Mato Grosso: reconciling production with preservation

The Brazilian state of Mato Grosso is pursuing a coordinated, state-wide approach to forest conservation, which brings together government, businesses, and NGOs.

Described as the world's largest example of a 'jurisdictional' approach to sustainable development, it seeks to increase the efficiency of agricultural production, while also protecting forest cover, enhancing biodiversity, and improving the prospects of family farmers and indigenous peoples - with the ultimate goal of avoiding six gigatons of carbon emissions.

We take a look at the background, the progress made so far, and the prospects for the future.

To get a feel for the Brazilian state of Mato Grosso, you might want to open-up your laptop and launch Google Earth.

Type in the words Mato Grosso (which, in Portuguese, mean thick forest) and you find yourself hovering over a vast swath of central South America. Immediately, you get a sense of the scale of this gargantuan landlocked state. At 903,000 square kilometres, it’s the size of France and Germany combined – or, put another way, you could easily lose the whole of Texas within its borders, and have enough room leftover for more than half of California.

Start to descend, and you see plenty of variety. In the North is the dense, moist rainforest of the Amazon, in a belt across the centre are the lush savanna grasslands of the Cerrado while, pushing their way into the Southwest, are the tropical wetlands of the Pantanal. And, reflecting this diversity in landscapes, the state is also home to more than 40 indigenous peoples.

What you don’t see is urban sprawl. Across Mato Grosso’s 114 municipalities, the population density is less than four people per square kilometre (by contrast, Europe’s least densely populated country, Norway, is home to 14 people per square kilometre). And by far the largest of the few scattered cities is the state capital of Cuiabá with a population of just half a million (similar in size to say Dresden or Dublin).

Recognising an innate tension

Despite the scale and diversity, there is a common denominator to Mato Grosso. Because, almost anywhere you choose to zoom-in on Google Earth, you soon sense an innate tension between the muted colours of agricultural land – contained within the straight lines of vast, geometrical fields – and the deeper greener tones of the native vegetation, which still covers 62% of the land area.

Start to read about Mato Grosso’s economy, and you begin to appreciate how this tension plays out in everyday life. Even though it generates less than two per cent of Brazil’s GDP, Mato Grosso is an agricultural powerhouse – the country’s largest producer of soy, maize, cotton, and sunflowers, where cows outnumber people by a ratio of ten-to-one.

There is an insatiable global appetite for all this produce. Once a poor relation to Brazil’s better known coastal regions, Mato Grosso is finally on the up. A recent article in the Financial Times vividly describes an agribusiness-fuelled boom, a frontier-like spirit, a mood of optimism, and strong support for Brazil’s pro-business federal government. As one newly wealthy farmer explains: “We could go over to China and slap them in the face and they would still come and buy our soyabeans because they don’t have another option.”[1]

The pull is set to get much stronger. In the next 20 years, there is expected to be a 35% increase in world demand for meat[2]. And by the end of this decade, the demand for soyabeans is set to increase by 70 million tons – half of which will be satisfied by Brazil, where the area under production is forecast to grow from 36 to 45 million hectares[3].

So, how can all of this be reconciled with the global imperative to protect our remaining tropical forests? How can Mato Grosso’s landowners be dissuaded from cultivating their own property when, economically, it is worth so much more to them as farmland than as forest? And, in a remote, sparsely populated state of such colossal proportions, how can land-grabbing and illegal logging be effectively monitored and policed?

Fortunately, there is another side to the Mato Grosso story.

Despite the surge in agricultural production, the rate of deforestation remains at around 15% of its 2004 peak, there is an ambitious, well-regarded programme in place to minimise further losses, and some cautious optimism that Mato Grosso can be successful in reconciling production with preservation.

The story dates back to the Paris Climate Convention in 2015, when the government of Mato Grosso launched its three-stranded PCI Strategy:

· P for Produce – to expand and increase the efficiency of agricultural production

· C for Conserve – to protect native vegetation and restore degraded areas

· I for Include – to improve the living standards of family farmers and indigenous peoples

It may sound utopian. The goals may appear mutually exclusive. But the state government had already proved its mettle. A decade previously, Mato Grosso had by far the highest levels of deforestation in the Brazilian Amazon. Yet it had been more successful than any other state in arresting the growth, had put tough new environmental policies and protections in place, and was confident it could continue on the same trajectory.

The PCI Strategy was a way to articulate the vision, rally support and find consensus among many different stakeholders, corral together a wide range of sustainable development initiatives, secure the level of external funding that would be needed to limit further deforestation – and, ultimately, avoid the 6 gigatons of carbon emissions that would otherwise ensue.

How do we judge the success, and prospects for the future?

“We have had a lot of success in attracting partners,” explains Fernando Sampaio, Executive Director of the PCI Institute, the independent body that was established to coordinate the delivery of the strategy. “All of the key players in government agencies, civil society, and private business are engaged and largely aligned. And they all understand that Mato Grosso has a vision, has a strategy, has a plan, has targets, and has reliable ways to monitor what’s happening on the ground.”

“What we have not yet done is to break the false narrative that a low-carbon economy equates to a low-value economy,” he continues. “Today, the most heavily forested areas of Mato Grosso still have the lowest living standards. The people in these areas look enviously at the soy producing regions. And they conclude that the forest is bringing them nothing but poverty. To be truly successful, we must nurture a well-functioning bio-economy – one that puts a value on the standing forest while also enabling farmers to get more value from the land that is already in agricultural production.”

He goes on to argue there is ample land available to meet the demand. “The prediction is that, by 2030, another 10 million hectares of soy plantations will be required across Brazil. Yet, right here in Mato Grosso, we have more than 40 million hectares of degraded pastureland which could be rejuvenated.”

One of the most striking aspects of the PCI Strategy is the rigour with which targets are set and progress is monitored. Across the three strands of produce, conserve and include, a total of 21 time-bound objectives have been agreed, indicators have been established, and a web-based dashboard (accessible to all at www.pcimonitor.org) provides an overview of the latest status.

It’s not all good news of course. In a state this large, across areas this remote, one of the toughest challenges is to track and crack down on instances of illegal logging and forest fires. To this end, the PCI Institute used a tranche of its initial funding (secured from the governments of the UK and German governments through an initiative called the REDD+ Early Movers programme or REM), to acquire the Planet Satellite Image Monitoring platform.

Enabling near-real-time monitoring of the entire Mato Grosso region, this generates accurate deforestation alerts, enabling the state government and law enforcement agencies to move quickly to identify hotspots, engage with landowners, seize equipment, limit losses, and prevent the progress of further environmental crimes.

One of the big innovations from Mato Grosso is the way PCI has engaged so successfully with the business world.

From the outset, care was taken to involve many different stakeholders, welcome them into the debate, and include them in the governance of the PCI Institute. As well as ensuring their respective interests are aligned, this multi-sectoral approach bolsters the independence of the programme and enables it to withstand any changes in the state government.

Businesses – including both producers and buyers – are therefore represented on the decision-making bodies, while a Corporate Action Group facilitates deeper engagement, ensures that PCI complements existing supply chain initiatives, and provides a channel for companies to provide feedback. The PCI Institute has also been able to act as a matchmaker between companies who want to clean up their supply chains and sustainable development projects within the region.

“We recognised from the start that many companies want to support the PCI strategy, but aren’t sure how to,” Sampaio explains. “So, we put together a Pitch Book – a menu of plug-and-play sustainable development projects that are actively looking for support and contribute to the wider PCI goals.”

And, by simply leafing through its pages, you soon get a feel for the variety of initiatives being pursued and the emphasis on family farmers and indigenous peoples. Examples include the Xingu Seeds Network (ARSX), a community-based development network to support the creation of markets for seeds from native plants and trees, and the Redes Socioprodutivas, a project which helps smallholders to develop and profit from agroforestry products like Cocoa, Babaçu, and Brazil Nuts.

Of course, realising change of this magnitude requires significant investment. And another strand of the Mato Grosso story is the disciplined way that PCI Institute has prioritised and costed its initiatives and coordinated the dialogue between donors and investors.

Through to 2030, a total cost of around US$43 billion is envisaged, of which around US$11 billion is covered by existing commitments – leaving a shortfall of US$32 billion.

The PCI institute is therefore advocating a range of investment models and mechanisms, including green bonds, endowment funds, private equity funds and venture capital funds. In addition, it is confident that funds will finally begin to flow through the voluntary carbon markets, based on so-called Jurisdictional REDD+ credits (a policy framework set up under the UN Framework Convention on Climate Change which is now able to provide payments to regions such as Mat Grosso for protecting their forests). “Jurisdictional REDD+ credits could be a game changer, especially for family farmers and indigenous peoples,” says Sampaio. “As well as having strong social safeguards, the scheme is a way of putting a tangible value on standing trees, and channelling funds directly to the people who need it the most.”

Mato Grosso enjoys a high profile within forest conservation circles. It is probably the best known example of a jurisdictional approach to sustainable development, the principles developed in the state have been discussed and deliberated over at many conferences and events, and the PCI executives are in high demand as speakers.

That is not to say that everything about the programme is perfect, nor that it enjoys a consistent record of success. But it does represent a beacon of hope and demonstrates that, with adequate funding, production and preservation can indeed be reconciled - not just in a single project, but across a vast sub-national territory.