon sink into a source of emissions, worsening climate change and disrupting precipitation across South America.

New economic model for the Amazon

The report, New Economy for the Brazilian Amazon, produced by WRI and The New and New Climate Economy in partnership with leading research institutions, introduced a roadmap for a new economic model for Amazon—a climate-friendly, deforestation-free, low-carbon scenario compared to business as usual.

The “new economy” model results from two years of research that simulated how the economy can grow equitably across all major sectors—agriculture, energy, transportation—benefiting Indigenous and local communities compared with the current carbon-intensive economy.

The report’s analysis shows how Brazil can improve its economy by transforming and restoring degraded land to sustainable agriculture and livestock production, investing in Indigenous people’s bioeconomy, leveraging low-carbon technologies, including energy and transportation, and creating thousands of new jobs without further deforestation.

The infographic from the World Economic Forum (WEF) below highlights the economic advantages of the “new economy.”

The report notes that achieving this requires four vital shifts or actions:

1. Expand the bioeconomy or bio-based economy of the Indigenous people and local communities. This is an untapped economic potential for the country, with the industry currently valued at BRL 12 billion (US$ 2.5 billion). Conservative estimates show that the bioeconomy could grow to BRL 38.5 billion (US$8 billion) by 2050 based on the analysis of just 13 native products, including acai fruit, acai palm heart, cocoa, nuts, babassu coconut, babassu oil, cupuacu, honey, rubber, buriti, urucum, copaiba and andiroba.
   
   The WRI article notes that scaling Brazil’s bioeconomy will require replicating and expanding existing productive arrangements that national and subnational governments must promote through financing and incentives. The private sector also needs to increase its capacity for innovation and become a driver of the new economy, especially the bioeconomy, with new financial arrangements that can support the expansion of forest-friendly goods.
2. Transform agricultural and livestock production. This includes measures like recovering degraded pastures, applying agroforestry, which combines native trees with commercial crops to reduce soil erosion, and integrated crop-livestock-forestry.
3. Decarbonising energy and transportation is essential to reducing Brazil’s emission goals. The report points to solar power as the primary power source, which could meet 55% of electricity demand by 2050 under the new economic model. Solar panels could be installed as floating panels in existing hydroelectric dams and on degraded pasture land close to transmission structures.
4. Align finance with climate-friendly development. Transitioning to a low-carbon economy requires an investment of 1.8% of Brazil’s annual GDP, compared to the 1% under BAU. The report argues that this investment is far lower than the cost of inaction, which will be twice as high.

Learn more about the report New Economy for the Brazilian Amazon or read the executive summary.

Alliance to safeguard the Amazon rainforest

The Amazon Sacred Headwaters Alliance is working to protect 35 million hectares of rainforest in the Amazon through a new bi-regional protected zone, a collaboration between 30 Indigenous nations across the Amazon basin.

In a World Economic Forum video titled “Restoring Amazon ecosystems is better for the economy than ranching or logging,” Atossa Soltani, Director of Global Strategy for the Amazon Sacred Headwaters Alliance, explains how restoring the Amazon’s ecosystems is more beneficial for the economy than ranching or logging.

Ecopreneurs working to promote the bioeconomy and restore the Amazon forest

Ecopreneurs are emerging to promote the bioeconomy and restore the Amazon rainforest. This growing movement, driven from within local communities, aims to offer a sustainable alternative to traditional practices and mitigate deforestation by developing eco-friendly bioeconomic models.

These models focus on preserving and restoring the Amazon while using its forest resources sustainably and providing livelihoods for its residents.

A partnership between the IDB Group, 1t.org, and UpLink has identified 15 leading start-ups and organisations in this movement and supports them in accelerating and scaling their impact.

Get to know the 15 UpLink Trillion Trees Top Innovators of the 2022 Amazon Bioeconomy Challenge.