What is the New Economy for the Brazilian Amazon?

The New Economy for the Brazilian Amazon (NEA) is a trailblazing study developed over two years by WRI Brasil in partnership with research institutions from across the country. It shows that ending deforestation and maintaining the standing forest will not curb development in the Brazilian Amazon. Quite the opposite: It is an opportunity — to create new jobs and grow GDP, to protect nature and improve locals’ lives and to keep the world’s climate goals within reach.

With the forest’s ecosystem on the brink of collapse, this new approach to the Brazilian Amazon cannot wait. The New Economy report offers a roadmap for a low-carbon, deforestation-free future which positions the Amazon region as a catalyst for decarbonizing the entire Brazilian economy.

 

 

 

Projected Impacts of the New Economy for the Brazilian Amazon by 2050

 

For people

312,000 additional jobs within the Brazilian Amazon region in 2050.

833,000 new jobs in the bioeconomy and restoration sectors, replacing activities linked to deforestation.

Reduced inequality, with more sustainable job opportunities for Black and Indigenous people in the region.

 

For the economy

Increase of at least BRL 40 billion ($8.2 billion) in the Brazilian Amazon’s annual GDP from 2050 onwards.

Expansion of the bioeconomy, with GDP rising by at least 67% to BRL 38.5 billion ($8 billion) in 2050.

GDP growth in all major sectors, including agriculture, livestock production and mining in addition to the bioeconomy.

 

For the environment

Zero deforestation and restoration of 24 million hectares of forest, an area roughly the size of Italy.

94% reduction in net carbon emissions and a 19% increase in the forest’s carbon storage capacity.

Lower susceptibility to water stress and reduced soil fertility loss, leading to higher land productivity.

Results of the New Economy for the Brazilian Amazon (NEA) model in 2050 compared to the study’s Reference Scenario (RS). The NEA model assumes zero deforestation and investment in sustainable agriculture, clean energy and other low-carbon economic practices. The RS assumes no restrictions on deforestation or investment in energy transition technologies, following trends of the last 10 years.

 

About the Study

 

Expertise

The New Economy for the Brazilian Amazon incorporates diverse expertise from across country. The report convenes 76 specialists from various backgrounds, including scientific institutions and individual researchers from different schools of economic thought; social and natural scientists; experts in engineering, energy and information sciences; and indigenous anthropologists.

Methodology

Using an unprecedented approach, the study blends multiple economic forecasting models developed by research groups throughout the country. It analyzes four scenarios through 2050, ranging from “business-as-usual,” with no restrictions on emissions or deforestation, to a fully decarbonized model with zero deforestation, emissions reductions in line with global climate goals and investments in low-carbon technologies. The result: a viable roadmap to a sustainable Amazon, backed by solid and innovative scientific analysis.

Leadership

The New Economy for the Brazilian Amazon is led by WRI Brasil and the New Climate Economy in partnership with the following universities and organizations: Federal University of Pará (UFPA), University of São Paulo (USP), Federal University of Rio de Janeiro (UFRJ), Federal University of Minas Gerais (UFMG), Institute for Environmental Research in the Amazon (IPAM), Instituto de Conservação e Desenvolvimento Sustentável do Amazonas (IDESAM), Center for Climate Crime Analysis (CCCA), Concertation for the Amazon, Instituto Contas Abertas.

 

 

The Legal Amazon

The New Economy for the Brazilian Amazon adopts the Legal Amazon as its study area. This encompasses 60% of the Amazon rainforest, including the entire Amazon biome in Brazil and adjacent parts of the Cerrado biome, which expands over nine states in the country. The Legal or “Brazilian” Amazon is home to 28 million people. It holds the most extensive and biodiverse forest and the largest freshwater reservoir in the world. And it is the most important forest block for climate regulation on the planet.

 

 

 

 

The Brazilian Amazon’s Economy Today

The Brazilian Amazon’s current development path is unsustainable. Its economy was built around resource-intensive agriculture, livestock production and mining practices which drive deforestation and greenhouse gas emissions. This extraction-based model has pushed the Amazon toward the brink of ecosystem collapse and put the world at risk of surpassing the Paris Agreement’s 1.5 degrees C (2.7 degrees F) target for global temperature rise.

But it’s not just about nature or the climate. The current system is not delivering for the region’s people, either, and it remains the poorest in the country. In other words, resources flowing out of the Brazilian Amazon are not matched by benefits flowing back in.

The Brazilian Amazon imports more than it exports, creating a trade deficit of BRL 114 billion ($23.4 billion) with the rest of Brazil and abroad.


Exports are the primary cause of resource extraction: More than 83% of the region’s deforestation is driven by product demand from other areas of Brazil and foreign trade.


 

 

 

 

According to the study, if the Amazon’s current economic model continues, carbon emissions will be 5 times higher in 2050 than the targets established under the Paris Agreement, and another 59 million hectares of forest will be destroyed — an area equal to the size of France.

This would push the Amazon past its tipping point, transforming the forest to a savannah, fueling extreme heat in the region and threatening critical ecosystem services, such as rainfall irrigation, for millions in Latin America. It would also make limiting global warming to 1.5 degrees C (2.7 degrees F) impossible.

 

 

 

 

Building a New Economy for the Brazilian Amazon

Shifting the Brazilian Amazon to a deforestation-free, low-carbon economy while growing its GDP and improving local lives is an unprecedented challenge, but one the region is equipped to meet head-on. New methods already exist which can increase production in farming, livestock and mining without clearing any additional land. And the local bioeconomy can be expanded to produce goods more sustainably and create thousands of additional jobs; the sector’s vast potential has only begun to be tapped.

 

 

 

 

What Does a Deforestation-free Economy in the Amazon Look Like?

The bioeconomy

Expanding the Amazon’s bioeconomy is an opportunity to bring new jobs and revenue streams to the region while keeping trees standing, rivers flowing and the forest’s ecosystem intact. The local bioeconomy is already thriving, with local and Indigenous groups driving innovative production processes based on biodiverse products and forest restoration. Today the bioeconomy sector generates BRL 12 billion ($2.5 billion) in GDP, according to the study. With additional investments, it could reach an annual GDP of at least BRL 38.5 billion ($8 billion) by 2050 and create 833,000 new jobs, replacing occupations currently linked to deforestation.

Agriculture and livestock production

Transforming agriculture and livestock production will be key to protecting the Amazon’s standing forest and decarbonizing its economy. Brazil must invest in mainstreaming low-carbon practices, such as no-till agriculture and crop rotation, which can maintain soil fertility, limit erosion and help prevent water stress due to runoff. This can boost the productivity of existing working lands, increase farmers’ incomes and reduce rural inequality while removing the need to clear forests for new farmland. In the new model, GDP from agriculture and livestock would continue to grow through 2050 with no additional deforestation.

Mining

The Brazilian Amazon contains significant quantities of minerals used in clean energy technology and infrastructure. Mining for these minerals is essential to the global energy transition and an important part of the region’s economy: The sector already generates about BRL 39 billion ($8 billion) and employs 113,000 people. However, mining comes with inherent risks ranging from deforestation to environmental pollution, dangerous waste-management failures, and the potential for increased crime and gender-based violence. To minimize these risks as mining in the Amazon expands, the industry must go beyond standard ESG principles to safeguard local populations and the natural resources essential to their ways of life.

Energy and infrastructure

Shifting to cleaner energy and transportation will help enable decarbonization of the rest of the economy. In the new model, solar power can meet 55% of the region’s energy needs by 2050. Innovative solutions, such as floating solar panels above hydroelectric dams or installing them on degraded pastures, can increase renewable energy capacity without clearing additional land. In the transportation sector, waste materials from agriculture and the growing bioeconomy can be used as a fuel source, replacing 359 million litres of diesel and reducing regional GHG emissions by about 1.5 million tons by 2050. Hybrid water transport, which uses both fossil and electric power, can also be expanded on the Amazon’s vast river network to absorb 20% of current road cargo transport and reduce the need to build new roads through the forest.

 

 

How Can Brazil Finance the Transition?

 

The additional cost to transition the Brazilian Amazon to a green, deforestation-free economy compared to the reference scenario is estimated at BRL 2.56 trillion ($533 billion) by 2050, or 1.8% of the country's GDP per year. By comparison, the cost to maintain business as usual is around 1% per year. Increased investments would go toward upgrading the region’s infrastructure (58%), improving land use practices (26%) and decarbonizing the energy matrix (16%). Investments would not be restricted to the Legal Amazon given the intricate financial, informational and material flows between the region and the rest of Brazil. In this model, the Amazon would serve as an incubator and a catalyst, driving decarbonization of the entire Brazilian economy.

The public sector can help finance this transition through tax exemptions for low-carbon activities and by redirecting existing funds toward sustainable alternatives; for example, replacing fossil fuel subsidies with incentives for renewable energy. The Brazilian government must also create an enabling financial framework that channels funding into climate-friendly projects and programs. This includes creating legal guidelines for the carbon market in Brazil to leverage the monetary value of the forest’s carbon storage capacity. The private sector must also increase finance and innovation for sustainable development; for instance, helping to expand the region’s existing bioeconomy with an eye to social and economic equity and preserving traditional practices.

In this new economy, the Brazilian Amazon’s total GDP is projected to increase by at least BRL 40 billion ($8.2 billion) per year by 2050 above the reference scenario. But the true net gain could be far larger still. The study does not account for the cost of doing nothing, which, conservatively, could be twice as high as the amount needed to build the new economy, given the rising financial toll of more frequent and severe climate impacts. Nor does the study capture the true potential of the bioeconomy. It analyzes only 13 products for which data is reliably available, while Indigenous groups currently use up to 270 native products in daily cooking alone. The full scope of the bioeconomy is therefore likely much larger than estimated and has yet to be fully understood.

Based on the New Economy of the Amazon report. Download the Full Report (Portuguese) or Executive Summary (English) to see the full list of authors.

Coordination: Bruno Felin and Joana Oliveira
English version coordination: Maggie Overholt
Web and video concept: Campo
Visual identity of the project: Nektar Design
Web development: Wil Thomas
Photos: Idesam, Bruno Kelly/WRI Brasil, Ricardo Oliveira, Paralaxis/Shutterstock, Valdemir Cunha/Greenpeace, Diego Bravelli/Greenpeace, Rodrigo Duarte/Idesam, Lunae Parracho/Greenpeace.

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