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Research Report

Environmental reserve quotas in Brazilʹs new forest legislation: An ex ante appraisal

Peter H May
Paula Bernasconi
Sven Wunder
Ruben Lubowski
Copyright Date: Jan. 1, 2015
Pages: 49
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Table of Contents

  1. (pp. 1-5)

    Legal requirements governing land use in Brazil date from the 1930s, while the FC was first enacted in 1965 (Law No. 4,771/65). The FC was enacted as a means to protect forest reserves in settled areas so as to ensure supplies of timber and fuelwood to satisfy local needs. In later formulations, the law acquired an environmental protection connotation, providing a way of ensuring the federal Constitution’s demand that land serve a social function (CF Art. No. 186). The FC mandated that each property reserve a proportion of its total forest area, with the required share differentiated according to the...

  2. (pp. 6-12)

    The CRA is usually associated with international experiences with tradable development rights (TDR), (also sometimes known as “transfer of development rights”). TDRs emerged as a means to preserve historical landmarks and prime agricultural land in cities and suburbs of the United States, beginning with New York City’s creation of the notion of tradable “air rights” in its 1911 zoning ordinance. In this instrument, property owners who wished to increase the height of buildings were allowed to purchase development rights from historic landmarks, churches and other properties, compensating owners of these properties for use restrictions that avoided their conversion to skyscrapers....

  3. (pp. 13-20)

    Policy simulations in Brazil have focused on the implementation of the CRA between properties with forest in excess of the biomespecific legal requirement, and those with a deficit, in order to achieve overall compliance and potential co-benefits such as those derived from forest contiguity and conservation of critically endangered species at a bioregional or landscape scale.

    Instead of reviewing actual experience with TDR instruments in Brazil, which remains embryonic and undocumented, we here summarize the principal preexisting empirical simulations of tradable LR quotas carried out at a national or subnational level. We selected nine studies, giving preference to those that...

  4. (pp. 21-28)

    An economic instrument assures greater environmental effectiveness if it ensures greater protection and/or restoration of natural resources than other options. In the case of CRA, an appropriate environmental objective would be to ensure that protected forest cover is greater than would have been the case without CRA – particularly in areas with high biodiversity and importance for provision of ecosystem services. To the extent that use of CRA is a compliance alternative for obligations to restore forests, the reduction in restoration obligations would need to be compared against the gain in forest protection along with the savings in compliance costs...

  5. (pp. 29-32)

    Based on our review of experience with TDR instruments in the United States, it is clear that the strength of such environmental markets is dependent on the scope of tradable land rights and the existence of sufficient demand for land-use quotas. If the local market for trades is soft, or confined to an overly restricted area, prices may need to be stimulated through banking or complementary purchases of development rights. Overall, the most important factor is the existence of enforceable zoning codes in both sending and receiving areas that make trade necessary to achieve landowners’ development objectives. It may be...