MAY 2019

NEARING THE
TIPPING POINT

Drivers of Deforestation in the
Amazon Region
By Matt Piotrowski
Introduction by Enrique Ortiz

Nearing the Tipping Point: Drivers of Deforestation in the Amazon Region1

MAY 2019

Foreword
I am proud to present “Nearing the Tipping Point: Driversof Deforestation in the Amazon Region” a report by Matt
Piotrowski, senior analyst at Climate Advisers, with an
introduction by Enrique Ortiz, program director at theAndes Amazon Fund.
The Amazon rainforest is one of our planet’s mostimportant ecosystems. An indispensable asset inregulating global climate, it has been estimated tocontain 10% of all the biomass on Earth, including vastquantities of carbon that would otherwise linger in ouratmosphere, contributing to the greenhouse effect.
However, unchecked development is placing the Amazon
under threat, pushing forest cover loss to near-record
levels throughout the region. This report identifies the
key forces driving deforestation in Brazil, Peru, Colombia,
Bolivia, and Ecuador, which together contain almost 90%of the Amazon rainforest, and analyzes policies aimed at
reducing deforestation. It proposes measures that could
be implemented to encourage the sustainable developmentof the Amazon’s rich resources while ensuring it remains a
cornerstone in the fight against climate change and a troveof biodiversity.
We would like to thank Paulina Arroyo of the Gordon andBetty Moore Foundation, independent expert Ana Cristina
Barros, Meg Symington of the World Wildlife Fund, and© 2019, Inter-American Dialogue
First Edition
Printed in Washington, DC
Cover photo: Neil Palmer / Flickr / CC BY-SA 2.0
Editor: Lisa Viscidi / Inter-American Dialogue
Layout: Nate Graham / Inter-American Dialogue

2

Nearing the Tipping Point: Drivers of Deforestation in the Amazon Region

Haley Wiebel and Keith Madden of the Andes Amazon Fundfor their insightful comments on this report. We would
also like to thank Nate Graham, assistant for the Energy,
Climate Change & Extractive Industries Program, andBentleigh Asboth, the program’s intern, for their valuableassistance.
This effort is a product of the Energy, Climate Change &Extractive Industries Program, which informs and shapes
policies that promote investment while encouraging
climate change mitigation and the socially, economically,and environmentally responsible development of natural
resources.
We are grateful to the Andes Amazon Fund for theirgenerous support of this report. The views expressed inthis report are those of the authors and do not necessarilyreflect the perspectives of the Inter-American Dialogue or
its board, partners, or sponsors.

LISA VISCIDI

Program Director
Energy, Climate Change & Extractive Industries

With support from:

MAY 2019

Introduction
BY ENRIQUE ORTIZ
The Amazon River basin is home to the largest tropicalrainforest on the planet. Twice the size of India, it spans
2.6 million square miles across Brazil, Peru, Colombia,
Venezuela, Ecuador, Bolivia, Guyana, Suriname, andFrench Guiana. But its impact reaches far beyond SouthAmerica. The Amazon rainforest plays a critical role asa storehouse of carbon and mediator of the global water
cycle, influencing rainfall patterns as far away as thewestern United States.1 It holds a greater share of theworld’s known biodiversity than any other ecosystem. It
is also home to millions of people, including uncontacted
tribes. However, rising deforestation rates jeopardize thefuture of this region.
The Amazon Basin is estimated to house at least 10% of
the world’s known biodiversity.2 Given that only a small
portion of the basin has been studied, and that new
species are discovered daily, some scientists claim it may
contain up to 30% of the world’s flora and fauna. One infive of the world’s bird and fish species are found in the
Amazon. A study examining a single hectare in Ecuador
identified more than 470 species of tree,3 and famed
biologist E.O. Wilson once found 43 species of ant in asingle tree, more than those found in the whole United
Kingdom.4

There are also about 30 million people living in the
Amazon basin,5 and for one million of them, this tropicalforest is their ancestral home. Close to 400 ethnic tribes,6
each with its own culture and language, are estimated tolive in the Amazon. Over 100 tribes live with little or nocontact with the outside world, commonly referred to as“uncontacted” or “peoples living in voluntary isolation.”Indigenous peoples have property or exclusive use rights
in large areas of the Amazon, particularly in Brazil andColombia. Indigenous territories account for close to 20%of the total area of the basin.7 In most of these territories,
indigenous peoples live in a traditional way, with practices
that minimize forest degradation. Many more nonindigenous people, descendants of migrants, also live in
the Amazon.
The Amazon basin is also an important center of economic
activity. Large cities like Manaus, Iquitos, and Leticia are
vibrant centers for economic development. The region
provides important products for the world, such as edible
commodities, oil, and minerals. In addition, its varietyof life forms may offer key elements for developing new
pharmaceutical drugs that could cure illnesses.
In spite of the Amazon’s critical role, the forest is being
depleted at an alarming pace. Over the last decade,deforestation rates have remained stubbornly high in Peru,
Colombia, Ecuador, and Bolivia (see Figure 1) and arerising in Brazil after a previous sharp decline. All countries
remain significantly behind on their commitments to

FIGURE 1: AMAZON FOREST LOSS, 2001-2018
Source: MAAP using data from Hansen/UMD/Google/USGS/NASA

1400

HECTARES (THOUSANDS)

1200
1000
800
600
400
200
0

WESTERN BRAZILPERU

BOLIVIA

COLOMBIAECUADOR

Nearing the Tipping Point: Drivers of Deforestation in the Amazon Region

3

reduce deforestation. For consistency, most figures inthis report are based on satellite data from Amazon
Conservation’s Monitoring of the Andean Amazon Project(MAAP). Governments from each of the countries also
provide data on deforestation rates, but the reported
levels are generally lower, possibly due to less accuratemonitoring or the use of different methodologies. The
specific locations where deforestation is happening arealso troubling (see Figure 2). Forests close to the Andes
and other large sectors of the basin are more susceptible
to the effects of climate change, such as forest fires. Most
Andean Amazonian countries are approaching record
deforestation figures.
Deforestation is a major contributor to greenhousegas emissions: 25% of global emissions result fromthe clearing and burning of forests worldwide,8 and the
Amazon holds 60% of the world’s remaining rainforests.9
Avoiding further deforestation and increasing forest cover
are among the most effective ways to fight the impactsof climate change. All Amazonian countries signed on to
the 2015 Paris Agreement—which seeks to maintain the
global temperature rise to well below 2 degrees Celsius
above pre-industrial levels—and all committed to reduce
deforestation. But current emissions data shows thatthese targets are far from being met as deforestation in
the Amazon rises.
The trends of rising emissions and a changing climate
trigger even further deforestation. Forest loss leads toincreasingly drier conditions that could result in forest
fires on a massive scale.10 More worryingly, the Amazon
may be approaching a “tipping point.” The basin generates
approximately half of its own rainfall by recycling moisture
as air masses move from the Atlantic across the basin
to the west.11 At some point, deforestation will likely
reduce this moisture cycle to a point where it will nolonger support rainforest ecosystems. Current science
indicates that the tipping point may be at 20-25% of
deforestation in Amazonia12—and some estimates alreadyplace deforestation to date at 20%.13 Current deforestation
trends and the risk of further forest depletion threaten thesurvival of vast numbers of plant and animal species aswell as the homes and livelihoods of millions of people.
The main causes of deforestation vary between countries
in the Amazon and in many cases a chain of events leads
to deforestation rather than a single driver. For instance,roads are built or land is illegally seized, opening up areas
to make pastures or grow crops.
The agricultural sector is undoubtedly one of the main

4

Nearing the Tipping Point: Drivers of Deforestation in the Amazon Region

drivers across the basin. The sector is a key source of
employment, government revenue, and investment inAmazonian countries. Most deforestation occurs forthe ultimate purpose of using land for livestock or foodcrops. But the commodities produced vary widely—from
cattle to soy, palm oil, and cacao. Often, land is used
inefficiently. In Brazil, improvements in efficiency meantthat cattle and soy production rose from 2004 to 2012even as deforestation declined. However, the recent risein deforestation in Amazonian countries suggests thatsustainable practices are not used widely enough. In
addition, companies are not proactive enough in ensuring
deforestation-free supply chains. Recent analyses showthat deforestation over the last decade has shifted tosmaller plots (five to ten hectares), suggesting small-scale
farmers are expanding the agricultural frontier.14
Illicit activity in Amazonian countries is also a challenge,
having both direct and indirect impacts on deforestation.
Recent studies show that the impacts of illegal or
unregulated use of forest resources (logging, hunting,fishing, and wildlife commerce) are much higher thanpreviously thought. It is estimated that up to 70% of woodfor commercial use has been extracted illegally in Brazil,
Peru, and Colombia.15 The construction of secondary
roads associated with illegal logging operations indirectly
causes further destruction, opening the forest to illegal
occupation and hunting. In Colombia, 70% of Amazonian
deforestation is related to land grabbing driven by mafias
linked to illicit activities like drug trafficking and money
laundering. Illegal gold mining in rivers and floodplains is
a driver of deforestation, even threatening protected areas,
particularly in Peru.
Infrastructure development has also resulted in land-use
changes, deforestation, and forest degradation in large
portions of the Amazon. Transport infrastructure has
the largest impact on forests because creating accessto previously unconnected areas leads to deforestation
around the roads. Roads are often built without propersocio-environmental safeguards and land tenure planning.
Energy infrastructure, such as large hydroelectric dams,
which require flooding of broad forest areas, is also adriver of deforestation. Although new large hydroelectric
dam construction in South America has slowed recently,
the Brazilian government has plans to build new dams in
the Amazon to meet rising electricity demand. In Ecuador,
the government recently opened a protected area in the
Amazon to oil exploration and production.
International financial institutions such as the World Bank,Inter-American Development Bank, and CAF Development

MAY 2019

FIGURE 2: FOREST COVER LOSS HOTSPOTS IN THE WESTERN AMAZON, 2018
Source: MAAP using data from Hansen/UMD/Google/USGS/NASA, GFW, SERNANP, SNAP, SINAP, SERNAP, RAISG

Nearing the Tipping Point: Drivers of Deforestation in the Amazon Region

5

Bank of Latin America, as well as local development banks
such as Brazil’s BNDES, have improved their environmental
standards. However, Chinese state banks are increasingly
providing loans to South American governments for
projects that other banks decline to finance because ofenvironmental and social concerns. Chinese banks andcompanies generally follow local environmental standards,
which are often less stringent than those of multilateraldevelopment banks. Although not all of its projects may
come to fruition, China has very extensive plans forfinancing and building infrastructure throughout SouthAmerica through its Belt and Road Initiative.
A lack of oversight, often due to inadequate resources
for environmental regulation, is a pervasive challenge inAmazonian countries, and signs suggest this problem
is only growing. In his first months in office, Brazil’s newpresident, Jair Bolsonaro, reduced the already strained
budgets of national environmental and indigenous
offices. In Colombia, the relinquishing of control by the
Revolutionary Armed Forces of Colombia (FARC, by its
Spanish initials) following the 2016 peace agreement withthe government created a vacuum of governability now
occupied by other illegal armed groups, resulting in land
grabbing and significant deforestation. Weak governments
and political instability in Ecuador and Peru have reduced
capacity to halt deforestation and related expansion ofillegal activities.
Although this picture may seem bleak, there are reasonsfor optimism. National parks and indigenous reserves havebeen expanded in all Amazon countries, even doubling
and tripling in size in some countries over the last decade.
Deforestation rates inside protected areas are significantly
lower than those outside. The legal frameworks forprotecting forests have improved considerably. And there
are numerous successful examples of forest protection,
management, and restoration. Perhaps more importantly,
civil society organizations, indigenous movements, andgovernment agencies at both the national and subnational
levels are collaborating effectively. Though the current
trends are worrisome, the region has vast areas underprotection and a deeper involvement and commitment
from society than ever before. It’s not too late to prevent
reaching the tipping point and maintain an ecologically andsocially vital region that can provide services and support
life for present and future generations.

6

Nearing the Tipping Point: Drivers of Deforestation in the Amazon Region

Drivers of Deforestation in
the Amazon Region
BY MATT PIOTROWSKI

BrazilHome to more than 60% of the Amazon region,16
Brazil has long been a focal point in efforts to combat
climate change. After a successful campaign reduced
deforestation rates by 80% between 2004 and 2012,
deforestation has been on the rise once more since the2012 loosening of Brazil’s Forest Code.17 Deforestationin the entire Brazilian Amazon in 2018 was 14% higher
than 201718 (see Figure 3), according to preliminary
data from the Brazilian government’s National Institutefor Space Research (INPE, by its initials in Portuguese),
which estimates that 790,000 hectares in the Amazon
were cleared over the period. MAAP, the data source usedthroughout this report, currently only has data for thewestern Brazilian Amazon, and those figures are muchhigher than government figures for the same region.
Rising deforestation comes in spite of Brazil’s pledge
in 2015 under the Paris Agreement to eliminate illegal
deforestation in the Amazon by 2030 and restore 12
million hectares of forest by that date. Climate Action
Tracker, which provides independent research on country
commitments, labels Brazil “insufficient” in meeting its
Paris target of reducing emissions to 43% below 2005
levels in 2030.19 Based on current policies, CO2 emissions
are projected to reach approximately 2 billion tons per
year by 2030, placing them at the same level as in 2005.20
Government figures suggest that deforestation is alreadymore than 40% above the country’s target. In this context,
it appears that Brazil will fail not only to reduce the trend in
deforestation but also to meet its Paris goals.
The trend of rising deforestation rates began under
President Dilma Rousseff’s administration (2011-2016)
with the 2012 weakening of Brazil’s Forest Code, which
included the removal of deforestation restrictions, aloosening of the permitting process, and amnesty for
illegal deforestation prior to 2008, which some haveargued created an expectation for similar pardons in the
future.21 Her successor, Michel Temer, curbed protections
for the environment and indigenous peoples by slashing
the Ministry of the Environment’s budget along withfunding for enforcing laws to protect rainforests.

MAY 2019

FIGURE 3: FOREST LOSS IN THE BRAZILIAN AMAZON, 2001-2018
Sources: MAAP (using data from Hansen/UMD/Google/USGS/NASA) and INPE. MAAP data refer to forest loss, INPE data to deforestation. *2018 data preliminary.

HECTARES (THOUSANDS)

3000
2500
2000
1500
1000
500
0

TOTAL BRAZILIAN AMAZON (INPE)*
WESTERN BRAZILIAN AMAZON (MAAP)
WESTERN BRAZILIAN AMAZON (INPE)*

Many expect this increase in deforestation to accelerate
under President Jair Bolsonaro, who is dismissive of
climate change and relied heavily on the support of the
bancada ruralista (the large bloc of legislators allied withagribusiness) during his campaign. Among Bolsonaro’s
first acts after taking office on January 1, 2019, was toshift the power to demarcate and oversee indigenous
lands from the National Indian Foundation (Funai, by its
Portuguese acronym) to the Ministry of Agriculture,22
which is run by Tereza Cristina, formerly a member of
the agribusiness caucus in the lower house of Brazil’s
legislature. Indigenous reserves play an important role inAmazon preservation in Brazil, accounting for 13% of its
territory.23 Bolsonaro also reassigned the Brazilian Forest
Service, which is responsible for the implementationof the Rural Environmental Registry (CAR, by its initials
in Portuguese) from the Ministry of Environment to
the Ministry of Agriculture.24 The CAR is a mechanism
for tracking which rural property is designated forconservation versus cultivation and enforcing the Forest
Code using satellite imaging. The Forest Service’s newhead, a former legislator, has been one of the most active
opponents of the CAR, and his appointment has been
decried by environmental groups as the final dismantlingof the Forest Code.25 Brazil’s environmental agency(Ibama, by its Portuguese acronym) remains under the
Ministry of the Environment but is undergoing a similar
weakening. For example, it is revising its environmental

licensing process so that rural property owners can grant
themselves a license electronically,26 and Bolsonaro
has signed a decree allowing environmental fines to be
replaced by environmental recovery and conservation
actions.27 Finally, the administration has ambitious plansfor infrastructure expansion and has announced several
major bridge, road, and dam projects in the Amazon.28
DRIVERS OF DEFORESTATION IN BRAZIL
The conversion of forests to pastures and plantations forcommodity production is a major driver of deforestationin Brazil. From production and trade to sourcing byretailers, the agricultural commodities industry leaves
a large environmental footprint. In some cases, illegal
land speculation creates a domino effect: land is cleared
illegally to increase its value with the intention to sell. The
cleared land is then used for cattle grazing or commodity
production. Limited certification and lack of transparency
make accountability and traceability difficult.
Cattle ranching is the sector with the greatest impact on
Amazon deforestation in Brazil. Indeed, estimates suggestthat 80% of deforestation throughout the entire Amazon
stems from this industry, either directly or indirectly.29
Approximately 75 million hectares have been deforested
for cattle ranching in the Brazilian Amazon, where nearly
40% of the country’s cattle herd are located. Demand for

Nearing the Tipping Point: Drivers of Deforestation in the Amazon Region

7

Brazilian beef comes from both domestic and foreign
markets. Although 80% of the country’s beef supply isconsumed domestically, Brazil also has positioned itself as
the largest exporter of beef in the world. And its overseas
market is only growing—in 2018, the beef industry shipped
1.64 million tons to foreign countries, a 10% increaseover 2017, with China and the Middle East as top buyers.
All told, Brazil’s livestock farming sector accounts formore than 7% of the country’s GDP and almost one thirdof agribusiness GDP. Although beef from the Amazon
is not usually exported, the increase in volumes sent
to international markets from southern regions of thecountry translates to more land used in the Amazon fordomestically consumed cattle. The combination of cheap
labor, low operating costs, and access to roads and othertransport infrastructure facilitates the expansion of cattle
ranching in the Amazon.
However, despite strong demand, between 2008 and2012, deforestation actually declined as cattle and soy
production expanded (see Figure 4). This suggests that
deforestation is not necessary for agricultural operations
to grow—farmers can tap underutilized land and improve
efficiencies instead of clearing forests.
Numerous companies operating along the cattle supply
chain in Brazil have established goals to monitor activity
in order to reduce deforestation. However, deforestation

persists in part due to “leakage” supply (products thatare tied to illegal activity or environmental damage) as
well as lack of sufficient monitoring by companies.30
Many Brazilian retailers source, directly or indirectly, fromslaughterhouses in the Amazon where there are highlevels of deforestation.31 Approximately 30% of capacity
is operated by slaughterhouses in the Amazon that havenot signed Terms of Adjustment of Conduct (TACs)—
agreements to prevent illegal deforestation—with thegovernment. But even supply sheds that have signed TACs
are still connected to deforestation.32 From 2010 to 2015,
more than eight million hectares of deforestation werelinked to slaughterhouses that signed TACs, highlighting
industry obfuscation and difficulty with government
oversight.33
Rising production of soy is a more limited but still
important driver of deforestation in the Brazilian Amazon.
Soy production growth connected to deforestation ismore prominent in the Cerrado,34 a tropical savannah inthe central regions of the country. However, recent shifts
in global trade and weaker government regulations andenforcement have also put the Amazon at risk. For the
2017-18 marketing year (September to August), Brazil
led global production at 122 million tons, marking amajor milestone as it surpassed the United States as theworld’s top producer. Approximately 13% of Brazil’s soy

FIGURE 4: DEFORESTATION AND SOY AND CATTLE PRODUCTION IN BRAZIL, 2001-2016
Sources: INPE (deforestation), Brazilian Institute of Geography and Statistics (IBGE) (soy and cattle production)

90

HECTARES (THOUSANDS)

80
2500
70
2000

60
50

1500
40
1000

30
20

500
10
0

0

DEFORESTATION

8CATTLE PRODUCTION

Nearing the Tipping Point: Drivers of Deforestation in the Amazon Region

SOY PRODUCTIONHEADS OF CATTLE (MILLIONS)TONS OF SOY (MILLIONS)

3000

MAY 2019

crop comes from the Amazon.35 In the past year, Brazilian
production has risen as a result of currency depreciationand the declining competitiveness of US farmers dueto the tariff dispute with China. This opening provided
Brazilian exporters with greater access to China, thelargest market in the world. Brazil now ships almost 80%
of its soy exports to China.36
Following past improvements in environmental
management, there are signs that the soy industry’s impact
on deforestation may increase once again. Aprosoja, aninfluential group that represents the soy industry, supports
Bolsonaro and has encouraged him to loosen processes
for producers to obtain permits in rainforest areas andrestrict the naming of new territories for indigenous
peoples.
More promisingly, however, major traders and retailers
along the Brazilian soy supply chain are playing a rolein limiting deforestation in the Amazon. The 2006 Soy
Moratorium, under which soy buyers committed not
to purchase from suppliers that deforested land for
production, played a large role in reducing deforestation in
the Amazon.37 Large international commodity traders, suchas US firms Archer Daniels Midland, Bunge, and Cargill,
Netherlands-based Louis Dreyfus, China’s COFCO, andBrazil’s own Amaggi, have announced “zero-deforestation”
commitments, with some going back as early as the
middle of the mid-2000s. Similarly, retailers such as
Unilever and Carrefour have committed not to source
supply linked to deforestation. The momentum has picked
up with the signing of the New York Declaration of Forests,
a voluntary and nonbinding commitment to eliminate
global deforestation, in 2014, and other corporate
commitments since then. These commitments offer
examples of public policy intersecting with increasingsustainability ambition in the business community toprotect forests.
However, deforestation-free commitments have
limitations. They do not sufficiently cover all actors
along the supply chain, and companies are lagging on
implementation. Furthermore, companies need help fromthe public sector to improve governance of land in generaland provide support to rural growers that are not coveredby sustainability commitments.
Amid Brazil’s agricultural boom, infrastructuredevelopment—particularly of roads and railways—in
connection with the increased production, transportation,
export, and consumption of commodities has also led tomore clearing of land, both directly and indirectly. New

infrastructure creates avenues into remote forest regions
for economic development, leading to more land clearing
around the transport infrastructure itself. In the 1970s,
roads in the Amazon were built primarily in an effort
to integrate the local population with the rest of Brazil.
Now, however, the construction, upgrading, and pavingof highways, along with new railways, are linked to the
movement of commodities. One estimate claims that
infrastructure development in the Amazon could total$70 billion by 2020, potentially undermining sustainability
efforts.38 The BR-163 highway, an important corridor in
the heart of the Amazon that is used to ship soybeans toterminals at Mirituba and Santarém on the Tapajós Riverfor export, poses a particularly signficant threat. The
Bolsonaro administration is seeking to expand BR-163 by
300 miles into rainforest area.39
Beyond the agricultural sector, timber logging, both legal
and illegal, is a significant driver of deforestation in Brazil.
Logging activity is not directly connected to deforestation,
but it does create access to forested area and increase theland’s value. Logging is an Amazon-wide problem, but theBrazilian state of Mato Grosso is reportedly the area where
illegal activity is particularly rampant. Ibama had only four
officers patrolling over 17 million hectares there last year,
and when fines were issued, only about 10% were paid.40
In the state of Pará, some 44% of logging during 2015-16
was illegal, according to data from the Institute of Man
and Environment of Amazonia (Imazon, by its Portuguese
acronym).41 Timber extraction typically goes undetected byauthorities due to limited resources and technology, or insome cases corruption.42
CONCLUSIONSWith the sharp drop in deforestation rates from 2004
through 2012, Brazil demonstrated that effective
measures, proper regulations, and improved corporate
governance can protect forests. Now the government
needs to recommit to stricter enforcement. Brasília should
increase the budget for enforcement and equipment suchas helicopters and satellite monitoring. Since 2012, when
deforestation rates began to rise again, the government
has scaled back conservation efforts and given amnesty tomillions who cleared land. Instead, the government should
revert to initiatives that proved successful during the 200412 period: anti-corruption measures, the Soy Moratorium,targeted enforcement, and the meatpacker agreement
made in 2009.43
It is critical that local and national governments workwith companies to follow international agreements on

Nearing the Tipping Point: Drivers of Deforestation in the Amazon Region

9

zero deforestation. Investors, retailers, and traders canengage and pressure commodity producers to move awayfrom clearing land, while the government can provide its
own financial incentives. Overall, the government should
increase dialogue with agricultural companies along the
supply chain to achieve the goal of lower deforestation.
Large agriculture companies such as the major traders,along with retailers, need to remain committed to zerodeforestation policies and their implementation. Largescale companies should work with small and mediumsized farmers to provide incentives to halt clearing offorests for commodity production. At the same time, thegovernment should provide market signals for agricultural
producers to increase efficiency and operate on underutilized land that is not forested. Just as importantly, thegovernment should offer financial incentives to traders tooperate using existing infrastructure rather than building
new outlets such as roads, railways, and rivers.

Peru

The Brazilian government should also finance long-term
reforestation efforts, whether through international
institutions, nongovernmental organizations (NGOs),or corporations. A commitment to a multi-year, robustreforestation program would help Brazil to meet its Paris
pledges.

The rise in deforestation is contributing to Peru’s
increasing greenhouse gas emissions despite thegovernment’s demonstrated commitment to fighting
climate change as host of COP 20, a key 2014 United
Nations summit leading up to the Paris Agreement. Peru is
not on track to meet its Paris emissions reductions targets
and is well behind on its fast-approaching Copenhagengoal of “net-zero” deforestation by 2021. In Paris, thePeruvian government agreed to cut emissions by 30%
below its “business-as-usual” scenario, which projects
greenhouse gas emissions to reach 269 million metrictons, by 2030. At the time, Peru estimated that it could
achieve more than three fourths of its mitigation efforts
through forest conservation.45 But rather than declining,
emissions from deforestation are projected to rise by morethan 80% between 2012 and 2030.46 Under current policies,
Peru’s total CO2 emissions are projected to reach as highas 174% above 1990 levels by 2030, compared to the goalof 143%.

Finally, expansion of protected areas, which include
biological reserves, indigenous lands, and national parks,
is one method to curb deforestation rates.44 It is importantthat the government sufficiently monitor existing protectedareas and establish new ones. This can not only limit
deforestation but also protect biodiversity and indigenous
peoples.

It is important that the
government sufficiently monitor
existing protected areas andestablish new ones. This can
not only limit deforestation but
also protect biodiversity andindigenous peoples.

10

Nearing the Tipping Point: Drivers of Deforestation in the Amazon Region

In Peru, where 60% of the land is covered by Amazonian
forest, agricultural expansion is the main driver ofincreasing deforestation. Illicit activities such as illegal
logging, burning forest for coca cultivation, and gold
mining also contribute to forest loss in the country. A
synthesis by MAAP estimates that approximately 250,000
hectares were deforested in Peru in 2018, a decline fromthe previous year but still the country’s fourth-highest
annual total on record (see Figure 5). Since 2001, Peru
has seen the highest rates of deforestation in the Andean
Amazon. The Ucayali and Huanuco regions in central
Peru have witnessed the largest amount of deforestation,
predominantly due to cattle grazing. Agriculturaldevelopment and illegal gold mining along the Interoceanic
Highway are the main drivers in the southern area of the
Peruvian Amazon.

In recent years, Peru has loosened environmental
enforcement, a trend continued under President Martín
Vizcarra in December of 2018 with the weakening of
the forestry auditor (this was reversed in April 2019
following the threat of US sanctions).47 However, despite
the country’s poor record of controlling deforestation,
Peru has passed several important laws to fight illegal
activity in forests and curb land clearing for industries. For
instance, the National Strategy on Protected Areas and thecountry’s forest laws provide a framework for improving
forest management and safeguarding protected areas.
The Inter-American Development Bank and the Climate

MAY 2019

FIGURE 5: FOREST LOSS IN THE PERUVIAN AMAZON, 2001-2018
Source: MAAP using data from Hansen/UMD/Google/USGS/NASA

400

HECTARES (THOUSANDS)

350
300
250
200
150
100
50
0

Investment Fund have both provided large-scale grants andloans to help facilitate measures for Peru to meet its goalof net-zero deforestation. While the current government
has declared a state of emergency to crack down on illegal
mining as an immediate measure, it is also starting a
program to provide alternative economic activities to local
people in the Madre De Dios region of southwestern Peru
in hopes of creating a longer-term solution.
DRIVERS OF DEFORESTATION IN PERU
Production of agricultural commodities is a leading factor
behind forest loss in Peru. Given that the agriculture
sector represents 7.5% of the country’s GDP and theeconomy continues to grow at a rapid clip, these sectors
are likely to remain important sources of government
revenue and economic development.48 In the agricultural
sector, cultivation of coffee and cacao are among the top
drivers of deforestation. Cattle grazing and palm oil also
have a modest impact. Most production of agriculturalcommodities occurs on small farms where farmers’
livelihoods depend on agriculture, suggesting thatconservation policies will have to consider the needs ofsubsistence farmers.
Small-scale coffee and cacao cultivation cause themajority of agriculture-driven deforestation in the Peruvian
Amazon.49 The Peruvian Agricultural Census of 2012
recorded that a quarter of agricultural land in the Peruvian
Amazon was used for coffee production.50 Most of thecoffee cultivation occurs on farms with less than fivehectares of land. These small landowners make up 62% ofcoffee grown in the Peruvian Amazon.51
Meanwhile, the employment and income of some 90,000
families, many of whom live in poor areas, are linked
to the cacao business.52 Families grow and sell cacao,
which is transported and exported by larger players. The
industry has become highly dependent on the lucrative
export business. For instance, from 2007 to 2016, exportsof cacao beans increased fifteen-fold, according toInternational Trade Centre data.53 Although small farmers
are behind most cacao growth, larger companies havetaken advantage of the growing industry too. United
Cacao, a larger producer with several small plantations,
reportedly destroyed thousands of hectares of forest to
grow cacao in Peru.54 The company’s CEO stepped downin 2017 and a forensic audit exposed numerous financial
and environmental violations, underlining the challenge ofpolicing large as well as small companies.55
In addition, palm oil production is responsible for a small
but rising share of deforestation. Since 2000, an estimated
31,500 hectares of primary forest have been cleared forpalm oil plantations in Peru, according to MAAP.56 While
this represents a minor share of overall deforestation in
Peru, the industry’s output is expected to triple this year,
raising concerns that production may lead to increased
deforestation.57

Nearing the Tipping Point: Drivers of Deforestation in the Amazon Region

11Illicit activities and their detrimental environmental
impacts also pose a tremendous challenge topolicymakers in Peru. A chain of illegal activity leads todeforestation: mafia-like actors invade land, pay owners
to abandon their plots, and subsequently mine the land
for gold. The sharp rise in the price of gold beginning in
the early 2000s (see Figure 6) attracted more players to
the lucrative business. Gold mining also became more
profitable following the construction of a new highway,
the Interoceanic Highway, which connects Peru to Brazil.
The faster, more efficient transportation in the Peruvian
Amazon provided by the new highway has opened accessfor workers seeking economic opportunities, mafias, andother groups traveling to gold-rich areas. Miners destroy
trees and other vegetation in the Amazon before extracting
the gold. A study conducted by Wake Forest University andreleased in late 2018 showed that deforestation driven
by small-scale gold mining has reached a record high.
Over the last five years, this activity has led to the lossof 100,000 hectares of forest, double the levels seen in2013.58
Policies to fight illegal gold mining have so far been largely
ineffective. The government has had difficulty monitoringgold mining operations with satellites. It has increased
troop deployment and police presence to crack down on
this activity, but it is too soon to judge the success of thispolicy. In February, Vizcarra declared a 60-day state of
emergency in Madre de Dios and deployed a combined

army and police force of 1,500 to crack down on illegal
gold mining as well as kidnapping and other crimes.59 The
operation will be followed by the creation of alternative
economic opportunities including tourism, forestry,
and agriculture.60 Still, the quantifiable impact of thesepolicies on emissions and deforestation rates is unclear,particularly since levels are now consistently on the rise.
Peru’s forests are also a victim of the global cocaine
trade. Growth in coca production, the plant from which
cocaine is manufactured, is responsible for some 9% of
the country’s deforestation. University of Maryland satellite
data show that the situation is worsening as the illicit
drug business continues to prosper.61 In a reflection of theincreased attention to coca cultivation and its impacts
in the Amazon, the United Nations Office on Drugs andCrime (UNODC) said in its yearly report that coca-driven
deforestation has risen at alarming rates in the past two
years. Even so, the overall number of hectares deforested
for the trade remains relatively low and has received
attention largely because of activity in national parks andother protected areas.
The construction of the Interoceanic Highway thathas enabled small-scale gold mining exemplifies how
infrastructure development in Peru facilitates thetransportation of commodities and other activities
nearby, leading to deforestation. Looking forward, a new

FIGURE 6: PRICES OF SELECT COMMODITIES INDEXED TO 2016, 2001-2018
Source: International Monetary Fund

180

PRICE INDEX (2016=100)

160
140
120
100
80
60
40
20
0

PALM OIL

12COFFEE

SOYBEANS

Nearing the Tipping Point: Drivers of Deforestation in the Amazon Region

GOLD

BEEF

COCOA

MAY 2019law establishing national priority roads in Ucayali andother roads in the Loreto region has set the stage forinvestments in future infrastructure that will cut throughprotected areas and indigenous territories.62
CONCLUSIONS
Like other Amazonian countries, Peru must position
itself to promote sustainable economic development
alongside environmental conservation. In the agriculture
sector, for example, Peru could expand zero-deforestation
certification programs for both small and large companies.
For large-scale infrastructure development, governments
should ensure that environmental impact studies are
conducted early in the projects’ approval process andinclude input from all stakeholders. The government
should also expand protected areas and promote
alternative economic activities based on sustainable
resource use, including ecotourism, in these territories.
Currently protected areas, which include national parks,
wildlife refuges, and protected forests, account for only
15% of the country’s land.63
Peru should also commit to reforestation investments, forwhich finance could come from international institutions,multi-national corporations, or domestic sources. To
develop projects at either the national or sub-national level,
coordination between civil society, private companies,
the government, and environmental experts will be crucial

for long-term commitments to be realized and managed
effectively.
Given that a large part of Peru’s deforestation stems from
criminal activity, Lima should increase law enforcement
efforts to monitor illegal activity in the Amazon,
particularly in the most remote areas, where environmental
defenders have been killed in the last few years.64

Colombia
Deforestation in Colombia, the second-most biodiverse
country in the world and home to more than 60 million
hectares of forest,65 has surged in the past few years, led
by land-grabbing and agricultural commodity production
which has increased in the aftermath of the government’s
2016 agreement with the FARC. Last year, some 247,000
hectares of forest were lost in the Colombian Amazon (seeFigure 7), the highest annual rate ever for Colombia.66 In
total, forest loss has accumulated to 2 million hectares
since the beginning of the century, meaning more than
40% of total Andean Amazon forest loss has taken place inColombia, second only to Peru.
Such levels of deforestation are derailing Colombia’s ability
to meet its climate mitigation commitments. Under theParis Agreement, Colombia vowed to cut its greenhousegas emissions by 20-30% versus its “business-as-usual”

FIGURE 7: FOREST LOSS IN THE COLOMBIAN AMAZON, 2001-2018
Source: MAAP using data from Hansen/UMD/Google/USGS/NASA

250

HECTARES (THOUSANDS)

200

150

100

50

0

Nearing the Tipping Point: Drivers of Deforestation in the Amazon Region

13

scenario by 2030.67 Under the business-as-usual trajectory,
emissions would rise from 250 million metric tons
currently to over 330 million metric tons, compared to theParis target of 270 million metric tons.68 The government
has also committed to reaching zero net deforestation
by 2020 and eliminating all forest loss by 2030. Landuse changes account for almost 60% of total emissions.
Since Colombia’s congress ratified the agreement in 2016,
the country has developed climate change legislation,a carbon tax, and a ministerial committee on climatechange, among other initiatives. However, without areduction in deforestation, Colombia will likely fail to meetits climate targets.
The government has already taken measures to reverse
the upward trend in forest loss. For instance, in April 2018,
Colombia’s supreme court ruled in favor of protecting
the country’s rainforest by recognizing the Amazon as
an “entity subject of rights,” 69 which essentially gives
the forest the same legal rights as humans. Prior to thatdecision, in 2016, the national government created the
Amazon Vision Program to provide incentives for industry
and Amazonian communities to protect forests anddevelop the area’s resources sustainably.70 Other importantmilestones include the expansion of Chiribiquete National
Park71 and the indigenous territories south of the park
and the approval of the co-management agreement
between the indigenous peoples of Yaigojé Apaporis andthe National Park Service.72,73 In 2018, then-President
Juan Manuel Santos added eight million hectares to thecountry’s protected areas, putting the total at 40 million
hectares, or one fifth of total land, in an effort to curb landgrabbing.74
President Iván Duque, who took office in August 2018,
has declared reversing Colombia’s deforestation trend

High levels of deforestation are
derailing Colombia’s ability tomeet its Paris climate change
mitigation targets. Land-use
changes account for almost 60%
of Colombia’s total emissions.

14

Nearing the Tipping Point: Drivers of Deforestation in the Amazon Region

to be one of the primary goals of his 2018-2022 National
Development Plan. This document establishes the aim ofstabalizing deforestation rates at around 220,000 hectares
per year, until 2022, at which point they will begin to
decrease. Though environmentalists have criticized thisplan as unambitious, the government argues that thesetarget are aggressive, given that under current policies,
growth in deforestation would not begin to decrease until
2030.75 The government’s principal strategy for stemming
deforestation is to crack down on illicit activity, which it
estimates accounts for 70% of deforestation.76 It intends
to do so by increasing monitoring through the Instituteof Hydrology, Meteorology and Environmental Studies(IDEAM, by its initials in Spanish) and incorporating
agricultural databases into this monitoring, heightening
enforcement and prosecution by the armed forces, police,
and the justice system in areas of high illicit activity, andcreating alternative economic opportunities in these areas.
DRIVERS OF DEFORESTATION IN COLOMBIAThe recent sharp increase in deforestation has occurred
partly because of the vacuum created in the aftermathof the 2016 peace deal. When the FARC controlled vast
swaths of Colombia’s land, deforestation was curbed by
the rebels, who enforced strict limits on logging, partly tomaintain forest cover to protect from air raids.77 However,after members of the FARC demobilized, the government
failed to provide effective environmental oversight inthese large, remote areas. Other illicit groups, including
paramilitaries, members of the remaining leftist guerrillagroup the ELN (National Liberation Army in English), andformer FARC members took over these areas, scrambling
to colonize unoccupied lands by clearing forests. The
government estimated that deforestation increased by
44% in the year after the agreement.78 The province ofCaquetá, located in the Amazon and previously held under
FARC control, for example, has seen 40% of the country’s
deforestation since the peace accords, despite accounting
for just 12% of the national territory.79
These criminal groups continue to occupy abandoned
areas and engage in illegal activities, including crop
cultivation for illegal drugs, illegal mining, land-grabbing,and unregulated agricultural expansion. For instance, inthe year after the peace agreement, cocaine production
hit an all-time high, according to the UNODC.80 Some
171,000 hectares were used for cocaine production, a 17%
increase over 2016. There has also been an increase in
confrontations between indigenous peoples and ex-FARC
members as they invade indigenous territories to accessland. Environmental defenders are under greater threat

MAY 2019as a result. The Colombian government has responded byincreasing security forces to fight drug trafficking, but they
have failed to stop criminal activity or deforestation due tolimited manpower and insufficient technical support.
However, deforestation in Colombia is not limited to areas
formerly controlled by the FARC. Beyond those territories,
Colombia is struggling with Amazon forest loss stemmingfrom agriculture, cattle ranching, and infrastructuredevelopment. These activities often occur on illegally
seized lands. Land grabbing is rife in the Amazon, typicallyfor the purpose of land speculation or to expand cattle
ranches.
Cattle ranching ranks as a top driver behind both legal
and illegal deforestation in the Colombian Amazon. The
cattle sector plays an important role in the Colombian
economy: it makes up more than a fifth of the agribusinesssector and 1.4% of total GDP.81 The sector employs
810,000 people, generating 6% of total employment. Most
cattle ranching takes place in the Orinoquía and Amazon
regions.82 The industry is poised to grow further, making
it more challenging to mitigate deforestation risks. Since
the beginning of the last decade, the number of cattle
in the country has steadily increased, expanding at thehighest rates in the past few years. However, a large
share of Colombia’s territory is already dedicated to cattle
ranching, meaning there is little room for expansion. In
2016, some 37.5 million hectares of land were used forlivestock, which is the equivalent of approximately 80% of
all agricultural area in Colombia.83 Moreover, the country
is facing illegal cattle slaughtering and animal smuggling,further complicating efforts to regulate the industry’s
environmental impacts. Companies are also not as activein mitigating their impact on the Amazon as in othercountries. There are over 400 companies that operate
along the country’s beef supply chain, with more than 500
slaughterhouses. Yet only one publicly traded company—
Minerva—has a deforestation policy that specifically deals
with activity in the Amazon.
Infrastructure development, particularly transport
infrastructure, is another driver of deforestation in the
Colombian Amazon. Environmentalists registered a victorywhen the government put the building of the Marginal de laSelva highway on hold. This road, a $1 billion project, wasexpected to serve as a trade route, bypassing the Andes
Mountains and stretching from Venezuela to Ecuador.
Santos cited increasing deforestation as a factor behindhis decision to cancel the project.84 The construction ofmajor highways facilitates the creation of illegal roads andland-grabbing nearby because of the rising value of theland—which in turn facilitates even more forest loss.
Extractive industries can also cause deforestation as
infrastructure is built to transport oil, natural gas, metals,
and minerals. To date, the oil and mining sectors have not
had a significant impact on Amazon forests. However,following the peace accord, mining concessions areplanned in areas that were previously inaccessible dueto the conflict. Although it’s unlikely that these areas will
be developed in the short term due to ongoing security
concerns, new areas of the Amazon could be opened
to extractive industries in the longer term, potentially
increasing deforestation. In addition, there has beena surge in illegal gold mining that has created specifichotspots of deforestation along riverbeds.85
CONCLUSIONS
To solve the problems connected to deforestation,
Colombia, like other Amazonian countries, needs to face
both legal and illegal activity. Reforestation programs,
expansion of protected areas, corporate sustainability
incentives, and accountability measures are necessary toreverse current trends.
Colombia should work with international institutions andcorporations to attract investment to develop reforestation
programs. The government, civil society, and companies,
both domestic and multinational, can work withinternational alliances such as Tropical Forest Alliance
2020, a global public-private partnership whose mission
is to reduce commodity-related tropical deforestation, inorder to set reforestation targets and work to maintainthem.

The government, civil society,and companies, both domestic
and multinational, can workwith international alliances to
set reforestation targets andwork to maintain them.

Nearing the Tipping Point: Drivers of Deforestation in the Amazon Region15

It is also vital that stakeholders coordinate with companies
operating along agricultural commodity markets toincrease transparency and verify that their supply chainsare not linked to deforestation. The government can offer
fiscal incentives to promote private sector environmental
conservation.

5% would go to the National Park Service—a unique andpromising model. Still, more needs to be done.86 Expanding
protected areas, particularly indigenous reserves, andincreasing environmental authorities’ resources to manage
these areas would undoubtedly reduce deforestation in
Colombia.

With corruption and criminal activity in large part behindhigher deforestation rates, the Colombian government
should strengthen enforcement of existing laws andincrease accountability. Agricultural businesses,
infrastructure developers, and local governments havenot been properly held accountable for activity tied
to deforestation. It is crucial to strengthen central
government authorities’ ability to manage subnational
activity by administering funds, providing technicalassistance, and overseeing projects. Many local
authorities have a long history of corruption andconnections to organized crime, making national oversightnecessary. With proper instruction and supervision, local
actors can be leaders in the national debate and contributeto holding their peers accountable.

Bolivia

An increase in government funding for environmental
protection is also essential. Less than one third of 1%
of GDP goes to programs to protect the environment.
The recent carbon tax has allocated 25% of its revenues
to benefit the environmental sector, and of this amount

Since 2001, deforestation has risen sharply in Bolivia,
with areas in the south, outside Santa Cruz province,as the main hotspots. Some two-thirds of the country’s
forest loss has taken place in or near Santa Cruz, largely
because of agribusiness activity such as cattle ranchingand soy production. Per capita, the country has one of
the highest deforestation rates in the world.87 According
to government figures, legal deforestation in the country
as a whole has been increasing at a faster rate thanillegal deforestation, soaring from just 10,244 hectares
in 2012 (an 8% share of the total) to 124,062 hectares(48% of the total) in 2017.88 This is owed to governmentpromoted expansion of agriculture, large energy projects,
and infrastructure, even in protected areas. There has
been some positive news: within the Bolivian Amazon,
the area deforested in 2018 declined by 46% compared tothe previous year, totaling 111,083 hectares, according to
MAAP (see Figure 8).

FIGURE 8: FOREST LOSS IN THE BOLIVIAN AMAZON, 2001-2018
Source: MAAP using data from Hansen/UMD/Google/USGS/NASA

300

HECTARES (THOUSANDS)

250
200
150
100
50
0

16

Nearing the Tipping Point: Drivers of Deforestation in the Amazon Region

MAY 2019

Deforestation has clearly contributed to Bolivia
significantly lagging on its climate goals. Some 80%of the country’s greenhouse gas emissions stem fromdeforestation.89 Its emissions per capita are on parwith those of many European countries even though
Bolivia ranks 122nd in the world in GDP per capita while
12 European countries make up the top 20.90 With
approximately 50% of the country covered in forest, halting
deforestation is essential to meeting the country’s Paris
commitments.
Under the Paris Agreement, Bolivia pledged to reachzero illegal deforestation by the end of this decade andincrease net forest cover to 54 million hectares (up 1.5
million hectares from current levels) by 2030, among otherland-use actions.91 In its action plan for Paris, Bolivia said
it would seek “adoption of a new model of civilizationin the world without consumerism, war-mongering,and mercantilism, a world without capitalism.”92 Yet,the government has pushed to expand the agricultural
sector without creating proper safeguards to ensure thatcompanies operating in the country do not contribute to
deforestation. Given recent deforestation trends in the
country, Bolivia is clearly well behind its 2020 goal ofachieving zero illegal deforestation.
President Evo Morales has pursued ambitious plans for
economic development but environmental oversight of
the agricultural industry and infrastructure projects has
been weak. Morales has long sought to expand Bolivia’s
agricultural frontier.93 In September 2018, he signed alaw to use bioethanol in gasoline, an incentive to sugar
production.94 In 2017, Morales approved a 190-mile
highway through the Isiboro Secure Indigenous Territory
and National Park despite local opponents who claimed it
would open the park to logging and coca farming, as wellas oil and mining operations.95 Running for a fourth termin October 2019, Morales will be able to point to strong,sustained GDP growth, but he is losing support among
his indigenous base as he paves the way for unchecked
development in previously remote areas.96
DRIVERS OF DEFORESTATION IN BOLIVIA
Bolivia, like the other countries experiencing increasing
deforestation, faces rapid forest loss owing to agricultural
expansion, while illegal activity is adding to forest
destruction. Bolivia has implemented a variety ofmeasures aimed at environmental protection. The Mother
Earth Law, for example, essentially gives rights to natureand holds individuals and companies responsible forenvironmental destruction.

However, conservation efforts are undermined byPresident Evo Morales’s strategy to encourage expansionof agribusiness and “food sovereignty.” Bolivia is a landlocked country, limiting its opportunities for international
trade and driving its efforts to reduce dependence on
imports of food and other commodities. The country’s
economy is also highly dependent on agriculturalcommodities. The sector employs approximately 1.4
million people, which constitutes some 30% of theworkforce. Agriculture’s influence on the economy had
been on a steady decline from the mid-1980s, but its shareof GDP is on the rise again, reaching 11.5% in 2017.97 A
variety of companies are investing in Bolivia’s agriculture
sector—some that operate in Argentina and Brazil haveentered Bolivia to expand their Latin American operations.
Currently, Bolivia is expanding its beef and soy industries
to feed its own growing population (now at 11 million) andalso reach neighboring export markets when economics
are favorable.
The soy and cattle industries are the main drivers
behind rising deforestation, both legal and illegal. Other
commodities, including sugar, have also contributed toforest loss. From 2017 to 2025, the country expects toclear some 5.7 million hectares of rainforest to use as
farmland.98
In the soy market, there are generally three types of
producers. Small farms are owned by families that holdless than 50 hectares of land. In Santa Cruz, they own
more than 80 percent of the farms and occupy almost aquarter of the crop area.99 Producers of medium size—with
farms of 50-500 hectares—make up just over 20% of land
used for soy cultivation. Estimates suggest that two thirdsof these farms are owned by foreign enterprises. The
large farms, which are greater than 500 hectares, make up

The soy and cattle industries are
the main drivers behind risingdeforestation, both legal andillegal, in Bolivia. The country’s
agricultural sector employssome 30% of the workforce.

Nearing the Tipping Point: Drivers of Deforestation in the Amazon Region17

56% of farmland in Santa Cruz but are owned by only 3%of the companies.100 In order for the government to curb
deforestation, it must provide incentives to companiesof each size, which have overlapping interests but also
conflicting needs.
The country’s beef industry is looking to expand
aggressively, with exports rising, particularly to lucrative
markets such as Russia and China. The country had 9.3
million cattle in 2017, enough to produce 258,000 tonsof beef, of which 7% was exported. Approximately 40%
of cattle production currently takes place in Santa Cruz.
The Bolivian Foreign Trade Institute (ICBE, by its initials in
Spanish) projects that by 2025 Bolivia will export 117,000
tons of beef per year.101 Morales has stated that he sees
the cattle herd rising to 30 million by 2025, an ambitious
goal aimed at capitalizing on export opportunities but one
that would increase deforestation if better environmental
regulations are not in place.102
As commodity production has grown, particularly in
Santa Cruz, infrastructure to transport supply has also
contributed to higher deforestation rates.103 Chinese
investment through the Belt and Road Initiative (see Figure9) has helped finance transport and energy infrastructure,including in the Amazon. Indeed, Bolivia has been aparticular focus for Chinese construction companies,
which have pursued more than 20 road and bridge

projects in the country since 2013, as well as several
dam projects.104 The government’s ambitions to export
electricity to neighboring countries have also given rise
to a number of hydroelectric dam projects, including near
Madidi National Park in the Amazon region105 and inside
Carrasco National Park, a project whose environmental
approval raised concern.106 At least seven more dams areplanned.107
Forests are also commonly destroyed through fires toclear land for farming, particularly in the Santa Cruz andBeni provinces. For instance, during the first eight monthsof 2016, the number of fires quadrupled compared to theprevious year.108
Amid this expansion of the agriculture sector, thegovernment has failed to enforce laws against
deforestation or issued only minor penalties. Companies,
for their part, have not taken appropriate action to produce
deforestation-free products. For instance, no soy produced
and sold in Bolivia has been certified, according to theRound Table on Responsible Soy (RTRS), despite available
certification.109 While agriculture expansion accounts fora majority of legal deforestation, illegal logging remains agreater problem in Bolivia. The Forest and Land Monitoring
and Control Authority, for instance, estimates that 52% of
all deforestation in the country is illegal.110

FIGURE 9: CHINESE TRANSPORT INFRASTRUCTURE DEVELOPMENT
Source: Inter-American Dialogue. Shows planned and completed projects, 2002-2018.

18

Nearing the Tipping Point: Drivers of Deforestation in the Amazon Region

MAY 2019

CONCLUSIONS

EcuadorTo mitigate deforestation risks in the land sector, Bolivia
can advance reforestation and improve land-sector
management, both of which can provide opportunities
for sustainable economic development. To develop
practical and durable solutions, the Bolivian government
should work closely with the agriculture industry, given
its association with deforestation-related activity.
One opportunity is to connect agricultural subsidies
to environmental protection and zero-deforestationagreements. The government can also foster collaboration
between major traders and small farmers to eliminate soyand beef linked to deforestation in their supply chains. It is
important for the economy to provide financial incentives
for companies to use only soy that is certified by RTRS.

Levels of Amazon deforestation are not as high in
Ecuador as in the countries previously discussed since theEcuadorian Amazon makes up only 2% of the total basin.
The country has taken important measures in recent years
to slow deforestation through the creation of protectedareas, where conservation has been largely successful.
But the production of agricultural commodities and theopening of areas of the Amazon to oil and mining activity,
which has not been coupled with adequate enforcementof environmental regulation, have led to increased
deforestation.

Bolivia can work with NGOs, international and domestic
companies, or international institutions to put fortha robust reforestation plan. Several environmentalorganizations have successfully established projects toprotect specific areas and avoid deforestation in parts ofBolivia. Establishing a plan to monitor protected areas andnational parks will be crucial in keeping deforestation fromrising.

From 2001 to 2018, some 429,000 hectares of the Amazon
were deforested in Ecuador, with a peak of over 63,000
hectares lost in 2017, (a 72% year-over-year increase)111(see Figure 10). Ecuador is responsible for 9% of total
deforestation in the Andean Amazon region. The Orellana
province, in the northern Amazon zone of the country, isthe main hotspot for deforestation related to agriculturaldevelopment. Meanwhile, Morona Santiago, in thesouth, is now the Amazonian province with the highest
deforestation rate in the country, largely thanks to aseries of major roads crossing it and the resulting landcolonization.

FIGURE 10: FOREST LOSS IN THE ECUADORIAN AMAZON, 2001-2018
Source: MAAP using data from Hansen/UMD/Google/USGS/NASA

70

HECTARES (THOUSANDS)

60
50
40
30
20
10
0

Nearing the Tipping Point: Drivers of Deforestation in the Amazon Region

19

Ecuador’s commitments to the Paris Agreement included
extensive reforestation plans. The country committed to500,000 hectares of reforestation by 2017, and another
100,000 hectares by 2025. The government estimated that
it was able to reduce CO2 emissions by some 28 million
tons with reforestation efforts from 2008 through 2014,
a sign that it could reverse current trends through proper
forest management.112 However, the country has woefully
fallen short of its targets.
In 2008, the government of then-President Rafael
Correa made Ecuador the first country in the world toinscribe legal rights for nature in its constitution.113 The
implementation of the Ministry of the Environment’s Socio
Bosque program (part of the United Nations “reducing
emissions from deforestation and forest degradation indeveloping countries” or REDD+ program), which provided
economic incentives to landowners that held native
forests, was a bold recognition of these rights. From 2009
to 2014, the country was able to cut its deforestation
rates by almost 50%.114 However, other actions during
Correa’s tenure conflicted with this change, including theconstruction of eight new major dams by Chinese firms115
and the auctioning of oil acreage in the megadiverse
Yasuní National Park.
As in other policy areas, President Lenín Moreno, whotook office in May 2017, has broken with his predecessor.
In early 2018, he held a referendum in which more than
two thirds of the voting population opted to reduce thearea in which oil extraction was allowed in the park.116 The“Reverdecer Ecuador” program, initiated in 2018 with a$330 million budget, includes reforestation programs.117
Moreno has also canceled more than 2,000 previously
awarded mining concessions and fired his minister ofenvironment for failing to annul one. 118 In October 2018,the ministries of agriculture and environment signed anagreement with the Confederation of Indigenous Nationsof the Ecuadorian Amazon to increase collaboration on

In early 2018, more than two
thirds of Ecuador’s voting
population opted to reduce thearea in which oil extraction wasallowed in Yasuní National Park.

20

Nearing the Tipping Point: Drivers of Deforestation in the Amazon Region

sustainable development and prevention of deforestationin the indigenous Amazon.119
DRIVERS OF DEFORESTATION IN ECUADOR
Agricultural expansion plays a major role in deforestationin the Ecuadorian Amazon, and small-scale ranchingand production of commodities such as palm oil are key
drivers. The country’s economy depends on a wide varietyof commodities including not only cattle and palm oil, butalso coffee, cacao, sugarcane, and dairy, among others.
The agriculture industry makes up only 6% of the economy,
but employs almost 30% of the country’s workers and uses
30% of its land.120 Within the Ecuadorian Amazon basin,
agricultural activities make up almost 60% of income,with cattle farming consisting of 10% and “mixed farming”
30%.121 Productivity is, for the most part, relatively low,which creates inefficient land use.
From 1990 through 2008, agricultural expansion
contributed to an overwhelming majority of deforestationin the northern Ecuadorian Amazon.122 As in many otherAmazonian countries, cattle ranching is the greatest
driver of land-use change. The sector is dominated bysmall-scale landowners that raise cattle alongside otherlivestock, while larger companies are growing theiroperations.
Palm oil is a key driver of deforestation in the northern
Ecuadorian Amazon, according to MAAP.123 Ecuador isthe sixth-largest palm oil producer in the world, and thesecond largest in Latin America, behind Colombia. Even
though the industry is a small part of the overall economy,
it represents a large share of the country’s exports, andits growth could increasingly influence deforestation
rates in the future. Half of the country’s total supply isexported,124 and approximately 90% is produced by small
landowners, who are responsible for an overwhelming
majority of deforestation from palm oil in the Amazon.125
Companies typically acquire land for palm oil production
either by obtaining concessions in the Amazon fromthe government, buying land through intermediaries, orpurchasing areas from indigenous communities.126 Mostof the palm oil from Ecuador comes from the coast and
Chocó regions (Esmeraldas Province) where deforestation
rates are the highest, but production in the Amazon
accounts for 13% of the country’s total.127
The government has introduced measures to reduce
deforestation related to palm oil production that could
serve as a model for reducing environmental impactsof other commodities as well. Rather than encouraging

MAY 2019

companies to join the Roundtable on Sustainable Palm
Oil (RSPO)—a certification body active in southeast Asia
that determines whether palm oil is deforestation-free—
Ecuador takes a jurisdictional approach. This systemallows each province to certify that palm oil supply is
not tied to deforestation or labor abuses.128 Advocatesof this method value that governments are directly
involved, allowing them to use their power to negotiate
terms with local farmers to implement efficient supply
chains, curb environmentally damaging practices, anddevelop systems where producers can see profit margins.
Critics, in turn, claim that the government may not be
stringent and vigilant enough to enforce best practices,
allowing companies to operate unregulated, and that local
governments are vulnerable to corruption. The government
also provides tax breaks for palm oil exporters that invest
in sustainability efforts—which could be a model for
incentivizing other industries. Quito is also coordinatinga $1.2 billion investment to support local growers andstimulate research and development to limit deforestation
associated with palm oil production.129
Beyond the agricultural sector, oil operations have also
had a modest impact on Ecuador’s Amazon deforestation
rates due to the government’s decision to open the Yasuní
National Park to drilling.130 Although Ecuador’s constitution
prohibits hydrocarbon and mining activities in protectedareas, in 2013, Correa approved oil exploration contracts in
the Ishpingo-Tambococha-Tiputini (ITT) oil field complex in
the park, citing the national interest. Ecuador’s oil industry
is central to the economy, making up one third of totalexport revenue.131 The ITT, which holds over one billion
barrels of oil, stretches through Amazonian rainforest
in the eastern part of the country. Despite opposition
from environmental NGOs and indigenous peoples, thegovernment auctioned off some three million hectares ofland to Chinese oil companies. This included an agreementthat the China Development Bank would lend at least $1
billion to Ecuador in exchange for the rights for Chinese
firms PetroChina and Andes Petroleum to drill in thepark.132 Production began in the ITT block in the summerof 2016.
MAAP satellite data show that within Yasuní National Park,oil exploration and production has led to slightly morethan 400 hectares of deforested land.133 Although this is arelatively small area, the ITT, a 3,800-square mile stretchof Amazonian rainforest, is one of the most biodiverse
habitats in the world, home to more than 4,000 plant
species and wildlife.134 Given its vast oil reserves, the fieldcomplex is expected to produce oil for many more years.
The government’s decision to permit oil exploration andproduction within this national park also raises concerns
about whether drilling will be allowed in the eastern andsouthern sides of Ecuador’s Amazon region, leading tofurther deforestation.
CONCLUSIONSThe Ecuadorian government should further explore andstrengthen forest conservation incentive programs withnational and international funding. The county’s successin fighting deforestation during the 2009-14 period caninform Ecuador’s policies going forward. With international
financing and support, the government should viewprotected areas as a way to reverse the recent uptickin deforestation and meet its Paris commitments. The
Ministry of the Environment’s Socio Bosque Programprovides valuable guidance on the most effective
approaches.
The government, in collaboration with industry, should
monitor RSPO work to ensure that the jurisdictional
approach is effective in keeping small farms, domestic
companies, and large international firms in compliancewith environmental and labor standards. Providing
financial incentives to producers, traders, and retailers
can help actors along the palm oil supply chain cooperate
and reduce financial and reputational risks by avoiding
deforestation. The government could extend this modelto other agricultural sectors, providing fiscal incentives to
produce sustainable commodities.
To avoid deforestation in the Amazon related to oil
production, the government should strengthen and enforce
regulation for oil and gas exploration in national parks andAmazonian areas. The 2008 Constitution assigns rights tonature and prohibits oil exploration inside national parks.
However, if it is not feasible for Quito to comply with theban on drilling in all sites connected to the Amazon, it isimperative that regulators impose the strictest standards
on the industry to minimize environmental damage,whether that includes deforestation, infrastructuredevelopment, transportation, or oil spills.
More broadly, the government should expand the systemof protected areas established in the 1970s to safeguard
Ecuador’s critical ecosystems and biodiversity. The
government, with support from civil society, should also
focus on strengthening indigenous territorial management
since large areas are owned and managed by indigenous
peoples, especially in the southern Amazon region (thePastaza and Morona Santiago provinces) and surrounding
the Yasuní National Park.

Nearing the Tipping Point: Drivers of Deforestation in the Amazon Region

21

POLICYRECOMMENDATIONSTO TACKLE AMAZON
DEFORESTATION
				

1

		

Promote sustainable agriculture and ranching

Cattle ranching and other agriculture industries, particularly soy and palm oil, are important sources of exports,
investment, and employment in many South American countries. However, these industries are also the top driversof deforestation in the Amazon. Governments should promote transparent, sustainable supply chains for theseindustries—for example, by requiring commodity traders and other downstream actors to buy only from producers
that do not operate on deforested land. They should also create fiscal incentives for agribusiness companies toadopt zero-deforestation policies and link any agricultural subsidies to environmental protection. For small-scale
farmers, direct compensation or subsidies for conservation of forests may be the most effective way to prevent
land clearing for agricultural expansion.

				

2

			

Design transparent, sustainable infrastructure programs

Infrastructure in Amazonian countries is often designed and built without sufficient transparency
and government oversight. Governments should evaluate and mitigate the environmental impacts
of infrastructure (particularly roads, but also hydroelectric dams and other energy and transport
infrastructure), introducing environmental criteria early in the planning process with input fromindigenous peoples and civil society. Governments could also require companies in environmentallysensitive areas to use existing infrastructure to avoid exacerbating the environmental impact of
economic activities.

22

Industrias extractivas y regulaciones ambientales en el posconflicto: Preguntas clave para el nuevo gobierno Colombiano

DIÁLOGO INTERAMERICANO | FEBRERO 2018

				

3

			

Increase forest protection monitoring and enforcement

While legislation to curb deforestation could be improved, in many countries the more immediatechallenge is to effectively monitor and enforce existing laws and regulations for forest conservationin the Amazon region. Governments should increase their budgets for monitoring and enforcement,
including for more staff to visit sensitive sites as well as equipment such as helicopters and satellite
monitoring. In most countries, law-enforcement officials also need to be involved given the illicit natureof activities that drive illegal deforestation.
				
			

4

Expand protected areas

Although considerable gains have been made, Amazonian countries should further expand protectedareas, including national parks and indigenous reserves, while improving management of existing ones
to ensure zero deforestation in these areas. Governments should differentiate between protected areasthat are completely off limits to economic activity and those that allow sustainable farming, sustainableenergy projects, ecotourism, or other activities with appropriate environmental safeguards.
				

5

			

Strengthen reforestation programs

Governments can employ various mechanisms to encourage reforestation, such as the United Nations
REDD+ programs, national carbon taxes or cap-and-trade systems, or corporate reforestation programs.
It is critical that governments in the Amazon region commit to multi-year reforestation programs to meettheir Paris targets. Central governments should provide technical assistance and capacity building tolocal government counterparts to design reforestation and sustainable development projects that canaccess international climate finance.

Industrias extractivas y regulaciones ambientales en el posconflicto: Preguntas clave para el nuevo gobierno Colombiano

23

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89. “The Ultimate Mystery Meat.” Mighty Earth. http://www.
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92. Ibid.
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94. Casey, Nicholas. “In Bolivia, Morales’s Indigenous Base
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95. Collyns, Dan. “Bolivia Approves Highway through Amazon
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96. Casey, Nicholas. “In Bolivia, Morales’s Indigenous Base
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97. “Bolivia GDP Share of Agriculture - Data, Chart.”
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98. Tabuchi, Hiroko, Claire Rigby, and Jeremy White. “Amazon
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99. “Bolivia Soy Risk Profile.” Soy - Bolivia | Nature Economy and
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100. Ibid.
101. “Bolivian Beef Producers Taking Aim at Global Market.” EFE.
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102. “Bolivia Supports Beef Exports.” Prensa Latina. n.d. https://www.
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103. “Forest Governance - Bolivia: Global Forest Atlas.” Yale Schoolof Forestry and Environmental Studies. n.d. https://globalforestatlas.
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104. Myers, Margaret. “China’s Transport Infrastructure Investment in
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106. “A Park in Bolivia Bears the Brunt of a Plan to Export Electricity.”
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107. Ibid.
108. “REPORTE DE FOCOS DE CALOR.” ABT. August 16, 2016.
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111. “MAAP Synthesis #3: Deforestation in the Andean Amazon(Trends, Hotspots, Drivers).” MAAP. January 2, 2019. https://
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112. Guedez, Pierre-Yves, and Bruno Guay. “Ecuador’s Pioneering
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114. Serrano, P., C. Rosero, and C. Paz. “Inter-Institutional Committee
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116. “Ecuador Votes to Reduce Oil Exploitation in Yasuní National
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117. Redaccion, El Universo. “Para ‘reverdecer’ Ecuador Se Prometen$ 330 Millones.” El Universo. February 18, 2018. https://www.
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118. Redaccion, El Universo. “Lenín Moreno Anuncia Plan De
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122. Ibid.
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124. “Ecuador Palm Oil Exports by Year.” United States Department ofAgriculture. https://www.indexmundi.com/agriculture/?country=ec&c
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134. Ruiz, P. “Ecuador Begins Rainforest Drilling in Effort to Avoid
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Nearing the Tipping Point: Drivers of Deforestation in the Amazon Region