07/08/2011 12:49 pm ET Updated Sep 06, 2011

Amazon Rainforest Protection: How Much Will It Cost?

From Daniel Cooney of Center for International Forestry Research blog:

JUMA RESERVE, Brazil -- Would $33 a month do? That is the amount a project in the Amazon pays each of 7,600 families in exchange for a pledge to protect the rainforest. The stipend is bundled together with other development aid, including better education, health care and livelihood support.

Families complain it is not enough, and say they need the equivalent of an official minimum salary - more than 10 times the current handout.

The question of how much money it will take to protect forests in developing countries is becoming increasingly pressing with billions of dollars being pledged through a global mechanism for Reducing Emissions from Deforestation and forest Degradation (REDD). Advocates hope it will offer the world one of the cheapest and fastest ways to slow climate change.

Deforestation accounts for an estimated 12-18 percent of the world's carbon emissions - roughly the same as the world's entire transport sector. But forests are being destroyed at a fast clip - more than 13 million hectares annually, an area roughly the size of England.

The initiative in the Amazon, known as Bolsa Floresta, is one of the world's largest programs of payment for environmental services in terms of the geographic size of the project area. It covers 10 million hectares of Brazil's part of the Amazon. It is being closely watched for lessons that could be applied to REDD projects worldwide.

Virgilio Viana, director-general of Brazil's Amazonas Sustainable Foundation (FAS), which manages the project, said he is confident he has the right mix of cash handouts and other development assistance.

"I see REDD in the Amazon as having four components. One is cash payment. But that is not the most important one. The reason for having a cash payment is to build trust because people are very frustrated with promises that have not been fulfilled, especially those in the very middle of the forest," he said in an interview at his home in Sao Paulo, Brazil.

The second component focuses on income generation, such as developing cooperatives for the trading of Brazil nuts, so as to make the "forests worth more standing than cut." The third promotes better health care and education. The fourth works to empower the local communities.

"For me REDD has to have this holistic approach," Viana said.

But for some participants of the program, the handout is seen as an insufficient incentive. Daniel Ribeiro, leader of a tiny forest hamlet called Boa Vista deep in the heart of the Amazon, said the monthly payment was a "good idea" but "not enough."

Riyong Kim Bakkegaard, who has led a team of researchers in the Amazon for the past two months, in association with a global REDD research initiative for the Center for International Forestry Research (CIFOR), said she and her team have seen cases of people extracting timber, which may suggest deforestation in excess of the goals of the Bolsa Floresta program.

"The idea behind payments for environmental services is to provide an incentive to people. But the problem that we can see is that sometimes it is not big enough to become an effective incentive," Bakkegaard said.

In addition to the research being done for CIFOR's Global Comparative Study of REDD+, Bakkegaard has additional questions she asks respondents, including how much it will take for them not to deforest at all.

Bakkegaard said that households' stated compensation needs to forego further harvesting may be significant. Although it is early to conclude on the reasons behind these stated figures, one issue of concern is what could happen to local economies and communities dependent on transfers, especially in remoter villages that would previously have relied on the bartering of goods.

João Tezza Neto, the Scientific and Technical Director at FAS, said paying families what they are asking for - in excess of 500 reais (US$330) monthly - could lead to new social problems, including alcoholism.

The program's second component, which helps local communities increase their income through livelihood projects and skills training, may reduce the risk that a culture of dependency takes root. "It is necessary to build capacity in the communities to generate wealth from the forest," he said.

Further complicating the issue of payments is the question of whether everyone should be paid the same amount, Bakkegaard said. "A uniform payment is not going to work for a person who intends to start a ranch with thousands of heads of cattle compared to the person who has no intention of expanding," she said. "One is going to feel much rewarded, the other is going to feel this is doing nothing for me so I need to keep doing what I do to make my living."

Whatever the optimum amount is to maximize a reduction in deforestation, preliminary data on Bolsa Floresta shows a decline in forest fires in the protected areas compared to neighboring regions, as well as a small reduction in the rate of deforestation in the three years the program has been running, according to Neto.

Read more from the CIFOR Forests blog here.