Davos Agenda

Data analytics can help protect the Amazon Basin. Here’s how

An aerial view shows a deforested plot of the Amazon rainforest in Manaus, Amazonas State, Brazil July 8, 2022.

An aerial view shows a deforested plot of the Amazon rainforest in Manaus, Amazonas State, Brazil. Image: REUTERS/Bruno Kelly.

Ilona Szabó de Carvalho
Co-founder and President, Igarape Institute
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Davos Agenda

This article is part of: World Economic Forum Annual Meeting

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  • Destruction of the Amazon will cause irreversible climate damage unless we intervene.
  • Environmental crimes, such as illegal logging and wildlife trafficking, are major problems in the region.
  • Better data insights can support environmentally responsible economic opportunities.

The Amazon is approaching a dangerous tipping point of emitting more carbon dioxide than it absorbs. The resulting feedback loops could irreversibly transform the world’s largest tropical rainforest into dry savannah, and severely jeopardise international efforts to keep global warming below 1.5C.

This is not just a possible scenario in some distant future – scientists believe that parts of the Amazon may already be close to that threshold due to relentless human-caused fires and land clearing to meet growing global demand for commodities like soy, beef and gold.

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Commitments to protect the Amazon rainforest through measures ranging from conservation to carbon credits are necessary, albeit insufficient in the face of a sprawling ecosystem of environmental crime. Alongside the expansion of industrial-scale agriculture and cattle production are a litany of illicit economies ranging from land grabbing, illegal logging, wildcat mining and wildlife trafficking. In fact, a startling 94% of deforestation of the Amazon is illegal, perpetuated by chronically weak rule of law and the perception of a lack of viable economic alternatives.

Environmental crimes in the Amazon

Across all eight countries of the Amazon Basin, environmental crime "converges" with illicit activities like fraud, corruption, money laundering, tax avoidance and violent crime. Environmental crime in the region is also increasingly dominated by organised crime including criminal rackets, mafias and international drug traffickers. All of this helps to explain the soaring rates of gang and interpersonal violence in the Amazon, particularly against Indigenous peoples and environmental defenders.

Given the strong connection between weak law enforcement and Amazon deforestation and degradation, consolidating the rule of law and territorial control in environmental crime hot spots should be top priorities. The restoration of public security must also be accompanied not only by intelligence-led policing and robust criminal justice, but also incentives and investments that power a green ecosystem of jobs, education and innovation. In order to make this a reality, it is essential that private sector actors address environmental, social and governance (ESG) risks, deepen their understanding of on-the-ground realities, and strengthen their engagement with local communities.


What’s the World Economic Forum doing about deforestation?

How can better data protect the Amazon?

Access to reliable and timely data is key to reducing the so-called “Amazon cost” and promoting smart, responsible and profitable investment decisions that generate economic opportunities that do not come at the expense of the standing forest.

Private sector actors can use data to better assess the opportunities and costs of doing business in specific areas. In a vast and vulnerable region like the Amazon, “know the territory” is at least as vital as “know your client”. Insights from relevant information can also assist investors and companies in designing transition strategies that unlock opportunities for sustainable development that respects traditional and local populations.

However, getting a handle on the territorial complexity of the Brazilian Amazon is no small task. Even the most determined of players must navigate the fog of land tenure policy, legal and jurisdictional entanglements, potential disputes over property and resources, and overlapping land designations. None of this is straightforward, and indeed research tells us that the region has at least five different "Amazons", each with their own ecological, economic and socio-political conditions.

Public and private sector decision makers need access to robust overviews of the real and potential on-the-ground risks and opportunities that can impact businesses operating in the Amazon region. Data can help private asset managers, banks and corporations – in addition to public administrators and policy makers – improve due diligence by shedding light on local realities and providing a new perspective on territorial impacts that go beyond macro-level international ESG standards.

Amazonia In Loco dashboard. Source: Igarapé Institute.
Amazonia In Loco dashboard. Source: Igarapé Institute.

Effective data analysis should be ramped up to pre-emptively identify, manage and mitigate risks across portfolios and incorporate this information into new investment strategies, risk ratings and credit models that provide the foundation for innovative financial instruments and impact investments.

A series of publicly-available tools are already in use by a variety of vanguard actors. For instance, MapBiomas contains extensive data on trends in land cover and land use in Brazil, and the Selo Verde platform enables users to evaluate the environmental compliance of individual properties in the state of Pará. PrevisIA, in turn, uses artificial intelligence to highlight areas at imminent risk of deforestation.

Additionally, a new tool is being launched. The "Amazonia In Loco" dashboard aims to fill critical local-level information gaps and accelerate responsible investment in the region. It provides an in-depth understanding of environmental, social, economic and demographic dynamics in the 772 municipalities that comprise the Brazilian Legal Amazon. It features interactive maps and charts that cover topics such as protected areas, biodiversity hotspots, economic productivity, socioenvironmental challenges and recommended sustainable technologies.

Despite their enormous potential, the countries of the Amazonian Basin still account for a modest share of global markets for “forest-compatible” products, worth $177 billion annually. Brazil, by far the largest Amazonian country, accounts for only 1.3% of these global markets. Substantial investment in bioeconomy, agroforestry and payments for environmental services must grow if the global business community is serious about protecting the Amazon rainforest and offering meaningful alternatives to those who live there. Time is running out and urgent yet informed action from responsible private sector actors is absolutely necessary.

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