Contacts: In Brasilia – Mauro Azeredo (+55-61) 3329-1059 mazeredo@worldbank.org In Washington – Gabriela Aguilar (+1 202) 473-6768 gaguilar2@worldbank.org WASHINGTON, March 5, 2009 – The World Bank Board of Directors approved today a US$1.3 billion loan to Brazil for the First Programmatic Development Policy Loan for Sustainable Environmental Management, supporting Brazil’s ongoing efforts to improve its environmental management system and integrate sustainability concerns in the development agenda of key sectors such as forest management, water and renewable energy. The initiative will also integrate Brazil’s climate change agenda across sectors. “The Brazilian government has been working strongly towards the development and implementation of public policies that address sustainable development so that economic growth occurs without loss to our rich biodiversity,” said Guido Mantega, Minister of Finance. “This requires a commitment from all levels of government, whether federal, state or municipal, paying special attention to social programs, many of which include programs for sustainable growth,” he added. “In this context, the set of institutional reforms and policies laid down in the Multiyear Plan (PPA) and the Growth Acceleration Plan (PAC) is essential to ensure that Brazil achieve economic growth, preserve the environment and become a socially just nation.” In few countries is the ecosystem as crucial to development and people's welfare as in Brazil. The country has one-third of the world’s tropical rain forests, the largest reservoir of fresh water (20 percent), one of the longest coastlines (more than 8,500 km), and savanna with the greatest biodiversity in the world. A significant part of Brazil’s economy relies on the use of natural resources for production inputs. Due to the importance of its natural resource base, Brazil faces major challenges to strengthen the sustainable use of its natural resources. Key environmental issues in Brazil to be addressed by the program include: - Deforestation from unsustainable use of natural resources in the Amazon rainforest;
- Conservation of the remaining Atlantic Forest, water quality and availability; and
- Increased energy demand, straining Brazil’s clean energy matrix.
“The social and economic cost of environmental destruction is high. Smooth coordination of policies and procedures within the Brazilian environmental management system, combined with an increased commitment from the financial sector to long-term sustainability, is key to guaranteeing that specific actions and investments in the area can achieve the best possible results, ensuring growth that is environmentally sustainable and socially inclusive,” said Makhtar Diop, World Bank Country Director for Brazil. The program supports Brazil’s commitment to better environmental and poverty outcomes while implementing a model of accelerated competitiveness and growth. This will be done by emphasizing incentives, such as efforts to increase the value of standing forests, and economic instruments, such as increasing the environmental profile of development finance facilities as integral parts of the Government’s environmental management strategy. This will promote the sustainable management of agricultural lands, forests and water resources; reduce deforestation in the Amazon; reduce the environmental degradation of land, water and other resources which are key determinants of the well-being of the poor; and promote renewable energy. Amazon Deforestation: Policies Matter The Amazon Forest has lost 19,000 km2 per year over the past 30 years. This is due to a combination of economic forces, poor agricultural practices, weak property rights, and poor enforcement of regulations. Deforestation affects the climate, soil erosion, and biodiversity. Seventy percent of Brazil’s CO2 emissions come from deforestation and change of land use. Improved policies, when backed by enforcement and economic incentives, are an effective way to control the complex social and economic forces behind deforestation. For example, requiring banks to follow environmental law and integrating environmental and social considerations into investment plans provides a potent incentive for compliance. |
The policies and reforms supported by this operation are expected to have very positive social impacts. Specifically, the Public Forest Management law and other reforms supported by this operation give local communities preferential treatment regarding forest concessions, and should reduce unsustainable agricultural and logging practices and land grabbing. The program’s support for the National Water Quality Evaluation Program is expected to significantly increase water resources for the poor, as they are disproportionately affected by water pollution. Other reforms will increase access to water and sanitation services and boost the social and sustainable investment policies of BNDES, Brazil’s national development bank. “The new program builds on the good work previously achieved by Brazil, which also includes financial and analytical support from the Bank and other partners. This was a complex multi-partner effort in the Government and all involved Ministries must be congratulated for it,” said Mark Lundell, World Bank Project Manager. “The program will also be a fundamental complement to the work being done under the Bank’s new Amazon Framework, which seeks to support Brazil’s efforts to reconcile development and conservation in the Amazon.” This Programmatic Sustainable Environmental Management Development Policy Loan (SEM DPL) is the first operation in a series of two loans which span the period 2008-2010. This first loan would be disbursed in two tranches: the first upon effectiveness in a total amount of US$800 million, and the second, totaling US$500 million, upon fulfillment of the projects goals, stipulated by the Government of Brazil. The second loan is expected to be negotiated in the fourth quarter of 2009. The program includes a web-based monitoring system, open to the public, ensuring transparency and enabling social participation. - |
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