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Analysis

Conservation Strategy Fund helps local conservationists use economic tools to find smart, efficient solutions to the most urgent environmental problems. Since its creation in 1998, CSF has conducted dozens of analysis projects in forests, rivers and coastal environments. Most of our work has focused in the tropics, where extraordinarily high levels of biological diversity are found. To maximize the reach and quality of our work, we involve leading experts and conservation organizations in all of our projects.

Risks and opportunities of environmental reserve quotas: How to ensure protection of priority conservation areas?

Conservation Strategy Fund (CSF) has been analyzing the risks and benefits of the Environmental Reserve Quota (ERQ) markets in the state of Bahia, in the northeastern region of Brazil. The goal of this work is to support the government in the design of state law to ensure that CRA markets protect priority conservation areas.

In Brazil, rural properties have an important role in conservation of biodiversity and natural resources; rural landowners must keep at least 20% of their total area covered with native vegetation. These areas are called Legal Reserves (LRs). The LRs are intended to maintain ecosystem services and ensure the balance of ecological processes. Currently, it is estimated that the state of Bahia should have one million hectares protected as Legal Reserves, but in fact that land is being used for other purposes (eg. agriculture, livestock, etc.). Environmental Reserve Quota markets have the potential to create incentives for rural landowners to create LRs and bring their land use into compliance with the law.

From the analysis of different instrument implementation scenarios, we conclude that a scenario in which ERQ markets are restricted only to areas defined as conservation priority areas would be most cost-effective. In other words, this market restriction would achieve greater environmental benefits at lower costs.

With this study, we aim to support the state of Bahia the design of ERQ market regulation to achieve greater environmental results. This study has financial support from Good Energies.