Brazil

With one of the largest biological diversities in the world, Brazil has advanced in the creation of innovative financial mechanisms such as biodiversity funds and has positioned the issue of a sustainable bioeconomy from a holistic perspective in high-profile spaces such as the G20.  In partnership with BNDES, Brazil's largest development bank, BIOFIN has previously helped identify and prioritize funding resources, mobilizing US$$15 million to support the bioeconomy.

The 2023 government transition in Brazil has renewed attention on biodiversity mainstreaming and climate change.  The new administration is restructuring governance and financial instruments, such as the Amazon Fund, to achieve the objectives outlined in the Convention on Biological Diversity (CBD) and the United Nations Framework Convention on Climate Change (UNFCCC).

A central part of this effort is a new development plan that aims to include an environmental and climate agenda as a cross-cutting theme within all ministries. As part of the Growth Acceleration Programme (new PAC), the government announced the Ecological Transformation Plan (ETP), an ambitious green pact package to pursue sustainable development and boost Brazil's economic growth. Together with the PAC, the ETP seeks to boost sustainable development, foster economic growth, and reshape economic, technological, and cultural paradigms. Backed by a pact between the Executive, Legislative, and Judicial branches, it will drive new environmental, financial, and productive policies to close critical gaps, ensuring wealth generation and fair distribution for present and future generations.

The Green Transformation Plan serves at the highest level to integrate biodiversity and climate considerations into all economic sectors. In a process led by the Ministry of Finance, UNDP Brazil has been encouraged to align its activities with the ETP and the National Biodiversity Strategy and Action Plans (NBSAP). BIOFIN directly supports the Ministry of Finance in defining the financing structure and bioeconomy financing mechanisms for the implementation of the National Bioeconomy Strategy. This includes the development of a robust financing structure and financial architecture for the Federal Payments for Environmental Services Programme. These initiatives provide direct support to essential short- and medium-term actions for the bioeconomy and agri-food systems, a pillar of the Green Transformation Plan.

In addition, BIOFIN has supported the Brazilian Forest Service in developing a financing mechanism for community forest enterprises, linked to the Federal Programme for Community and Family Forest Management. This underlines the government's renewed focus on sustainable forest management and restoration policies that promote the use of native vegetation, especially for timber products.

The process of updating the National Biodiversity Strategies and Action Plans is underway, and BIOFIN has been asked to align its efforts with both strategic policy instruments (the OTP and the National Biodiversity Strategies and Action Plans) to develop a comprehensive Biodiversity Financing Plan.

Despite progress, reversing deforestation trends is critical, but conflicting incentives that threaten biodiversity persist. In addition, funding for new instruments, such as the national PES scheme, is being maintained, and BIOFIN will continue to evaluate possible sources of funding to ensure its successful implementation.