Can Brazil unlock the economic potential of the Amazon rainforest?

Brazil has major potential to attract global investments through the huge Amazon rainforest, but the solutions being considered are not associated with traditional development projects.

"The Amazon is essential for the world because it guarantees global climate stability. Faced with this reality, the whole world, not just Brazil, needs to find solutions to remunerate this, to remunerate this global supply of services that the forest provides, through investments that guarantee the preservation of the rainforest," André Guimarães, executive director of the NGO Amazon environmental research institute (IPAM), told BNamericas.

"The Amazon is an asset that can put Brazil on the global investment map, but at the same time it can take Brazil off the investment map if the country doesn't adopt measures to protect it and reduce deforestation," said Guimarães.

Amazon is the largest tropical forest in the world, spreading across the basin of the 6,400km Amazon river, covering approximately 6.74 million square kilometers in Brazil, Bolivia, Colombia, Ecuador, Guyana, Peru, Venezuela and Suriname. Around 62% of the rainforest is located in Brazil.

"The Amazon is a highly paradoxical situation. If we were to consider that the Amazon region is a single country, it would be the nation that generates the most greenhouse gas emissions in the world with the lowest economic return. Other countries that generate high levels of emissions have economic gains on the other hand, which isn't the case with the Amazon," Beto Veríssimo, a senior researcher and co-founder of the Amazon institute of people and environment (Imazon), a think tank and NGO, told BNamericas.

"The positive side of this is that it's not difficult to solve the problem. Emissions in the Amazon are generated by deforestation and fires. By combating that, most of which is caused by illegal activities, we reduce emissions drastically with no negative economic impact. In other countries, when we talk about reducing emissions, we're talking about replacing important economic activities," said Veríssimo.

The Brazilian government has been trying to increase inspections lately to reduce deforestation and has also been trying to attract funds to invest in the preservation of the Amazon, including with the participation of development bank BNDES and by attracting other multinational banks and countries to the efforts.

Economic solutions for the region, however, involve initiatives that are not associated with development projects in traditional sectors.

"It's a mistake for Brazil to move forward with infrastructure projects in the region, such as paving highway 319 [linking Manaus and Porto Velho] or even the Ferrogrão rail project. Such projects actually represent a great risk of increasing deforestation of the Amazon," said Veríssimo.

The most viable economic solutions for the region involve developing the jungle's potential in the carbon credit market as well as projects associated with biotechnology, according to experts. 

These specialists are also opposed to the advance of oil and gas exploration that could affect the region's ecosystem, amid discussions in the Brazilian government about allowing the exploitation of oil resources in the environmentally sensitive Equatorial Margin, off the coast of the Amazon river delta in Brazil's north.

"The issues associated with the exploitation of oil and gas are the target of intense economic lobbying, but I believe that the government should think more carefully about this situation because we're possibly talking about potential for oil and gas production that will only come to fruition in over 10 years, when oil may not even be so important in economic terms," said Veríssimo.