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How better monitoring and law enforcement saved 59,500 sq. km of the Amazon – an area the size of a small country

Romero Rocha, May 8, 2013

Clarissa Costalonga e Gandour also contributed to this piece.

The Amazon is the world’s largest rainforest, but protecting it from illegal deforestation is a challenge nearly as immense as the forest itself. In a previous study, CPI has discussed explanations for a slowdown in the rate of forest clearings observed in the 2000s. In a new study, DETERring Deforestation in the Brazilian Amazon, we take a step further and answer the question: Which specific policy efforts contributed most to the reduction in Amazon deforestation?

Our analysis reveals that the implementation of the Real Time System for Detection of Deforestation (DETER), a satellite-based system that enables frequent and quick identification of deforestation hot spots, greatly enhanced monitoring and targeting capacity, making it easier for law enforcers to act upon areas with illegal deforestation activity. This improvement in monitoring and law enforcement was the main driver of the 2000s deforestation slowdown.

Prior to the activation of DETER, Amazon monitoring depended on voluntary reports of threatened areas, making it difficult for law enforcement personnel to locate and access deforestation hot spots in a timely manner. With the adoption of the new remote sensing system, however, Brazilian law enforcement personnel were able to better identify, more closely monitor, and more quickly act upon areas with illegal deforestation activity.

Through empirical analysis, we estimate that DETER-based environmental monitoring and law enforcement policies prevented the clearing of over 59,500 km² of Amazon forest area from 2007 through 2011. Deforestation observed during this period totaled 41,500 km² – 59% less than in the absence of the policy change.

We also estimate that, in a hypothetical scenario in which monitoring and law enforcement was entirely absent from the Amazon, an additional 122,700 km² of Amazon forest would have been cleared from 2007 through 2011. To put that figure in context, that’s an area larger than the total land mass of the country of Nicaragua.

TAGS: Amazon, brazil, conservation, deforestation, DETER, enforcement, environment, forest clearings, forests, laws, monitoring, Real Time System for Detection of Deforestation, satellite-based

China at an energy crossroads

Xueying Wang, April 29, 2013

As the second largest economy in the world, China’s energy demand is growing at a speed never seen before, representing more than 80% of the growth in both oil and coal consumption internationally in the past few years. When a country is developing at this scale, anything it does will have huge implications on a variety of global issues, from energy markets, commodity prices, energy security, to climate change.

However, people trying to understand what energy path the country is heading toward are often puzzled by the complexity of the picture: On the one hand, the country is the biggest emitter and the largest net importer of coal. On the other, China also leads renewable energy manufacture and installation, and has helped push down the cost of renewable generation globally.

TAGS: air pollution, China, climate, crossroads, development, economy, emerging economies, emissions, energy, energy demand, energy security, global competition, growth, low-carbon, policy, priorities, renewable, sustainability

National Development Banks can play a big role in climate finance

Chiara Trabacchi, March 27, 2013

National Development Banks (NDBs) can play a big role in climate finance. In many cases, they already are: In CPI’s most recent estimate, NDBs, together with bilateral financial institutions, raised and channeled USD 54 billion in 2010/2011 to renewable energy, energy efficiency, and other climate-related measures.

The question is, could they do more? By raising and distributing international and national public climate finance in their respective local credit markets, NDBs have unique potential; their knowledge of and long-standing relationships with the local private sector put them in a privileged position to access local financial markets and understand local barriers to investment.

TAGS: climate, climate change, development bank, finance, financial institutions, Inter-American Development Bank, investment, money, policy

Does credit affect deforestation? Evidence from a rural credit policy in the Brazilian Amazon

Romero Rocha, March 18, 2013

Clarissa Costalonga e Gandour also contributed to this piece, which was originally posted on Climate-Eval.

The deforestation rate in the Brazilian Amazon decreased sharply in the second half of the 2000s, falling from a peak of 27,000 km2 in 2004 to 5,000 km2 in 2011. In a previous CPI/NAPC study [Assunção et al. (2012)], we estimated that conservation policies introduced in the mid to late 2000s prevented the loss of approximately 62,000 km2 of forest in the 2005 through 2009 period. We’ve recently taken a closer look at one of these policies — National Monetary Council Resolution 3,545.

Introduced in mid-2008, Resolution 3,545 placed a condition on rural credit, an important source of financing for rural producers, in the Brazilian Amazon Biome. To get credit, borrowers had to present proof of compliance with environmental regulations, the legitimacy of their land claims, and the regularity of their rural establishments. To prove credit eligibility, Resolution 3,545 required borrowers to present a series of documents. Such documentation, however, varied according to borrower profiles, with small-scale producers subject to less stringent requirements. Resolution 3,545 represented a restriction on official rural credit — and thereby on the fraction of rural credit that is largely subsidized via lower interest rates — while other sources of financing for agricultural activity suffered no such restriction.

TAGS: agriculture, Amazon, brazil, conditional credit, deforestation, rainforest, rural credit

Climate finance untangled

Barbara Buchner, February 20, 2013

This piece originally appeared on the World Bank blog and is cross-posted here.

Global leaders have spoken strongly on the urgent need for climate action, putting it back on top of the 2013 agenda. During his inaugural address and State of the Union speech, President Obama gave clear signals about his intentions to address this issue in his second term. At the World Economic Forum in Davos, president of the World Bank Group Jim Yong Kim reminded economic leaders about the potentially devastating impacts that could occur in a world 4°C warmer by the end of the century.

Unlocking finance is an essential part of avoiding that future. But, before leaders can determine how much more money is needed, they need to establish how much is already flowing, what the main sources are, and where it’s going.

These are the key questions my team and I at Climate Policy Initiative aimed to answer with the release of the “The Landscape of Climate Finance 2012”. Our analysis estimated global climate finance flows at an average $364 billion in 2011. To put this in context, according to the International Energy Agency, the world needs $1 trillion a year over 2012 to 2050 to finance a low-emissions transition, so current finance flows still fall far short of what is needed.

TAGS: Barbara Buchner, climate change, climate finance, finance, finance flows, global landscape, investment, money, private sector, public sector, risk, risk instruments, San Giorgio Group

In India, Renewable Energy Certificates are missing the target

Gireesh Shrimali, February 11, 2013

In 2008, India’s National Action Policy on Climate Change set a renewable portfolio standard, called the Renewable Purchase Obligation (RPO), to produce 15% of the country’s electricity with renewable energy sources by 2020. Further, under the Jawaharlal Nehru National Solar Mission, the Indian government aims to develop 20,000 MW of solar energy by 2022.

To help reach these ambitious targets in a cost-effective manner, India launched a market-based mechanism called Renewable Energy Certificates (RECs) in 2010.

However, in the one year of trading so far, participation in the REC markets has been low: RECs have failed to attract investment. Though the design of the REC mechanism appears adequate, the performance of the market has been far from satisfactory. This, along with other issues, such as the cost of debt, translates to real concerns over whether India is on track to meet its ambitious targets.

So why is this happening?

TAGS: clean energy, climate, electricity, energy, India, market, National Solar Mission, policy, power, REC, renewable energy, renewable energy certificates, Renewable Purchase Obligation, ROC, RPO, solar, wind

Brazil’s deforestation and conservation policies: A quick video overview

Juliano Assunção, January 31, 2013

In this short video, Juliano Assunção, Director of Climate Policy Initiative Rio, discusses Brazil’s deforestation and conservation policies.

TAGS: agriculture, Amazon, brazil, conservation, data, deforestation, environment, policy, video

Policy Watch: Black carbon, Beijing’s new air pollution measures, and California carbon trading

Elysha Rom-Povolo, January 24, 2013

This week, climate policy headlines from around the world include a new study that ranks soot as the second-worst cause of climate change, an estimated $700 billion cost to avoid further temperature rise, and Germany’s solar development.

Elinor Benami, Chiara Trabacchi, Hermann Amecke, and Karen Laughlin contributed headlines to this edition of Policy Watch.

Study: Black carbon ranks as second-biggest human cause of global warming
Soot ranks as the second-largest human contributor to climate change, exerting twice as much of an impact as previously thought, according to an analysis released Tuesday.

The four-year, 232-page study of black carbon, published in the Journal of Geophysical Research: Atmospheres, shows that short-lived pollution known as soot, such as emissions from diesel engines and wood-fired stoves, has about two-thirds the climate impact of carbon dioxide. The analysis has pushed methane, which comes from landfills and other forces, into third place as a human contributor to global warming. Full article.

TAGS: Beijing, black carbon, california, carbon trading, China, climate finance, climate policy, Germany, policy watch, solar, soot

Banking on the sun

Andrew Hobbs, January 7, 2013

Last month, David Crane and Robert F. Kennedy, Jr. wrote in the New York Times about the potential of rooftop solar to make the United States more disaster-resilient and energy independent and at the same time democratize electricity generation. They rightly pointed out that in Germany, where rooftop solar is now much less expensive than in the United States, renewable energy provides dividends to homeowners and is breaking records for clean energy generation.

While Germany is a great example of success in distributed generation, the advent of solar leasing in the U.S. promises to make investing in solar even easier.

TAGS: crowd funding, energy, finance, policy, renewables, solar, solar leasing, Solar Mosaic, SolarCity, Sungevity, U.S.

Supporting wind energy and saving U.S. taxpayers nearly $5 billion in three easy steps

Uday Varadarajan, December 18, 2012

CPI’s recent study, Supporting Renewables While Saving Taxpayers Money, showed that U.S. governments could save a lot of money by adjusting how tax incentives for renewable energy are delivered. In particular, we showed that a $21/MWh taxable cash incentive for production (TCP) for wind could provide the same support to wind projects as the current $22/MWh production tax credit (PTC) and almost halve the cost to federal and state governments.

US Government could save 4.5 billion by adjusting current wind policy

The PTC is set to expire at the end of this year. The Senate has proposed extending it by one year, but at a cost to government in excess of $12 billion – a heavy lift given budget constraints. Replacing the PTC with a TCP could reduce that cost to $7.5 billion. A similar reduction in cost would apply to any proposal to extend the PTC, including the recent proposal by the American Wind Energy Association to phase-out the PTC over six years.

How does this work?

Well, wind project developers have limited tax liabilities. That means that by themselves, most project developers can’t use federal tax benefits until years after they are received, eroding almost two thirds of the incentive value. In order to get more out of these incentives, project developers bring in outside investors who have greater tax liabilities. This is called tax-equity financing. However, tax equity financing is more expensive and complex than conventional finance, and erodes about a third of the incentive value.

TAGS: budget, clean, cost, costs, energy, government, renewables, savings, subsidies, tax, taxpayers, U.S., wind

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