Climate Fund and Amazon Fund

In 2010 the Brazilian government established the National Fund on Climate Change (Climate Fund), a pioneering effort that will use resources raised from a special tax on the profits made in the oil production chain to finance climate change mitigation and adaptation drives. The Climate Fund will play an important role in promoting Brazil's low carbon sustainable development model.

The Climate Fund will support activities aimed at combating desertification, adapting to climate change, education and training initiatives, REDD+ projects, technology inclusion development, public policy formulation, support for sustainable production chains, payment for environmental services, and other activities.

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For 2011, the Fund has a budget of R$ 226 million, R$ 200 million being repayable loans and finance for the production area, which will be managed by Brazil's state-owned development bank, BNDES. The other R$ 26 million will be administered by the Environment Ministry for investment in research projects, mobilization and assessment of climate change impact, and may be passed onto states and municipalities through agreements. This is the initial budget. The fund will also receive income from other sources, including international donors, which may be established under the Climate Convention.

The Amazon Fund

The Amazon region covers 60% of Brazil's territory and is a priceless natural asset. The region is of fundamental importance because of its impressive biodiversity, the cultural diversity of its population, its economic potential and the strategic role played by forests in the planet's environmental stability.

For the Brazilian climate agenda, the protection of the Amazon forests is a priority. After all, 61% of greenhouse gas emissions in the country, according to the government inventory, stem from changes in land use, including deforestation. It is for these reasons, on the way to contributing to a global strategy to combat the effects of climate change, that Brazil is engaged on several fronts to reduce deforestation in the region. Among them is the creation of the Amazon Fund which will ensure the resources to maintain the largest rainforest in the world and to support traditional communities in creating sustainable livelihoods.

The fun's initiative is pioneering: to get donations for investment in the prevention, monitoring and combating of deforestation, in conservation and the sustainable use of Amazon forests. Created in 2008, the fund has approved eight projects, which will get resources in periods of three to five years.

Resources

The Norwegian government pledged to donate one billion dollars as soon as the creation of the Amazon Fund was announced. It is also open to donations from other countries. Fundraising for the Amazon Fund is conditional upon the reduction of greenhouse gas - GHG - emissions from deforestation.

The projects approved by the Amazon Fund are focused on combating deforestation, increasing conservation and the sustainable use of the rainforest. Up to 20% of the Amazon Fund resources can be used to support the development of systems for monitoring and control of deforestation in other Brazilian biomes and other tropical countries.

Its innovative profile is also down to the alignment of its operational structure with the latest principles of the Reduction of Emissions from Deforestation and Degradation (REDD), currently under intense global debate in negotiations on climate change.

Brazilian society is amply represented on the Amazon Fund Steering Committee, responsible for defining the main guidelines to be implemented. The committee is made up of representatives of the federal government, Amazonian states and civil society. This diversified participation makes the fund transparent, as every segment has access to information on decisions made by the Steering Committee, the resources invested and the progress of the projects benefited. The public can also access information through the disclosure made by BNDES.