{"id":438341,"date":"2022-05-30T15:08:33","date_gmt":"2022-05-30T18:08:33","guid":{"rendered":"https:\/\/revistapesquisa.fapesp.br\/?p=438341"},"modified":"2022-05-30T15:08:33","modified_gmt":"2022-05-30T18:08:33","slug":"rewarding-conservation","status":"publish","type":"post","link":"https:\/\/revistapesquisa.fapesp.br\/en\/rewarding-conservation\/","title":{"rendered":"Rewarding Conservation"},"content":{"rendered":"

A group of researchers at the University of S\u00e3o Paulo (USP) and Duke University recently published a study on the effectiveness of a fiscal transfer system adopted in Brazil that rewards municipalities for hosting protected areas. The system, referred to as ecological tax transfers (ICMS Ecol\u00f3gico<\/em>, or ICMS-E), has been adopted in at least 15 Brazilian states since the early 1990s. Under this system, a larger percentage of state tax (ICMS) revenues is awarded to cities that have expanded the amount of municipal area covered by protected native vegetation and springs.<\/p>\n

The researchers used econometric models to estimate changes in the extent of protected areas in 1,467 municipalities in six states from 1987 to 2016. They compared four states\u2014Minas Gerais, Paran\u00e1, Rio de Janeiro, and S\u00e3o Paulo\u2014that implemented the ICMS-E framework to two control states\u2014Santa Catarina and Esp\u00edrito Santo\u2014that did not. One of the challenges in the study was accurately distinguishing the impact from the tax framework from that of the multiple other initiatives designed for a similar purpose, such as Brazil\u2019s national plan to incentivize protected areas, and international finance facilities for conservation. The researchers\u2019 models showed a slight correlation between ICMS-E adoption and growth in protected areas, most markedly in states such as Rio de Janeiro, where the framework has been only recently implemented and the impacts are now at their peak.<\/p>\n

The effects of the framework, however, were unevenly felt. Part of the discrepancy is explained by the proliferation of a less restrictive type of protected area, called \u00c1rea de Prote\u00e7\u00e3o Ambiental<\/em> (APA<\/em>)\u2014similar to an IUCN category V reserve. These reserves are easier to create as constraints on land use are less restrictive, although they also offer less protection for threatened habitats. On average, city planners created 24 times more APAs than they did other types of protected areas. But when protected areas were created by state governments, the gap was far less pronounced\u2014the number of APAs was eight times larger. The explanation is simple: for mayors, creating new APAs is a quick and uncomplicated process that will increase their city\u2019s tax transfers within their term. For state governments, on the other hand, new protected areas will not yield immediate financial benefits and, because of this, are developed based on more technically sound criteria and longer-term goals.<\/p>\n

\"\"

Jaelson Lucas\u2009\/\u2009City of Curitiba<\/span>Protected area in Curitiba, Paran\u00e1Jaelson Lucas\u2009\/\u2009City of Curitiba<\/span><\/p><\/div>\n

\u201cState governments use the ICMS-E framework to incentivize local implementation of conservation strategies, typically in accordance with stringent requirements, while municipal governments are primarily concerned with using low-cost solutions to boost tax revenues,\u201d explains Patricia Ruggiero, a biologist who completed doctoral research in 2018 under the supervision of Jean Paul Metzger at USP\u2019s Institute of Biosciences, and under the cosupervision of Alexander Pfaff, at the Duke University School of Public Policy, and Paula Pereda, at the School of Economics, Business, and Accounting at USP\u2014the latter two coauthored the study. Another of their findings was that the impacts from the tax framework declined over time. \u201cThe framework sets municipalities on a race of sorts, with the first to create protected areas receiving larger tax transfers in the short term. But as other municipalities join the race, their slice of the tax transfer becomes smaller and smaller, and the mechanism gradually becomes less attractive,\u201d explains Ruggiero.<\/p>\n

According to the study, published in January in Ecological Economics<\/em>, tax transfers as rewards for environmental protection policies have been adopted in Portugal and France, and are being considered for adoption in other European countries, such as Germany and Poland. India has implemented ecological fiscal transfers at the largest scale, covering its entire territory, but without this resulting in increased investment in preservation.<\/p>\n

Brazil\u2019s program is the oldest of its kind globally. It was first made possible by a provision of the country\u2019s 1988 Constitution that gave states a mandate to enact local laws governing the distribution of the 25% slice of state tax revenues that goes to municipal governments. The first state to adopt the scheme was Paran\u00e1, initially in its 1989 State Constitution and, two years later, under a law that set aside 5% of tax transfers for municipalities hosting springs and protected areas, including Indian reservations. \u201cThe ICMS-E framework was originally the result of political pressure from municipalities in the metropolitan area of Curitiba, which argued that they were being unfairly penalized by having to reserve part of their land to protect water supplies for the state capital,\u201d explains crop scientist Wilson Loureiro, who was one of the architects of Paran\u00e1 State\u2019s tax regulations during his time at the Paran\u00e1 Environmental Institute (IAP)\u2014he is now a professor at the Federal University of Paran\u00e1 (UFPR). \u201cIn drafting Paran\u00e1\u2019s new Constitution, we addressed these demands from cities hosting protected areas.\u201d According to the IAP, the total area covered by protected areas in the state expanded by 160% from the 1990s to the 2000s.<\/p>\n

\"\"

Paulo Stefani\u2009\/\u2009Sectur Ilhabela<\/span>Ilhabela, S\u00e3o Paulo: Brazilian cities that preserve their native vegetation get a budget boostPaulo Stefani\u2009\/\u2009Sectur Ilhabela<\/span><\/p><\/div>\n

Another 14 Brazilian states have since implemented similar tax transfer schemes to reward cities implementing environmental policies, each using its own approach. Transfer percentages range from 1% of municipalities\u2019 stake in tax revenues, in the state of Mato Grosso do Sul, to 13% in Tocantins. Similarly, tax distribution criteria range from less to more restrictive. In Rio de Janeiro, Roraima, Acre, and Amap\u00e1, for example, bonus transfers are awarded to all states hosting protected areas. Other states have introduced additional criteria, such as whether municipalities have adopted waste management (Cear\u00e1, Piau\u00ed, and S\u00e3o Paulo) and sanitation (Pernambuco and Tocantins) policies and whether they host hydroelectric reservoirs (S\u00e3o Paulo) or Indian reservations (Mato Grosso and Rio Grande do Sul). Minas Gerais established a longer list of requirements, including education, cultural heritage, and food production metrics\u20141.1% of municipal tax allocations are determined by environmental parameters. \u201cThe ICMS-E framework has been proven successful in steering local government policies,\u201d says Barreiro. \u201cIt comes at a zero cost for state governments, as it has no effect on their tax revenues. The mechanism could be applied for other purposes, including as an incentive for low-carbon agriculture.\u201d<\/p>\n

The ICMS-E framework led to a proliferation of less restrictive protected areas that are easier to create<\/p><\/blockquote>\n

S\u00e3o Paulo awards one of the smallest transfer percentages\u2014just 1%. But because the state\u2019s tax revenues are among the highest in Brazil in absolute terms, this percentage has been sufficient to incentivize the expansion of protected areas. Under the state tax legislation in effect up until last year, tax transfer percentages were awarded not on the basis of protected areas instituted by municipal governments, but instead on the basis of those established under plans agreed between the state government and individual mayors, together with the amount of area occupied by hydropower reservoirs. In 2021, the percent allocation increased from 1% to 2% of ICMS tax revenue. The previous rules were maintained, but with the larger allocations now allowing for additional rules to be introduced, including the amount of area covered by native vegetation, excluding protected areas, and whether municipalities have waste management plans. \u201cToday we have affordable technology we can use to monitor protected areas, even those not created under municipal decrees,\u201d says Ruggiero. \u201cThe reform rewards municipalities for what ultimately matters, which is the amount of native vegetation that is preserved, potentially making the framework more effective;\u201d<\/p>\n

Ruggiero\u2019s research reveals the importance of creating financial incentives both for expanding protected areas and for implementing mechanisms to maximize ecological benefits, says Rafael Barreiro Chaves, an ecology expert at the S\u00e3o Paulo State Department of Infrastructure and Environment (SIMA), who was not involved in the study. \u201cS\u00e3o Paulo\u2019s experience shows the benefits of policies that encourage municipalities to join broader, state-wide programs, and now we have the public-policy science to prove it,\u201d he says. Alongside his role at SIMA, Chaves serves as deputy director at Biota S\u00edntese, a FAPESP-funded project as part of S\u00e3o Paulo\u2019s Problem-Oriented Research Program. The project, led by Jean Paul Metzger, explores academic research about biodiversity and ecosystem services to inform new social and environmental programs, especially programs leveraging nature-based solutions. \u201cIt\u2019s not just about compiling and reviewing scientific data, but about developing a methodology that can provide inter- and cross-disciplinary insights and draw meaningful information from collected data to inspire new ideas, models, paradigms, and theories,\u201d said Metzger during the project kickoff ceremony.<\/p>\n

Scientific article<\/strong>
\nRuggiero, P. G. C. et al<\/em>. The Brazilian intergovernmental fiscal transfer for conservation: A successful but self-limiting incentive program<\/a>. Ecological Economics<\/strong>. Vol. 191. Jan. 2022.<\/p>\n","protected":false},"excerpt":{"rendered":"New study sheds light on impacts from bonus tax transfers to incentivize expansion of municipal protected areas in Brazil ","protected":false},"author":11,"featured_media":438342,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[166],"tags":[224,200,234,256],"coauthors":[98],"class_list":["post-438341","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-policies-st-en","tag-ecology","tag-environment","tag-finance","tag-public-policies"],"acf":[],"_links":{"self":[{"href":"https:\/\/revistapesquisa.fapesp.br\/en\/wp-json\/wp\/v2\/posts\/438341","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/revistapesquisa.fapesp.br\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/revistapesquisa.fapesp.br\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/revistapesquisa.fapesp.br\/en\/wp-json\/wp\/v2\/users\/11"}],"replies":[{"embeddable":true,"href":"https:\/\/revistapesquisa.fapesp.br\/en\/wp-json\/wp\/v2\/comments?post=438341"}],"version-history":[{"count":2,"href":"https:\/\/revistapesquisa.fapesp.br\/en\/wp-json\/wp\/v2\/posts\/438341\/revisions"}],"predecessor-version":[{"id":439135,"href":"https:\/\/revistapesquisa.fapesp.br\/en\/wp-json\/wp\/v2\/posts\/438341\/revisions\/439135"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/revistapesquisa.fapesp.br\/en\/wp-json\/wp\/v2\/media\/438342"}],"wp:attachment":[{"href":"https:\/\/revistapesquisa.fapesp.br\/en\/wp-json\/wp\/v2\/media?parent=438341"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/revistapesquisa.fapesp.br\/en\/wp-json\/wp\/v2\/categories?post=438341"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/revistapesquisa.fapesp.br\/en\/wp-json\/wp\/v2\/tags?post=438341"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/revistapesquisa.fapesp.br\/en\/wp-json\/wp\/v2\/coauthors?post=438341"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}