Search Climate Insights Directory

The report finds that while significant financial flows enter the Cerrado, the current financial architecture fails to align agricultural funding with sustainability and zero-deforestation goals. Subsidized sustainable credit represents only 5.7% of total rural credit in the biome between 2020/21 and 2023/24, and is highly concentrated among large producers and a few financial institutions. The Matopiba region is particularly vulnerable, concentrating over 55% of the biome's deforestation (2013–2022) while relying heavily on Constitutional Financing Funds (FCFs), which often lack transparent sustainability criteria. Blended finance instruments show potential through risk mitigation and flexible terms but remain limited in scale compared to the economic incentives driving land conversion. The authors recommend improving transparency via the Brazilian Sustainable Taxonomy (TSB), expanding the role of sustainable credit, and fostering financial innovation to mobilize private capital.

The report finds that while significant financial flows reach the Cerrado, particularly in the MATOPIBA region, the current architecture fails to align agricultural finance with zero-deforestation goals. Sustainable subsidized credit represents only 5.7% of total rural credit in the biome and is highly concentrated among large producers and a few financial institutions. In MATOPIBA, Constitutional Financing Funds (FCFs) provide 62% of subsidized credit but lack transparency regarding sustainability criteria. Blended-finance instruments show promise through risk-mitigation and value chain partnerships but remain limited in scale due to high Brazilian interest rates, regulatory complexity for foreign investors, and the strong economic incentive for land conversion. The authors recommend improving transparency via the Brazilian Sustainable Taxonomy (BST), increasing the share of sustainability-linked public credit, and scaling innovative blended structures to mobilize private capital.

The report finds that while agricultural credit flows to the Cerrado are significant, the current financial architecture fails to align with sustainability goals. Sustainable credit is limited, highly concentrated among large producers and a few financial institutions, and lacks sufficient territorial coverage, particularly in the Matopiba region. The authors recommend improving transparency through tools like the Brazilian Sustainable Taxonomy, increasing the share of financing linked to sustainability results, and scaling innovative blended finance mechanisms to mobilize private capital.

The document examines how traditional communities in western Bahia, such as the Fecho de Pasto Clemente and Beira Rio, maintain the Cerrado biome through sustainable practices like extensive cattle grazing. It highlights the severe threats posed by industrial agribusiness, including land grabbing and water depletion, and argues that formal recognition of these territories as Omecs or TICCAs is essential for inclusive conservation and social justice.

International climate finance for Brazil grew by 84% between the 2019–2020 and 2021–2022 biennia, reaching an average of US$ 5.1 billion per year. This growth was primarily driven by the energy sector, specifically solar and wind power, and was characterized by a shift toward commercial financing instruments. While Western Europe, led by France, was the largest regional provider, the AFOLU sector—responsible for most of Brazil's GHG emissions—received only 11% of the total finance. Public institutions provided 58% of the funds, with multilateral development finance institutions (DFIs) playing a dominant role, while private finance grew fourfold to reach 42% of the total.

International climate finance for Brazil averaged US$ 5.1 billion per year in 2021–2022, an 84% increase from the 2019–2020 period. This growth was primarily driven by the energy sector, particularly solar and wind power, and a significant rise in private capital from commercial financial institutions. While Western Europe was the largest regional provider, the report highlights a stark imbalance in sectoral allocation: the AFOLU sector, responsible for most of Brazil's GHG emissions, received only 11% of total finance. The majority of funds were earmarked for mitigation (80%) and delivered via commercial debt and equity, while grants and concessional finance declined by 43%.

International climate finance to Brazil averaged R$ 26.6 billion per year in 2021–2022, an 84% increase from 2019–2020. Growth was primarily driven by the energy sector, specifically solar and wind power, and a significant rise in private commercial financing. While Western Europe, led by France, was the primary source, the AFOLU sector—responsible for most of Brazil's emissions—received only 11% of total funding, mostly through public multilateral sources.

The document evaluates a proposed Conama resolution aimed at standardizing the issuance of Vegetation Suppression Authorizations (ASV) to control legal deforestation in Brazil. While the authors praise the proposal for establishing minimum transparency criteria, mandatory geospatial data, and linking validity to the Rural Environmental Registry (CAR), they identify critical flaws. Specifically, they argue the scope is too narrow—restricted to agrosilvopastoral activities—and criticize the unnecessary distinction between ASV and Authorizations for Alternative Land Use (UAS). The briefing recommends expanding the scope to include infrastructure and mining, unifying the authorization nomenclature, and improving the technical interoperability of the national Sinaflor system.

The document serves as a legal reference guide, listing the specific laws and regulations used to implement the Brazilian Forest Code (Lei nº 12.651/2012). It details federal legislation and provides a state-by-state breakdown of the legal frameworks for the Rural Environmental Registry (CAR) and the Environmental Regularization Program (PRA) in 26 Brazilian states and the Federal District. The listed legislation covers topics such as ecological-economic zoning, legal reserve compensation, the restoration of degraded areas, and the administrative procedures for validating rural property registrations.

The research finds that 36% of subsidized rural credit in Brazil from 2020 to 2024 went to properties that deforested after 2009, with public banks and cooperatives providing 91% of this volume. It highlights a recurring pattern of deforestation both before and after credit is granted and argues for a complete dissociation of public financial incentives from any form of deforestation to meet Brazil's 2030 zero-deforestation target.

The report finds that 36% of subsidized rural credit in Brazil between 2020 and 2024 was directed to properties that deforested after 2009. Public banks and credit cooperatives are the primary providers of this credit, with some institutions showing high levels of exposure to deforesting properties. The authors argue for a complete dissociation of subsidized credit from any form of deforestation to meet Brazil's 2030 climate goals.

Brazil is positioned as a potential global leader in green steel due to high-quality iron ore and vast renewable energy resources, though its industry remains heavily reliant on coal-based blast furnaces. While the country leads in biochar use, a full transition requires shifting to electric arc furnaces (EAF) and green hydrogen-based direct reduced iron (DRI). The report emphasizes that strategic policy and the upcoming COP30 summit are critical to overcoming the longevity of existing coal-based infrastructure and the high capital costs of new technologies.

The report identifies critical gaps in the governance of legal deforestation in the MATOPIBA region (Maranhão, Tocantins, Piauí, and Bahia), where agricultural expansion for soy and corn drives significant vegetation loss. It highlights a lack of clarity in legal competence between state and municipal authorities for issuing Authorizations for the Suppression of Vegetation (ASV) and the failure of the national SINAFLOR system to serve as an effective management tool. Key issues include underreporting of ASVs, a lack of public transparency regarding georeferenced data, and technical incompatibilities between state and federal systems. The authors recommend that the federal government clarify issuing competencies, improve SINAFLOR's functionality, and ensure open access to complete ASV data to support the goal of zero deforestation by 2030.

The document examines the systemic failures in managing legal deforestation in Brazil's Matopiba region, highlighting the inefficiency of the Sinaflor system and the lack of transparency in ASV data. It argues that the current governance framework allows for significant underreporting of legal land conversion, which undermines the goal of zero deforestation by 2030 in the Cerrado biome.

This document is an annex listing the federal and state legislation consulted for a 2024 report titled "ONDE ESTAMOS NA IMPLEMENTAÇÃO DO CÓDIGO FLORESTAL?" (Where are we in the implementation of the Forest Code?). It provides a comprehensive bibliography of laws, decrees, normative instructions, and resolutions related to the Rural Environmental Registry (CAR) and the Environmental Regularization Program (PRA) across various Brazilian states.

The report analyzes forest compensation in the MATOPIBA region (Maranhão, Tocantins, Piauí, and Bahia), where agricultural expansion has led to significant deforestation. It evaluates three existing modalities—reforestation by the debtor, forest compensation credits, and cash payments—finding that current implementation often lacks technical oversight, transparency, and environmental effectiveness. To address these gaps, the authors propose four innovative mechanisms: the adoption of computerized management platforms, the use of payment for environmental services (PES), outsourcing fund management to specialized third parties, and utilizing blended finance and match funding to scale restoration projects.

The report analyzes forest replacement in Matopiba, noting that current practices often prioritize commercial timber over ecological restoration. It suggests adopting digital platforms for credit management, using Payments for Environmental Services (PSA), outsourcing fund management to specialized entities, and employing blended finance to scale restoration efforts.

The report analyzes forest replacement policies in the Amazon and Cerrado, arguing that current regulations are outdated because they treat forests as biomass stocks for market supply rather than ecological systems. It highlights that while financial mechanisms like replacement fees exist, funds are rarely directed toward actual restoration. The document specifically criticizes a 2022 law in Goiás for creating exemptions that undermine environmental compensation for agribusiness.

The report assesses the progress of the Brazilian Forest Code's implementation in 2022, highlighting a heterogeneous landscape where registration (CAR) is advanced but analysis and regularization (PRA) remain significant bottlenecks. While states like São Paulo and Espírito Santo show leadership in analysis, only 2% of national registries have completed analysis. The document identifies critical gaps in the registration of traditional territories and the slow adoption of the PRA, while noting that some states are integrating CAR data with deforestation alerts to enforce compliance.

The report examines the gap between soybean production distribution and rural insurance coverage in Brazil, highlighting how climate change—manifesting as severe droughts, hail, and frost—has led to unprecedented insurance claim payments. Using LASSO machine learning models, researchers found that while insurance data is insufficient to predict losses in the North and Northeast regions, agricultural yield data from PAM/IBGE can effectively identify climate variables (precipitation, fire risk, and wind) that correlate with losses. The authors recommend expanding insurance supply to vulnerable regions like MATOPIBA, utilizing production history for pricing in underserved areas, and strengthening the reinsurance market and public-private funds to ensure insurer liquidity.