State Guides - Amazonas

Located in Brazil’s north-west and made up of 62 municipalities, the Amazonas is the largest state in terms of area of which 98 percent is made up of dense forest. Its neighbouring states from the south, anti-clockwise are: Acre, Rondônia, Mato Grosso, Pará and Roraima and it also borders Colombia, Venezuela and Peru. The state is home to the largest mountain in Brazil: the Pico da Neblina and its climate is largely tropical (there is no dry season with the average precipitation being 60 millimetres).

The general consensus with regards to its geographical history is that the river was formed some fifteen million years ago as a result of the rising of the Andes and the subsequent linkage between the Brazilian and Guyana bedrock shields causing the Amazon to effectively become an inland sea. As time went on, the area became a massive swamp which began to attract the massive growth of marine life. After approximately 5 million years, the waters changed their course of direction caused by movements of the sandstone that supported the flow of the river and it was this after this time that the forest started to grow. During the ice age, the level of the river dropped leading to exposure of wide spaces of land that gradually allowed for a wide range of mammals to migrate to the area.

Today, the land consists of permanently submerged terrain (known as igapos); partly-submerged land, mainly during the wet season (known as varezeas); savannahs; deciduous forests as well as wide plateaus which are never submerged. The Amazon is the most voluminous river in the world (with the largest discharge); is the second longest (after the Nile) and has over 1,100 tributaries (17 extend for over 1,000 miles with the Madeira and the Negro being larger than the Congo river). The river mouth reaches 300 miles in width during the regions high water season, with over 500 billion cubic metres heading into the Atlantic Ocean. The Amazon possesses over half of the globes rainforest (some 4.1 million square kilometres of which 3.4 million is forested; including the area outside of Brazil the total area is at 8.24 million square metres) and is considered of significant importance – with a huge range of biodiverse flora and fauna (over one third of the worlds species live in the region, which no other part of the world is able to offer).

The rainforest has a long period of human habitation and large indigenous communities existed prior to the arrival of European settlers in the 15th century. Anthropological studies indicate that some 12 percent of the forests current biodiversity was formed as a result of the careful and meticulous management of former indigenous tribes who used their own accustomed cultivation techniques to encourage permanent sustainability. The area was first taken joint ownership by the Spanish and the Portuguese as a result of the Treaty of Todesillas in 1494 which slowly led to the disappearance of the bigger communities (some estimates point to a 90 percent decrease). In reality however, it was the Portuguese that commanded the small settlements within the region which resulted in the state being ceded by the Spanish as a result of the Treaty of Madrid in 1750. The economic stature of the state began in the 1850s during the rubber boom, yet at the cost of thousands of lives of slaves (the industry subsequently collapsed towards the 1900s due to the attraction of cheaper produce in South East Asia).

Modern day Amazonian residents, whilst still retaining many of their traditional roots, are considerably more influenced by the world outside of the forest. Most indigenous communities would hunt and gather much of their food and supplies but have, over the years, become to reliant on external sources to supplement their needs. Social mobilisation has also led to younger people to aspire to move to the bigger cities of the north such as Manaus and Bélem.

Among the main risks are illegal deforestation; air pollution (including nitrogen oxide, carbon monoxide and hydrocarbons); mining companies looking to profit from the land (often illegally); unintentional burning; river sedimentary deposits (leading to water scarcity and water quality to deteriorate); poaching and wildlife smuggling. Much progress was also made in 2009 on the United Nations Collaborative Programme on Reducing Emissions from Deforestation and Forest Degradation in Developing Countries – also known as REDD: a proposed climate change mechanism that would effectively allow tropical countries to be paid for protecting their environment. Focus is now being made on its implementation, financing and governance rather than the actual ideology, which has widely been viewed as positive. In late 2009, the government of Brazil publicly announced its commitment to eliminating the practice of deforestation under its plan to reduce greenhouse gas emissions. The country’s targets are for a 70 percent cut in deforestation rates by 2020 through the means of continued law enforcement; incentives to locals encourage keeping trees standing; subsidies for business to be more environmentally responsible and further expansion of protected areas. These cuts would assume an annual economic growth of between 4 and 6 percent and would not hamper the economy. According to Environmental Minister, Carlos Minc: “Brazil will grow and develop – we will create more green jobs, more efficient jobs, a cleaner energy matrix and more efficient agriculture.” As a result, more foreign countries have also announced their support for anti-deforestation policies – for example Norway, in 2010, announced an increase in its contribution to the Amazon Fund to $USD 150 million. Prime Minister Jens Stoltenberg stated: “our financing of the fund is results based and, given the reduction, it’s very encouraging that deforestation continues to decline in the Amazon.” Indeed, a detailed study by the ‘Science’ magazine revealed that, whilst deforestation generates short-term benefits, its long-run profit levels are comparatively low due to the very unsustainable nature of its business model.

Whilst such developments for Brazil are to be viewed as favourable and will have long term implications for conservation and the protection of the environment, much work needs to done to ensure the programmes are maintained and developed. Things to monitor include the implications of large scale land acquisitions of land by multi-nationals; the impact of the global economic recovery on the environment; future global climate negotiations; the implementation and progress of the REDD mechanism; land control; sustainable forest management; the cap-and-trade versus carbon tax schemes and how the demand side of deforestation will be managed whilst maintaining targets.

In parallel to the resource wealth that Brazil possesses, a growing premium on reducing and sequestrating carbon emissions to mitigate the negative effects of climate change is naturally favouring the Amazon. An increasingly attractive option therefore being offered to investors is the purchase of carbon credits for which there are several companies throughout Brazil that act as brokers. In short, carbon credits are a financial instrument that’s value is assigned to the offsetting of greenhouse gas emissions. The continued growth of their trade is widely being expected due to the importance of global environmental protection: an increasingly valuable intangible commodity. Normal investment due diligence procedures should be undertaken as well as the use of an experienced lawyer to investigate the company’s background and legitimacy.

In terms of tangible acquisitions, it is a common misconception that large tracts of land can be purchased when a smaller proportion is actually, in reality, physically available (largely due to warranted concerns of conservational protection, as stated above). Furthermore, the acquisition of the Amazonian land that is available is rarely simple due to the fact that it often subject to a long generational ownership chain search, which will need to be traced and approved before title can be legally transferred (there are also several supplementary legal checks).