Five Facts to Know: The Amazon Summit and Deforestation

On August 9, the Amazon Summit called by Brazil’s President Lula da Silva concluded. Held within the framework of the Amazon Treaty Cooperation Organization (ATCO), which groups Bolivia, Brazil, Colombia, Ecuador, Guyana, Peru, Suriname and Venezuela, the summit in Belém, Brazil was the first high-level meeting in 14 years. With increased international focus on preventing deforestation in tropical rainforests, President Lula seized the opportunity to reaffirm Brazil’s intention to lead in promoting the role of tropical forests in preserving vital biodiversity and carbon sinks as a global public good, calling for efficient mechanisms to remunerate domestic and regional actions. While the summit failed to deliver concrete commitments to end deforestation by 2030, it was seen as a major instrument for Brazil to exert geopolitical influence, including by generating goodwill in Europe to unlock the long-delayed EU-Mercosur association agreement.

Here are five facts to know about the Amazon Summit:

1. The Summit was relaunched by President Lula after a 14-year hiatus.

The Amazon Cooperation Treaty Organization was established in 1995 to foster cooperation among Amazon countries, namely its eight member countries: Bolivia, Brazil, Colombia, Ecuador, Guyana, Peru, Suriname and Venezuela. ACTO had not met under a summit format for 14 years until Brazil’s President Luiz Inácio Lula da Silva called for the recent re-launch to bolster cooperation among Amazon countries. France and Norway, were also represented at diplomatic levels—the former, with French-Guyana, has an overseas territory in the Amazon region, the latter due to the reactivation of the Norway-led Amazon Fund, which foresees the transfer of substantial results-based financial resources, which had been frozen during Mr. Bolsonaro’s presidency. And the Presidents of the Republic of Congo and the Democratic Republic of Congo (DRC) were also present, signaling Lula’s intention for Brazil to expand—and lead—forestry-related action globally.

President Lula’s prominent efforts to curb Amazon deforestation could also constitute a major geopolitical card as it may lead to finally unlocking the long-standing negotiations on an EU-Mercosur (and EFTA-Mercosur) association agreement. The Amazon has been a long-standing central theme in—if not an excuse for—delaying the conclusion of the agreement. The most significant sticking point is Brazil’s opposition to the sanctions outlined in the case of non-compliance with the agreement.

The EU Regulation on deforestation-free supply chains, which entered into force in June 2023, will also have clear implications for international supply chains which touch upon the Amazon and Cerrado regions. It requires companies to meet strict conditions before placing commodities and products on the EU-market, including a 2020 deforestation-free cut-off date, compliance with local legislation, and due diligence statements including verification.

2. Concerns grow over tropical rainforests and threats to their role as vital carbon and biodiversity reserves.

The UN estimates that between 1990 and 2020 some 420 million hectares of forest—an area larger than the EU—has been lost through conversion to other land uses. Agricultural expansion is the biggest driver of deforestation, with large scale commercial agriculture (cattle ranching, and cultivation of soya bean and palm oil) accounting for 40% of tropical deforestation and local subsistence agriculture for 33%. The multiplication of (mainly climate change driven) forest fires, pests, diseases, invasive species, drought, and additional adverse weather events account for the rest.

New data from Global Forest Watch suggests that tropical forest loss was 10% higher in 2022 than in 2021 despite international commitments. While more than 100 world leaders pledged to end and reverse deforestation by 2030 at UNFCCC COP26 in 2021, just one year later the Forest Declaration Assessment underlined that the world was already off-course, and that in order to halt deforestation completely by 2030, a 10% annual reduction of deforestation was needed. The lack of binding enforcement methods makes halting land degradation and deforestation particularly challenging.

This is of particular concern since forested ecosystems contain most of the global terrestrial biodiversity, and primary forests in particular are home to species that are unique to these ecosystems. Tropical forests are indeed both a vital source of biodiversity and an important carbon sink, removing 2 billion tons of CO2 every year—close to 5% of the world’s greenhouse gas emissions—underlining the role of tropical forests in mitigating climate change.

3. Under economic pressures, the Amazon is becoming a Net CO2-emitting region.

Annual Amazon deforestation levels in Brazil alone increased by 75% between 2019 and 2022, with record losses of 13,000 km2 in 2021—primarily due to agricultural expansion. Experts estimate that deforesting 20% of the Amazon could push it past a tipping point, triggering the release of more than 90 billion tons of CO2—a staggering 2.5 times more than annual fossil fuel emissions—and generating irrecoverable loss of biodiversity. As a result, the Amazon region is now becoming a net CO2 emitting region, with CO2 releases exceeding removals.

Beyond agricultural expansion, oil and gas exploitation is also proving contentious, with opposing approaches across the region. While Brazil expects revenues from national oil company Petrobras production in the Amazon delta to fund a portion of President Lula’s USD 350 billion “growth acceleration plan,” Colombia pursues a more aggressive position preventing all new oil and gas exploration. While Ecuador voted to stop oil exploration in the Amazon’s Yasuní national park, home to two uncontacted indigenous tribes, Guyana aims at becoming one of the world’s large oil exporters.

4. The Summit's declaration failed to comitt to end deforestation in the region by 2030.

The summit concluded with a low-ambition Belém Declaration, a 113-point text in which the eight countries committed to prevent the Amazon from “reaching the point of no return,” agreeing to coordinate on issues like health, food security, water management, environmental policing, and sustainable development, giving special attention to protecting the rights of indigenous communities. They also agreed to establish a dialogue to speak with one voice and press their collective position in international forums and multilateral institutions.

Its main goal, however, of reaching a common position on halting illegal deforestation by 2030 ahead of UNFCCC COP28, was absent from the declaration. Brazil and Colombia, which together account for more than 70% of the Amazon region, had agreed on the goal to end all deforestation by 2030. Bolivia’s strong opposition, however, was joined by Venezuela and derailed the process. Bolivia, which accounts for 9% of all primary forest loss across the globe, saw an increase of 32% in agriculture-driven deforestation in the country over the past year, mainly due to soya planting. The summit also failed to address accelerating land degradation in Brazil’s Cerrado region, where agriculturally driven deforestation increased by 15% over one year. The summit, however, urged OECD countries to consider the Amazon as a global common good, and hence to step up their financial commitments to preserve it in recognition of the environmental, biodiversity, and climate services the region renders to humanity.

5. Brazil's claim to renewed global climate leadership was highlighted.

With some early success in reducing deforestation levels in the Amazon region by 33% in the first half of 2023 as compared to the same period in 2022, President Lula da Silva has the credentials to lead Amazon countries (and possibly a broader coalition of tropical forest countries) at UNFCCC COP28 in Dubai and on course toward Brazil’s hosting UNFCCC COP30 in Manaus. Brazil’s G20 Presidency in 2024 will constitute an additional platform for the country to lead on forest preservation.

The billions needed to protect tropical forests will result in increased political pressure to operationalize action under both the UNFCCC Paris Agreement and the UNCBD Kunming-Montreal Global Biodiversity Framework.

  • Within the UNFCCC framework, more focus is to be expected on the implementation of cooperative approaches between countries as foreseen under Article 6.2 of the Paris Agreement via bilateral agreements that would see the use of Internationally Transferable Mitigation Outcomes (ITMOs) and Article 6.4, which aims at building a crediting framework similar to the one that prevailed under the Kyoto Protocol’s Clean Development Mechanism (CDM) for results-based payments.
  • Under Target 19 of the UNCBD Kunming-Montreal Global Biodiversity Framework, developed countries are called to “fulfill their climate financing obligations and to contribute to the mobilization of USD 200 billion per year by 2030…to support the implementation of national biodiversity action plans and strategies through the provision of new, additional, predictable, and adequate financial resources.” At the Amazon Summit the Taskforce on Nature Markets released practical recommendations for policy makers to price the use of nature into the economy.

For companies, it will be particularly important to monitor the increased focus on the nexus of climate and trade, global developments around deforestation-free supply chains, and defunding deforestation. The design of both rules-based and voluntary carbon trading mechanisms could eventually contribute to corporate net zero strategies, once their own abatement potential has been exhausted.