Document of
The World Bank
Report No:
PROJECT BRIEF
ON A
PROPOSED GRANT FROM THE
GLOBAL ENVIRONMENT FACILITY TRUST FUND
IN THE AMOUNT OF usD 30 MILLION
TO THE
Federative Republic of Brazil
and
The Fundo Brasileiro para a Biodiversidade (FUNBIO)
FOR A
National BIODIVERSITY mAINSTREAMING AND iNSTITUTIONAL CONSOLIDATION pROJECT
August 31, 2005
CURRENCY EQUIVALENTS
(as of August 31, 2005)
Currency Unit / = / RealBRL 2.31 / = / US$1
FISCAL YEAR
January 1 / – / December 31Vice President: / Pamela Cox
Country Director: / John Briscoe
Sector Director: / John Redwood
Sector Manager: / Abel Mejia
Task Team Leader: / Adriana Moreira
ACRONYMS AND ABBREVIATIONS
ABC / Brazilian Cooperation AgencyABS / Access and Benefit Sharing
ANA / National Water Agency
ANP / National Petroleum Agency
ARPA / Amazon Region Protected Areas Program
BRA/97/G31 / National Strategy on Biological Diversity Project
CBD / Convention on Biological Diversity
CGEN / National Genetic Resources Council
CHM / Clearing House Mechanism
CIRM / Interministerial Commission for Marine Resources
CNPq / National Research Council
COBRAMAB / Man and the Biosphere Programme
CONABIO / National Commission on Biodiversity
CONAFLOR / Coordinating Commission of the National Forests Programme
CONAMA / National Council on Environment
COP / Conference of the Parties of the Convention on Biological Diversity
CTNBIO / National Technical Commission for Biosafety
EPBRS / European Biodiversity Research Strategy Platform
EMBRAPA / Brazilian Agricultural Research Corporation
ExAs / Executing Agencies
FAO / United Nations Food and Agricultural Organization
FGV / Getulio Vargas Foundation
FNMA / National Fund for the Environment
FINEP / Research and Projects Financing Agency
Fiocruz / Oswaldo Cruz Fundation
FUNBIO / Brazilian Biodiversity Fund
FUNATURA / Fundação Pró Natureza
GEF / Global Environment Facility
GBIF / Global Biodiversity Information Facility
GBO / Global Biodiversity Outlook
GIS / Group of Scientific Interest
GMOs / Genetically Modified Organisms
GOB / Government of Brazil
IAs / Implementing Agencies
IBAMA / Brazilian Institute for Environment and Renewable Natural Resources
IBRD / International Bank for Reconstruction and Development
IFB / French Biodiversity Institute
IMO / International Maritime Organization
ISPN / Instituto Sociedade População e Natureza
JBRJ / Botanical Garden of Rio de Janeiro
MA / Millennium Ecosystem Assessment
MAPA / Ministry of Agriculture
MCT / Ministry of Science & Technology
MDA / Ministry of Agrarian Development
MDGs / Millennium Development Goals
MMA / Ministry of the Environment
NBSAP / National Biodiversity Strategy and Action Plan
MS / Ministry of Health
NGOs / Non Governmental Organizations
OAS / Organization of the American States
PICUS / Integrated Conservation and Sustainable Use Projects
PLEC / People, Land Management, and Environmental Change
PNF / National Forests Programme
PPA / Multi-year Government Plan
PPBio / National Program on Biodiversity Research
PPP / Small Grant Program for Cerrado
PPG7 / Pilot Programme for the Protection of Tropical Forests in Brazil
PROBEM / Brazilian Program of Molecular Ecology [Bioprospecting] for the Sustainable Use of Biodiversity in the Amazon
PROBIO / National Biodiversity Project
PRONABIO / National Biodiversity Program
RBJB / Brazilian Botanical Gardens Network
SBF / Secretariat for Biodiversity and Forests, MMA
SBSTTA / Subsidiary Body on Scientific, Technical and Technological Advice of the Convention on Biological Diversity
SEAIN / Secretary of International Affairs – Ministry of Planning
SQA / Secretariat for Environmental Quality in Human Settlements, MMA
UNDP / United Nations Development Programme
UNEP / United Nations Environment Programme
UNESCO / United Nations Education, Science and Culture Organization
UNOPS / United Nations Office for Project Services
Contents
Page
A. STRATEGIC CONTEXT AND RATIONALE 7
1. Country and sector issues 7
2. Rationale for Bank involvement 11
3. Higher level objectives to which the project contributes 12
B. PROJECT DESCRIPTION 13
1. Lending instrument 13
2. Project development objective and key indicators 13
3. Project components 13
4. Lessons learned and reflected in the project design 17
5. Alternatives considered and reasons for rejection 18
C. IMPLEMENTATION 18
1. Partnership arrangements (if applicable) 18
2. Institutional and implementation arrangements 19
3. Monitoring and evaluation of outcomes/results 20
4. Sustainability and Replicability 20
5. Critical risks and possible controversial aspects 22
6. Loan/credit conditions and covenants 22
D. APPRAISAL SUMMARY 22
1. Economic and financial analyses 22
2. Technical 23
3. Fiduciary 23
4. Social 23
5. Environment 25
6. Safeguard policies 25
7. Policy Exceptions and Readiness 25
Annex 1: Country and Sector or Program Background 26
Annex 2: Major Related Projects Financed by the Bank and/or other Agencies 37
Annex 3: Results Framework and Monitoring 44
Annex 4: Detailed Project Description 52
Annex 5: Project Costs 59
Annex 6: Implementation Arrangements 61
Annex 7: Financial Management and Disbursement Arrangements 65
Annex 8: Procurement Arrangements 69
Annex 9: Economic and Financial Analysis 72
Annex 10: Safeguard Policy Issues 73
Annex 11: Project Preparation and Supervision 75
Annex 12: Documents in the Project File 77
Annex 13: Statement of Loans and Credits 79
Annex 14: Country at a Glance 84
Annex 15: Incremental Cost Analysis 86
Annex 16: STAP Roster Review 94
Annex 17: Consensus Building Strategy 100
Annex 18: Selection Criteria for Subprojects 104
Annex 19: The Opportunities Fund 108
Annex 20: Regional Productive Landscapes for Biodiversity Mainstreaming 117
Annex 21: Brazilian Virtual Institute for Biodiversity 117
Annex 22: 2010 Convention on Biological Diversity Targets and their Relevance for Brazil 117
Annex 23: Maps 125
· STRATEGIC CONTEXT AND RATIONALE
1. Country and sector issues
Brazil, with the largest tropical forest in the world (the Amazon rainforest), a large geographical size, and high climatic diversity, is considered a megadiverse country. Perhaps 15% to 20% of the 1.5 million species recognized in the world – one in five known species – are found within its national borders. Brazil has the most diversity of flora, with 55,000 superior plants species (approximately 20% of the total world), 524 mammals, 1,677 birds, 517 amphibians and 2,657 fish. This megadiverse country faces huge challenges to control deforestation, fires, pollution, invasive alien species, and unsustainable production and consumption. Yet it also possesses a notable portfolio of rich and diverse pilot experiences with which to face the challenges of biodiversity conservation, sustainable use and benefit sharing.
Global Environmental Issues
Protecting Brazil’s biodiversity and avoiding its loss has enormous global benefits. As was noted above, Brazil holds approximately one-fifth of all the known species in the world, and most of the vast number of unknown species (perhaps 10 times the number of known species, most of which live in the tropics, and especially the New World tropics). A significant number of the species occurring in Brazil are endemic.[1] With more than 90% of the Atlantic Forest biome, half of the Cerrado and Caatinga biomes, and more than 15% of the Amazon Forest biome already deforested, large numbers of biodiversity components in Brazil are in danger of becoming extinct in the near future. Currently more than 600 animal species are officially recognized as threatened with extinction by the Brazilian federal government.[2]
The biological richness of Brazil is under different categories of threats and pressures. Habitat alteration and loss, over-harvesting, species and disease introduction and pollution are the proncipal causes of biodiversity loss. Root causes of biodiversity loss usually fall within the following categories: demographic change, inequality and poverty, macroeconomic policies and infrastructure construction, social changes developmental biases. In terms of activities, agricultural expansion, including plantation forestry and grazing, is the most important factor that threatens biodiversity, followed by invasion of exotic species, burning, road construction and mining. A set of secondary, local factors includes hunting, over-exploitation of timber and fuel wood, non-sustainable use, illegal trading of plants and animals, chemical pollution, oil exploration, hydroelectric projects, and tourism. The main impact is clear-cut deforestation, followed by other kinds of impacts such as erosion, flooding, soil and water pollution, landscape fragmentation; toxic runoff and water contamination, changes in ecosystem structure, air pollution and biotic invasions, differing between different economic sectors. Annex 1 presents a detailed analysis of threats to biodiversity by sector, specie type, and ecosystem.
The prevention of a potentially large loss of biodiversity in Brazil represents a significant global benefit. Also relevant is the prevention of the loss of ecosystem services associated with Brazilian ecosystems, such as water balance (air moisture, rainfall, river flow), heat balance (atmospheric and oceanic circulation), carbon balance (global warming), nutrient balance (biogeochemical cycles, gases and aerosols from burnings) and sediment balance (erosion and siltation downriver and in coastal zones).
The conservation of Brazilian biodiversity will require significant efforts from both the public and private sectors. Present day production paradigms are responsible for gas emissions, production effluents, massive use of non-renewable natural resources, etc. that are in the basis of present-day global environment problems. The concern with environmental issues has intensified dramatically over the last few decades. Although Brazil has taken an active role in the world debate and has made positive steps towards the sustainable management of its natural resources, the weakness of governmental and institutional support implies that trends of declining biological diversity will continue over the next decades. Efforts made to alter production paradigms in Brazil, if successful, will have positive impact in global environmental systems: water, climate, and biodiversity in particular. Similarly, the strengthening and consolidation of public-sector institutions capable of contributing to, and implementing, policies related to biodiversity will have ramifications far outside Brazil’s borders. A project of this scale in Brazil is truly a project with global impacts.
Brazilian Biodiversity Sector
The responsibility for managing biodiversity in Brazil is extensive, with numerous ministries, institutes, secretariats, and departments holding responsibility for environment and biodiversity issues within the government. Hundreds of NGOs, foundations, and institutes, both national and international, are implementing thousands of projects. Dozens of universities, as well as consulting firms and other private sector institutions, are also involved in biodiversity conservation. Many of these projects and programs are supported by binational and multinational donors. Often, these initiatives have met with of success. However, most efforts at mainstreaming biodiversity conservation have remained sporadic, uncoordinated, and isolated. Success stories and lessons learned are at best not shared, and at worst lost. New initiatives do not benefit from knowledge generated through past activities, and possible synergies between projects and programs are foregone.
There have also been few efforts to mainstream biodiversity concerns. Typically, efforts to address conservation policies and practices have not been well integrated across economic sectors, among various public agencies, and between public and private sectors. Despite the enormous impact other sectors have on biodiversity, and the important role biodiversity can play in other sectors (see Annex 1 for analysis), conservation initiatives are almost exclusively the domain of biodiversity and environmental actors. Recently, a few projects have experienced initial successes in extending biodiversity conservation into other public and private sectors in Brazil. However, the impact has been limited to date, and government funding for this mainstreaming, especially from ministries other than the Ministry of the Environment, is limited or nonexistent.
The current scale of biodiversity-related activities in Brazil is also sub-optimal. Sustainable use and conservation programs and projects have primarily concentrated on local, community-based economic activities. Though these small-scale activities may be successful in a limited area, they lack sufficient scale to make a significant contribution to haltering biodiversity loss in a country as large, and with as extensive biodiversity, as Brazil. Large scale activities work not only to combat growing threats but serve as well to mobilize public opinion to the possibilities and advantages of adopting sustainable production processes, and raise society’s awareness, interest and commitment to this alternative to the point of altering societal market choices in favor of biodiversity-mainstreamed products and services.
The reasons for the lack of success in mainstreaming biodiversity concerns into policy and development in Brazil are complex and difficult to summarize. A more detailed description is provided in Annex 1. Among the most important factors are:
· Lack of information relevant to policymakers
· Insufficient analysis of threats and problems
· Failure of decisionmakers to ask the right questions
· Geographical and spatial differences of scale.
· Exclusion of lower-level decision makers from policy.
· Differences between different forms of economic development.
· Lack of recognition of the role and impact of the private sector in the process of land use change and occupation
· Lack of coordination of financial mechanisms and economic instruments to finance conservation.
· Lack of public awareness and support for biodiversity conservation.
· No public sector responsibility to value biodiversity.
This project has been designed to test and implement solutions designed to remedy these bottlenecks, including through the promotion of policy change, and to design additional solutions to address further problems identified during in-depth analysis done during the early phase of implementation.
Country Eligibility
Since the ratification of its commitment to the Convention on Biological Diversity in 1994 (Legislative Decree 2, of February 3rd, 1994; and Decree 2519, of March 16, 1998), the Brazilian Federal Government has taken, with the support of the Global Environment Facility (GEF) and other international support, decisive measures to implement the three objectives of the CBD. These include enhancement of the legal framework, institutional capacity building of the Ministry of the Environment, establishment of national policies, programs and major projects (see the “First National Report to the Convention on Biological Diversity – Brazil”, MMA 1998; and the “Second National Report to the Convention on Biological Diversity – Brazil”, MMA 2004).
Country Drivenness
Among the many initiatives taken by the Brazilian Government in the last decade to reduce the loss of biodiversity was the 1995 creation of a set of interconnected instruments aimed creating an effective national biodiversity conservation strategy and sustainable use policy and implementation programs. The first and overarching initiative was the National Biodiversity Program (PRONABIO), conceived as an intergovernmental and multi-institutional program with the responsibility of fixing guidelines for the functioning of the two other novel mechanisms. A second was the GEF Conservation and Sustainable Use of Brazilian Biodiversity Project (PROBIO), with the main objective to assist the Government to initiate a program for the conservation and sustainable use of biodiversity by identifying priority actions, stimulating the development of demonstration subprojects, and disseminating biodiversity information. The third initiative was the establishment of the GEF Brazilian Biodiversity Fund (FUNBIO) to create a long-term sustainable financing mechanism to promote conservation and sustainable use of biodiversity in Brazil, particularly vis-à-vis the private sector. The goals of these mechanisms were designed to be complementary. These projects paved the way for a next generation of initiatives such as Amazon Region Protected Areas Program (ARPA), Rio de Janeiro Integrated Ecosystem Management in Production Landscapes of the North-Northwestern Fluminense, Integrated Management of Aquatic Resources in the Amazon (AquaBio) and Biodiversity Enterprise Fund for Latin America – Terra Capital Fund. The proposed project will draw on the rich lessons learned through these projects, some of which have nearly a decade worth of experience working with Brazilian biodiversity. Other recent projects, including the as well as the First Programmatic Loan for Environmental Sustainability, related Environmental Sustainability Agenda Technical Assistance Loan and municipal-level projects are also breaking new ground in environmental work and mainstreaming. The proposed project will contribute to the implementation of the National Biodiversity Policy and also meets the eligibility criteria for GEF funding according to criteria and guidelines set by the National Commission on Biodiversity (CONABIO). It should be noted that some important sectoral ministries (e.g. agriculture, agrarian reform, and health) have already participated in project preparation, committed to develop project activities, and devoted substantial budget resources as counterpart funding. Other sectors, such as energy, mining and transport, have also been engaged in the ongoing preparation discussions and are expected to join in the project by the early stages of implementation. In this sense, the commitments made by the energy and transport sector in the Bank’s complimentary Programmatic Loan for Environmental Sustainability have been instrumental in opening an avenue for policy dialogue.