By Walter Vergara

Vice President, Latin America Programs
Climate Institute

The Amazon ecosystem hosts the largest tropical rainforest on the planet, unique savannahs, and an extensive riverine network. It covers 750 million hectares (Mha).

Its complexity and diversity are unparalleled, the refined result of an exquisite evolutionary process.  Its functioning is vital to life on earth. 

For example, it is an essential component of the global carbon cycle, which is a determining factor of global climate, storing about 123 billion metric tons of carbon in its biomass1.  It remains a carbon sink with an estimate annual removal of carbon from the atmosphere of between 0.2 and 0.5 billion metric tons2. The Amazon ecosystem is also the largest repository of global biodiversity housing over 3 million species or about 25% of global terrestrial biodiversity, including over 15,000 tree species3 and more fish species than in any other river network. It generates half of its rainfall and commands 20% of the world’s flow of fresh water into the oceans, contributing to the delicate balance required by coastal ecosystems and ocean circulation patterns.  It is home to about 30 million people, most in urban areas and many unique indigenous and traditional cultures.

All this wealth is now at stake.  Deforestation remains unabated: 2 Mha were lost in 2022, a six-fold increase since 2010.  Reductions in vegetation continue to be catalyzed by land speculation, increasing global demand for food and fiber commodities and expansion of the road infrastructure to connect settlements and markets.  The existing governance structure has not been able to stop deforestation.  

Continuing reductions in forest cover may trigger feedback mechanisms affecting rainfall patterns, extending droughts and promoting fires4. These changes could alter the dynamics of the entire ecosystem switching the equilibrium point toward savannah conditions, a dieback5, with major consequences for the regional and global environment6.  

What to do? While the problem is immense and the root causes of the devastation many, there is room to envision a different model of use of the basin, centered on its assets and potential while delivering on human welfare needs, climate and biodiversity goals.  

First, use carbon markets to fight deforestation where it matters most.  The overall value of the carbon stock in the basin is immense; at $10/ton of carbon, the stock would be valued at $1.2 trillion.  However, to date, the carbon market has not been a significant factor in arresting deforestation. For this to happen, there is a need to restructure its operation.  It needs to reflect risk pricing and function under self-contained, region-wide governance.  

While attention has been given to risks from the perspective of the purchasers7 much less has been allocated to the risk of deforestation.   Forests at the edge of the deforestation front, being more exposed to the risk, should be priced at a considerable premium.  These front-edge forests are what prevent further encroachment.  Avoidance of this domino effect should be intrinsic to the pricing of carbon. 

Carbon concessions, with a strong involvement of local communities, can offer a model of local governance and management that grants the use of land for the specified purpose of maintaining or increasing its carbon stock, like lumber concessions but where carbon stocks replace timber production as motif.  Under a risk-based market valuation concessions at the deforestation front would be much more valuable than those in background areas less susceptible to imminent destruction but whose stability depends on the integrity of forward areas (figure 1). This is akin to premiums offered for lumber concessions rich in valuable hardwoods. 

Can we steer away from disaster in the Amazon? by Walter Vergara ( Vice-president. Climate Institute.
Fig 1: Conceptual diagram showing the relative price of carbon in standing biomass versus distance from the deforestation front. Total relative carbon market value in area A equals the total relative carbon market value in area B.

The value of the stock in the entire basin would remain the same while a strong financial deterrence would be in place where it matters most. Highly vulnerable areas would be populated by “guardian” trees commanding each up to thousands of dollars, in hectares worth millions, as long as they are on the ground. It is in the interest of the concessionaries that they remain so. A basin-wide approach would minimize distortions and enable deployment of financial resources toward hot spots of deforestation.

Second, shift to a mobility system based on electric fluvial transport for passengers and cargo. The region is crisscrossed by waterways that could be used to provide efficient and cost-effective connectivity.  The Amazon basin has over 50,000 kilometers of rivers navigable to boats weighing up to 1,000 tons8.  Historically, river navigation had been the key transportation system in the basin for movement of passengers and cargo.  However, the focus, since the 1960s, on road transport has led to irreversible damages9

 It has been estimated that by mid-decade, 10,000 km of roads will be built or improved in the Amazon basin10. The expanding network of surface roads will continue to permanently alter the structure and integrity of the Amazon.  While there is scant systemic analysis of the costs and benefits of road transport, there is sufficient evidence that in addition to the environmental damage, many roads are not even justified from a financial perspective.  A study11 concludes that, for example, rebuilding BR 319 in Brazil would result in costs that surpass by 15 times any anticipated benefits.   In Peru, the “Inter-oceanica” touted as an investment in economic integration at a $4.5 billion cost, has triggered permanent land use degradation, illegal mining, social conflict (prostitution, alcoholism), introduction of alien species, and further road construction leading to additional deforestation.  But reports indicate that the highway has failed to significantly increase the commerce between Brazil and Peru12.

What if an emphasis is placed on fluvial-based transportation, as the primary choice for mobility?  After all, most of the settlements in the region are in riparian areas and fluvial transport is as much as an order of magnitude cheaper than road alternatives under a variety of circumstances13.  A typical river-going ship can carry 1000 tons of cargo which would require at least 50 trucks to mobilize.  The switch brings significant energy savings.  

Further, advances in electric drives presage rapid improvements in autonomy and cost efficiency of electric barges and river cargo boats14.  Mobility reliant on river-based systems powered by electric drives has an enormous potential in the Amazon basin. No road infrastructure would be able to compete with the cost and energy efficiency advantages of fluvial transport in the basin.   

Third, develop and deploy a blueprint for sustainability of human settlements that favors fluvial connectivity, promotes electrification of economic activities and “island” power grids, independent of access to a national grid.  It has been argued that the coupling of power generation and electric transport offers cost competitiveness and gains in efficiency in Latin America15. The case is strengthened for those areas further from the grid, where energy security, energy efficiency, improved urban air quality and load balancing can be enhanced by linking renewable power supply with transport, fluvial and urban, while meeting all other energy demands.   

Think of electricity storage depots instead of fuel tanks, all-electric surface and fluvial transport fleets instead of diesel trucks and boats, vehicle to grid links instead of fuel stations and self-generation of power. The gradual transformation of towns to an electrified future powered by locally sited renewables makes economic and environmental sense15. The towns in the basin could become human activity islands of sustainability with low footprints on the surrounding ecosystem.

Fourth, engage in a rapid expansion of permanent conservation refuges, from the current estimates of 40%16 to 50% of the legal area of the Amazon basin, based on their unique contribution to global biodiversity and the urgency to safeguard the cultural heritage of the region17.  Even if deforestation is stabilized, degradation of forests could continue to affect its biological and cultural diversity. Today, about one third of the remaining forest shows signs of degradation, leading to a weakened ecosystem and loss of biodiversity.18 To prevent further deterioration, it is key to achieve complete exclusion from infrastructure development: no transmission or road infrastructure, and no non-indigenous use of natural resources, in conservation areas.  

Include also a restoration effort of degraded or abandoned pastures where agroforestry and sylvo-pastures offer alternatives to expansion of agriculture19. There is an estimated 140 Mha of degraded land just in Brazil. Of these, about 30 Mha are severely degraded pasture areas. Restoration of degraded land makes imminent sense and will reduce pressure on the ecosystem.  

These are not impossible things to do. The proposed actions fit with the character of the basin; collectively, these are economically rational actions. In the end, the planet and its occupants will pay hefty consequences if the current path to disaster is not averted.



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  4. Carlos A. Nobre, Gilvan Sampaio, Laura S. Borma, +2 , and Manoel Cardoso. PNAS. September 16, 2016 113 (39) 10759-10768.
  5. Vergara W., and S. Scholz (ed). Assessment of the Risk of Amazon Dieback. (World Bank, 2011)
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  7. Bolton P., and M. Kacperczyk. Do investors care about carbon risk? NBER Working Paper Series. 2020
  8. Dominguez C. The Importance of Rivers for the Transportation System of the Amazon. IDEAM. rivers.pdf   2013
  9. Botelho J., et. al. Remote Sens., 14 (15), 3625 (2022 ) 
  10. Vilela T., et. al. PNAS 117 (13) 7095-7102 March 16 (2020) 
  11. Fearnside P.M. and P.M. Graca. Environmental Management 38 (5): 705-716 (2006). 
  12. EJA (Environmental Justice Atlas). Interoceanica as a driver of deforestation and land use change in Madre de Dios, Peru. , 2018
  13. Paddeu D., Calvert T., Clark B., and G.P. Parkhurst. 2019   New Technology and Automation in Freight Transport and Handling Systems New Technology and Automation in Freight Transport and Handling Systems. (Government Office for Science. University of the West of England, Bristol, 2019).
  14. Rapid Transition Alliance. 2022. Making waves: electric ships are sailing ahead. 
  15. Vergara W., Fehnman J and Silvia Silva, 2021. The opportunity, cost, and benefits of the coupled decarbonization of the power and transport sectors in Latin America and the Caribbean. (The Climate Institute, 2021). ISBN 9781637959701  
  16. RAISG. Amazonía 2019 – Áreas Protegidas y Territorios Indígenas – RAISG=
  17. Wilson E.O., 2016. Half-Earth. Our Planet’s Fight for Life. (Liveright, 2016). ISBN 978-1-63149-082-8. 
  18. Lapola D.M., Patricia P., Barlow J., Aragao L., et. al., Science 27 January 2023. Vol 379, Issue 6630. http://doi:10.1126/science.abp8622 
  19. Ruiz J.P. and G. Rudas, 2022. Los sistemas agropastoriles: un camino para tansformar la ganadería extensiva, reforestar y enfrentar el cambio climático en Colombia. In Colombia País de Bosques (ed. M. Rodriguez and M.F. Valdes. (Alpha Editorial).  ISBN 9789587787368.

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