Project information document (pid) appraisal stage

Report No.: 31773

1. 
   Country and Sector Background
   

The State of Rio de Janeiro (RJS) is unique in Brazil for having the highest percentage of the Atlantic Forest biome with respect to total area among all of the country’s states. Moreover, it is overlapped by a large portion of the Serra do Mar Corridor, considered to be one of the richest and globally most significant remnants of the original Atlantic Forest in the country. In RJS, the North and Northwestern Fluminense (NNWF) administrative areas have the largest stands of remaining forest in the State. Fortunately, some of these tracts are already being conserved in protected areas (PAs). In addition, there exist a number of additional, albeit smaller, forest fragments dispersed throughout the region, mostly located on private lands.

Despite the global significance of the biodiversity of the biome, these areas are threatened by: (i) deforestation primarily attributable to logging and charcoal production (tropical moist broadleaf forests), and (ii) small-holder agricultural expansion manifested through introduction of conventional monocropping (floodplain forests and grasslands), slash and burn agriculture (tropical semi-deciduous forests), and irrigated horticulture (restingas and mangroves). In response, the Federal and State governments have initiated a number of attempts to conserve existing biodiversity, arrest the processes that lead to degradation, and rehabilitate existing, degraded lands.

In the corridor that extends from south and north-central RJS to Minas Gerais and São Paulo State, the Critical Ecosystem Partnership Fund (CEPF) is supporting a number of activities designed to increase the number and size of priority areas under protection. In the NNWF specifically, the most recent initiative to conserve biodiversity is the soon to be implemented KfW-supported Pro-Atlantic Forest Program which is focused on strengthening: (i) management of the Desengano Park and the Mata do Carvao Reserve, the two main protected areas (PAs) in the NNWF; and (ii) the enforcement system in and around the PAs. In terms of arresting and reversing the processes leading to degradation of the biome, key programs focusing on smallholder agriculturalists include: (i) the National Smallholder Agriculture Program (PRONAF) that provides support for smallholder agricultural credit and basic infrastructure (e.g., road repair and rural electrification); and (ii) the Microcatchment State Program for Rural Sustainable Development (Rio Rural) and (iii) the State Program for Fruit Production and Diversification (Frutificar) - all designed to promote sustainable agriculture practices among smallholders while increasing their socio-economic well-being. Despite these efforts much remains to be done.

Key constraints which limit the effectiveness of the aforementioned responses to threats to biodiversity conservation while promoting sustainable agricultural practices include: (i) an absence of policies and institutional frameworks which promote the incorporation of ecological considerations in human settlement and agricultural production systems; (ii) limited human and financial resources to facilitate the integration of ecological planning principles in sector policies and institutional processes; (iii) the lack of alternative livelihoods relevant to communities living in proximity to areas of high biodiversity; and (iv) low public awareness of the significance of, threats to, and potential solutions leading to the sustainable management of, the Atlantic Forest.

Bearing these constraints in mind, the project will support an integrated ecosystem management (IEM) approach to the conservation of the Atlantic Forest within the broader framework of the Serra do Mar Corridor. The few remaining large areas of native forest in the NNWF are already under some form of protection and the aforementioned KfW project will support the improved management of these areas. To complement this approach, and in light of the numerous smaller forest fragments dispersed throughout the region, the project strategy will focus its activities at the microcatchment level, working to revert land degradation and foster biodiversity-friendly activities and attitudes in areas within and in proximity to these forest remnants. As project implementation progresses, microcatchment "clusters” (defined as significant numbers of farmers who adopt sustainable agricultural practices and biodiversity-friendly approaches) will contribute to the gradual development of the biological corridor through linking protected areas and forest fragments. This will contribute to benefits at the local level and will also enhance biodiversity conservation within the PAs through the corridor effect while supporting increased public awareness in adjacent communities. Such an approach will ensure that biodiversity of global importance can be conserved. Moreover, the protection of this forest will serve to store a significant amount of carbon and thus reduce the net emission rate of CO₂ into the atmosphere. Similarly, the adoption of sustainable land management practices in other productive landscapes can make a substantial contribution to carbon storage.

2. 
   Objectives
   

 Change in total land area characterized by biodiversity-friendly agricultural practices that enhance soil structure stability in microcatchments (1,140 ha by PY 5);

 Total area of riparian and other indigenous forests rehabilitated for biodiversity conservation and hydrology stabilization objectives (570 ha by PY5);

 Area of biodiversity conservation-friendly land use mosaics established on private lands supporting corridor connectivity in project watersheds (320 ha by PY5;

 Reduction in erosion (50 % by PY5) and downstream sedimentation (50 % by PY5) rates in at least 5 microcatchments; and amount of CO2 sequestered (1.5 ton of CO2 per ha by PY5);

 Creation of coordinating bodies characterized by significant stakeholder representation from microcatchment, municipal and state levels (1 Regional Committee by PY 1; 50 local/microcatchment Committees by PY2);

 By PY4, 30 rural community organizations created that have adopted and implemented IEM strategies in 50 microcatchments;

• 
  Education, training and awareness of beneficiary stakeholders (2,400 by PY5), project executors (150 by PY 4), and schools (25 by PY4);
  
• 
  Best practices and lessons learned disseminated through workshops/events in the NNWF region (20 by PY3 and 30 by PY 5), national workshops (4 by PY5), media campaign (3 by PY5) and a homepage (1 by PY 1).
  

The proposed project is consistent with the current Country Assistance Strategy (CAS), in support of “A More Equitable, Sustainable, and Competitive Brazil,” and would help strengthen one of the five pillars for development identified in the CAS, that of Environment and Natural Resource Management, and is relevant to each of the three specific themes identified under this pillar: (1) natural resource management; (2) environmental protection and management; and (3) global environmental externalities, including carbon sequestration and biodiversity. In addition, the proposed project would contribute to more sustainable land management, one of the long-term country goals identified in the CAS. Furthermore, the project is fully consistent with the CAS’s emphasis on the importance of coupling conservation strategies with efforts for poverty reduction and sustainable growth.

3. 
   Rationale for Bank Involvement
   

4. 
   Description
   

This component promotes the formulation of incentive policies, regulations and plans to orient interventions by decision makers and rural producers in support of natural resources sustainability and management of ecosystems as landscapes. These are key elements in the development of a dynamic framework for rural and environmentally sustainable decision-making to be supported under the project. There are two sub-components: (i) Development of Policies, Regional Plans and Regulations and (ii) Local Land Management Planning.

This component will provide incentives for small farmers and other relevant natural resource managers to shift from existing non-sustainable agriculture practices to sustainable livelihood activities which enhance biodiversity, reduce or reverse land degradation, and increase carbon sequestration within an IEM framework. It has two sub-components: (i) Financial Incentive Program for Sustainable Agriculture and (ii) Support to Adaptive Management Practices (targeted research to address technical constraints associated with different sustainable land uses).

The objective of this component is to facilitate the creation of environments favorable to the formation and strengthening of rural organizations for self-management of natural resources. It will support training, education and associated community efforts designed to promote biodiversity conservation and sustainable management of natural resources. Its sub-components are: (i) Community Organization, (ii) Training of Project Executors, and (iii) Training and Environmental Education of Beneficiaries.

The objectives of this component are to ensure the effective implementation of project activities and management of resources; to monitor whether or not the project is achieving the desired results or would need to be adjusted or changed; and to increase the potential for repeating project lessons and transferring experiencex at state, national and international levels. There are three sub-components: (i) Participatory Management of the Project, (ii) Monitoring and Evaluation, and (iii) Project Dissemination.

The project covers 5 watersheds (a total of 6,570 Km² and 44 % of the NNWF) and the 24 municipalities that overlap with the NNWF region (two of these municipalities belong to the Região Serrana administrative region of RJS)¹. Within these five watersheds, on-the-ground pilot activities will be supported in approximately 50 microcatchments (to be selected in PY1). Based on previous surveys carried out by EMATER-Rio, the 50 microcatchments are expected to cover an area of about 100,000 ha (15% of the aggregate area of the five watersheds) and be home to approximately 4,000 rural families. In addition, a significant percent of the rural population of the NNWF will be targeted through project-supported activities designed to increase environmental awareness through the local media.

The proposed project would take into account the views, roles, and rights of these stakeholders, and would involve them in planning, designing, implementing, monitoring, and evaluating the project. The project will bring economic and social benefits to the target population, particularly through the provision of appropriate training, technical assistance and supporting incentives to rural producers and stakeholder groups leading to adoption of improved environmental and production practices.

5. 
   Financing