Alexandre Martinez is instituting financial and legal mechanisms to promote private conservation and effective land management in Brazil. Despite growing interest in using cash incentives to encourage environmental conservation, the government’s related tax schemes have been rendered ineffective by misuse and corruption, and as a result, have failed to stem the growing threats to the country’s privately owned native forests. Beginning in the state of Parana and now expanding to other states throughout the country, Alexandre has developed a series of programs and financial mechanisms to ensure that all parties benefit from land conservation.
The New Idea
Alexandre is working to align the interests of Brazil’s private landholders, state and federal governments, and land management bodies, to promote improved land conservation. By using cash incentives to drive private conservation in a way that is both effective and sustainable, he has made the structures envisaged by Brazilian law environmentally beneficial. He works first and foremost with what are known as Private Natural Heritage Reserves (RPPN units)—private land permanently designated for conservation purposes. As the most widely recognized of the government's incentive schemes, the RPPN units are meant to encourage farmers to conserve a portion of their land in exchange for a value-added ecological tax, provided by the federal government. While sound in theory, however, the tax—known as the ICMS Ecologico—is channeled first through the municipalities, and due to widespread corruption, rarely reaches its intended destinations. Alexandre has developed a series of reforms to fix the system, and to ensure that all parties win from private conservation. Under his model, 50 percent of the earmarked funds go to the municipality, while the other 50 percent are placed in the hands of the local association of participating landowners. The association can keep up to 15 percent of these funds for its sustainability, and distribute the remaining 85 percent directly to the landowners. Landowners are thus afforded a steady and secure income stream, and because the associations keep a portion of the payment, each one now has the money it needs to advise and support owners on effective RPPN use. Municipalities that encourage their constituents to invest in the reserves, in turn, receive more money than ever before, creating a win-win situation across the board. Having successfully implemented the mechanism in the state of Parana, Alexandre is working with three other states, including Tocatins, and intends to expand his efforts to other parts of the country in the coming years.
Home to 40 percent of the world’s remaining rainforests, Brazil has long experienced colossal rates of deforestation. Logging in the Amazon Basin and along the vast Atlantic Forest has threatened the forests’ immense biodiversity, and if left unchecked, has enormous implications with regard to global warming. Ninety-eight percent of Parana was once part of the Atlantic Forest; today, forests comprise only 7 percent of the state, and the situation is similar elsewhere. While the Brazilian government has made strides in recent years to curtail logging, deforestation is once again on the rise, due in part to rising prices for soy and other commodity crops. In the absence of effective economic incentives to conserve forests and any attempt to monitor land use, open land is thus more valuable than forested areas. This is all the more troubling considering that most of Brazil’s remaining native forests are in private hands; indeed, in Parana, 80 percent of all forested lands are privately owned. Despite private landowners’ potentially powerful role in the conservation movement, current incentive structures have failed to properly protect the land under the control of private landowners or help those landowners to do so. Indeed, RPPN units were created in response to mounting concerns over Brazil’s deforestation as a way to encourage farmers and large-scale landowners to voluntarily put aside portions of their land for research, environmental education, and ecotourism purposes. The government actually requires that 20 percent of private landholdings must be reserved as RPPN units, yet due to a widespread lack of oversight, this law is rarely upheld. While compliant landowners are theoretically entitled to cash payments from the national government, there exist a number of major bottlenecks. Although the federal government has earmarked funding for the ICMS Ecologico and similar tax exemptions, the payments are channeled not to the landowners or their collective associations, but rather through the local municipalities where they inevitably disappear, fueling a system of corruption and waste. What is more, the units’ upkeep is placed entirely on the shoulders of the landowners, who must pay to fence in the conservation area, hire an armed guard to protect the property, and manage the land themselves, according to a series of legal procedures required by the RPPN law. Landowners thus have little incentive to incur the expense, and due to a lack of government oversight, often ignore the conservation statute altogether.
Under the previous system, landowners who created an RPPN had little faith that they would ever receive their promised payments, if they knew about the incentive scheme at all. As a result, Alexandre understood that providing farmers with any amount of money would serve as a stronger incentive for investing in the reserves—provided that the system was reliable. Yet he also recognized that fixing the system would require getting the active cooperation of the municipalities as well as the farmers and federal government. He thus chose to direct half of the money to the municipalities with no strings attached. As more and more farmers choose to form an RPPN, the municipalities earn well above what they had received under the previous system, thanks to the massive increase in the volume of private reserves. As a result, they, too, have a powerful interest in increasing the number of private reserves.Before he can influence land management at the level of the owners, Alexandre must first secure the approval of the Attorney General and the federal and state governments. In each state, he begins by building support for the legislative changes among local judges, lawyers, mayors, and other municipal authorities. He follows this same approach in states where the ICMS Ecologico is absent, to ensure that the mechanism is built into the law from the very beginning. He then works through the RPPN owners’ associations in each state to demand the required policy change, attempting to first convince the mayor within each municipality to adopt the mechanism by pointing out the benefits incurred to all parties involved. If this fails, he takes the case to the federal government, where the RPPN owners can lodge a complaint when they fail to receive the funds. If the local authorities refuse to pass along the allotted money, the government will simply cut off the payments: An outcome not in anyone’s interest. Yet many of the Brazilian landowners have developed their property, and lack any available land to conserve—even the obligatory 20 percent. Alexandre realized that in these cases, simply redirecting money through the Association of RPPN owners is not enough: He needed to help farmers find a viable way to meet the government’s demands. Because the Association cannot legally own land, however, Alexandre created an independent organization in 2003 that would work in close concert with the Assocations, calling it Preservacao.Similar to a cap-and-trade system, landowners who lack the 20 percent of native forest required by law can rent surplus forest-land from Preservacao, which then takes full responsibility for managing the land. The system has produced yet another win-win situation: Thanks to the direct nature of the transaction, Preservacao can charge the lowest price available on the market, avoiding the legal fees associated with most third-party transactions, while also expanding the funds available for related conservation services. With the purchase of an initial 1,200 hectares of vulnerable land with a grant from British American Tobacco, Alexandre made his land acquisition scheme a critical component of his conservation efforts. To remove the risks inherent in previous exchanges between landowners, Alexandre and a group of lawyers, with the help of The Nature Conservancy, developed a set of norms and legal reforms to regulate the practice. Formerly, when one landowner elected to buy surplus forest land from another whose holdings included more than 20 percent old growth forest, the two would first garner the approval of the presiding environmental agency and then simply record their transaction in a non-binding document. In the event that one landowner sold the property, the new owner could easily contest the transaction, undoing the agreement, and leaving the paying party without any form of recourse.Alexandre has developed a method to avoid these legal vulnerabilities: After receiving the agency’s approval, the landowners instead enter a formal contract, which takes into account potential issues of land tenure and ownership. Because the transaction is now secure, the owner purchasing the surplus land has a far greater incentive to enter the agreement. In addition to managing its own RPPN units, Preservacao also offers its land management services to landowners who prefer to maintain their own legal reserves. To help maintain the reserves, Alexandre has created a series of “carbon-free projects” with various corporate entities, including one project to plant and distribute 2 million native seedlings each year. The Association works with each owner to create a land-use plan, using the money provided by the federal government to cover the costs of maintaining the reserves. Providing such support to the landowners has proven to be a valuable means of earning the landowners’ respect. Moreover, he is working on several complementary programs to strategically connect existing RPPNs, forming continuous biological corridors. In partnership with The Nature Conservancy, he is developing a website that will map the private conservation units and key concentrations of water and other natural resources within each state. Thanks to Alexandre’s efforts, Parana became the first state to legally authorize and fully implement the new funding approach. Alexandre has already successfully implemented it in Tocantins, and is working with two other state legislatures to refine and institute the mechanism. He plans to continue to spread both the incentive tool through the National Confederation of RPPN owners and the reach of Preservacao in the coming years. Recognizing that each of these steps depends on having a well-organized and effective RPPN Owners Association in place to monitor the legislation and to help maintain the reserves, Alexandre is currently working to strengthen the Associations in fifteen states. Helped by his position as the head of the National Confederation, Alexandre helps other associations develop functioning leadership structures and high quality support services. Indeed, the Confederation’s success has been due in part to Alexandre’s efforts to build a powerful coalition that includes The Nature Conservancy, Conservation International, and World Wildlife Fund, which together have exercised an unprecedented ability to create and influence national policy on private conservation units. Since his term as President of the National Confederation of RPPN owners ended in 2008, Alexandre is devoting more of his time to the policy wing of his approach. Meanwhile, he plans to continue in the same vein as a volunteer on the Board of Directors of the National Confederation, and will assume a position on the corresponding Latin American Association. He is looking to apply the innovative approaches of Preservacao and the RPPN Owners Association to other environmental issue areas, including carbon credits and water conservation.
In 1998, Alexandre was asked by his grandfather-in-law to move to Parana to manage his 900-hectare cattle farm. Unlike most of his landholding contemporaries, he had chosen to protect some of the natural forests on his property, and as a result, 40 percent of the land remained first-growth forest. Alexandre and his wife accepted the offer, and took over day-to-day management of the farm, learning the ins and outs of required certification and long-term resource management. In need of an added income flow, they accepted an offer from the mayor’s office to create an RPPN, where they built simple cottages to rent. He thus learned firsthand all the challenges that go into RPPN ownership, and it was at this time that he learned of the Parana Association of RPPN Owners. While the couple sold the farm after his in-law died, the experience left Alexandre permanently engaged in the environmental field. Having learned that landowners will only pursue large-scale conservation if they see some benefit to do so, Alexandre has since worked tirelessly to ensure that conservation is made economically profitable. Alexandre helped the Parana Association to develop its first plan of action and to strengthen its services and public recognition. He took over as head in 1999. He transformed what had been a poorly managed and under-funded association into one that is now self-sustaining, and capable of delivering the management support the landowners need. In 2002, he was elected head of the National Confederation and completed his term as President in 2008.