Climate Smart Cattle Ranching Instrument Analysis

The Climate Smart Cattle Ranching (CSCR) initiative, proposed by Naturevest and The Nature Conservancy, is a blended finance model designed to increase the supply of deforestation-free beef from the Brazilian Amazon. The project establishes a 'New Company' to provide long-term co-investment and technical assistance to mid-sized ranchers, specifically targeting those who lack formal land titles and are unable to access traditional commercial credit. By implementing Embrapa’s Good Agricultural Practices (GAP) and ensuring compliance with the Brazilian Forest Code, the initiative aims to intensify livestock production on degraded pastures, thereby reducing the pressure to deforest and lowering the emissions intensity of beef production.

• The CSCR initiative addresses three primary barriers to sustainable ranching: the lack of long-term financial products that match cattle cash-flows, the requirement for formal land titles as collateral by commercial banks, and the absence of ongoing local technical assistance for intensive production.
• The 'New Company' will operate via Rural Partnership Agreements with a 10-year duration, providing between 15% and 85% of upfront capital and operational expenses, while acting as an aggregator to negotiate better input prices and off-take agreements with retailers.
• The financial strategy utilizes a phased approach: Phase 1 uses a Participations Investment Fund (FIP) with blended finance (grants, concessional debt, and impact equity); Phase 2 intends to transition to a Credits’ Rights Investment Fund (FIDC) to attract commercial investors by pledging receivables from retailers.
• The pilot phase targets 30 rural properties in São Felix do Xingu, Pará, with an initial funding requirement of USD 10 million in equity, USD 10 million in first-loss debt, and USD 30 million in long-term senior debt.
• Quantitative modeling suggests that transitioning from extensive (Business as Usual) to intensive production can increase the internal rate of return (IRR) from 0.7% to as high as 13.4% by increasing productivity from 0.5-1 Animal Unit (UA) per hectare to 4 UA per hectare.
• The initiative aims to reduce the emissions intensity of beef production by 90-95%, potentially dropping from 86.7 kg of CO2e per kg of carcass weight to as low as 4.3 kg CO2e per kg of carcass weight through the adoption of Embrapa's GAP.
• The project's long-term scaling goal in the state of Pará is to cover 300 properties and mobilize approximately USD 470 million in co-investments over a decade, utilizing a franchisor/franchisee system for replication.

APA

Alves, T. C., Jungman, L., & Borschiver, F. (2017). Climate Smart Cattle Ranching Instrument Analysis. Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2020/07/Ecopec-Climate-Smart-Cattle-Ranching-CSCR-Instrument-Analysis.pdf

Chicago

Alves, Tatiana C., Laura Jungman, and Felipe Borschiver. Climate Smart Cattle Ranching Instrument Analysis. Climate Policy Initiative, 2017. https://www.climatepolicyinitiative.org/wp-content/uploads/2020/07/Ecopec-Climate-Smart-Cattle-Ranching-CSCR-Instrument-Analysis.pdf.

Wikipedia

{{cite report |last1=Alves |first1=Tatiana C. |last2=Jungman |first2=Laura |last3=Borschiver |first3=Felipe |title=Climate Smart Cattle Ranching Instrument Analysis |publisher=Climate Policy Initiative |date=September 2017 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2020/07/Ecopec-Climate-Smart-Cattle-Ranching-CSCR-Instrument-Analysis.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{alves2017climate, author = {Alves, Tatiana C. and Jungman, Laura and Borschiver, Felipe}, title = {{Climate Smart Cattle Ranching Instrument Analysis}}, institution = {Climate Policy Initiative}, year = {2017}, month = sep, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2020/07/Ecopec-Climate-Smart-Cattle-Ranching-CSCR-Instrument-Analysis.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }