The return of the Amazon Fund and Lula’s race to cut deforestation

On the first day of his third term as Brazil’s president, Luiz Inácio Lula da Silva signed a decree reactivating the Amazon Fund. Reviving the project — which was inexplicably suspended during the government of far-right former President Jair Bolsonaro — was one of Lula’s campaign promises, going in line with his pledge to reach zero deforestation by 2030.

The fund currently has a balance of BRL 3.3 billion (USD 630 million), to be spent on “efforts to prevent, monitor, and combat deforestation, as well as to promote the preservation and sustainable use of the Brazilian Amazon,” as is stated on the project’s official website.

The fund is mainly sponsored by Norway and Germany and managed by Brazil’s National Development Bank (BNDES), which is responsible for raising and investing funds, monitoring the sponsored projects, and providing accountability.

Speaking at the World Economic Forum in Davos, Environment Minister Marina Silva singled out the Amazon Fund as “the priority” for the government in its search for financial resources to fund protection measures.

There’s a hole in my budget

Over the last five years, even with the Amazon Fund suspended, it financed part of the oversight activities of Brazil’s environmental protection agency Ibama. A contract signed in 2018, before Mr. Bolsonaro took office, foresaw a total of BRL 140 million to be transferred to the government agency, largely used to lease special vehicles used in oversight operations, such as helicopters. The project was not renewed during Mr. Bolsonaro’s time in office.

Indeed, of the BRL 219.4 million budget that the Bolsonaro government had available to spend on oversight operations between 2019 and 2021, it had used just over 40 percent, according to data from climate watchdog Observatório do Clima.

With the new government in charge, there has been some clamor to make use of this unfrozen...