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Can market instruments contribute to achieve environmental objectives at lower costs? Implementing scenarios for the Environmental Reserve Quota (ERQ) in the state of Bahia

Series number: 
49

The 2012 Brazilian environmental legislation requires that each rural property must protect a minimum percentage of native vegetation as a “Legal Reserve” (LR), corresponding to 20% of the property’s total area. However, most properties have not protected the amount required by law. Through an economic instrument - called the Environmental Reserve Quota (ERQ) - landowners with LR deficits will be able to meet their legal obligations. CSF analyzed different ERQ implementation scenarios in the state of Bahia, northeastern Brazil.