[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]


            PRESERVING THE AMAZON: A SHARED MORAL IMPERATIVE

=======================================================================

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
          THE WESTERN HEMISPHERE, CIVILIAN SECURITY, AND TRADE

                                 OF THE

                      COMMITTEE ON FOREIGN AFFAIRS
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED SIXTEENTH CONGRESS

                             FIRST SESSION

                               __________

                           September 10, 2019

                               __________

                           Serial No. 116-60

                               __________

        Printed for the use of the Committee on Foreign Affairs
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

Available: http://www.foreignaffairs.house.gov/, http://docs.house.gov, 

                           or www.govinfo.gov                          
                           
                               __________
                               

                    U.S. GOVERNMENT PUBLISHING OFFICE                    
37-563PDF                  WASHINGTON : 2019                     
          
--------------------------------------------------------------------------------------                           
                           
                           
                      COMMITTEE ON FOREIGN AFFAIRS

                   ELIOT L. ENGEL, New York, Chairman
BRAD SHERMAN, California             MICHAEL T. McCAUL, Texas, Ranking 
GREGORY W. MEEKS, New York               Member
ALBIO SIRES, New Jersey		     CHRISTOPHER H. SMITH, New Jersey     
GERALD E. CONNOLLY, Virginia         STEVE CHABOT, Ohio
THEODORE E. DEUTCH, Florida	     JOE WILSON, South Carolina
KAREN BASS, California		     SCOTT PERRY, Pennsylvania
WILLIAM KEATING, Massachusetts	     TED S. YOHO, Florida
DAVID CICILLINE, Rhode Island	     ADAM KINZINGER, Illinois
AMI BERA, California		     LEE ZELDIN, New York
JOAQUIN CASTRO, Texas		     JIM SENSENBRENNER, Wisconsin
DINA TITUS, Nevada		     ANN WAGNER, Missouri
ADRIANO ESPAILLAT, New York          BRIAN MAST, Florida
TED LIEU, California		     FRANCIS ROONEY, Florida
SUSAN WILD, Pennsylvania	     BRIAN FITZPATRICK, Pennsylvania
DEAN PHILLPS, Minnesota	             JOHN CURTIS, Utah
ILHAN OMAR, Minnesota		     KEN BUCK, Colorado
COLIN ALLRED, Texas		     RON WRIGHT, Texas
ANDY LEVIN, Michigan		     GUY RESCHENTHALER, Pennsylvania
ABIGAIL SPANBERGER, Virginia	     TIM BURCHETT, Tennessee
CHRISSY HOULAHAN, Pennsylvania       GREG PENCE, Indiana
TOM MALINOWSKI, New Jersey	     STEVE WATKINS, Kansas
DAVID TRONE, Maryland		     MIKE GUEST, Mississippi
JIM COSTA, California
JUAN VARGAS, California
VICENTE GONZALEZ, Texas                              
                        


                    Jason Steinbaum, Staff Director
              Brendan Shields,  Republican Staff Director
                                 ------                                

  Subcommittee on the Western Hemisphere, Civilian Security, and Trade

                   ALBIO SIRES, New Jersey, Chairman

GREGORY W. MEEKS, New York           FRANCIS ROONEY, Florida,
JOAQUIN CASTRO, Texas                  Ranking Member
ADRIANO ESPAILLAT, New York	     CHRISTOPHER H. SMITH, New Jersey
DEAN PHILLIPS, Minnesota             TED S. YOHO, Florida
ANDY LEVIN, Michigan	     	     JOHN CURTIS, Utah
VICENTE GONZALEZ, Texas	     	     KEN BUCK, Colorado
JUAN VARGAS, California	     	     MIKE GUEST, Mississippi


                  Alexander Brockwehl,  Staff Director
                            
                            
                            C O N T E N T S

                              ----------                              
                                                                   Page

        INFORMATION FOR THE RECORD SUBMITTED FROM CHAIRMAN SIRES

Statement for the record submitted by Chariman Sires from former 
  Congressman Henry Waxman.......................................     2

                           OPENING STATEMENT

Opening statement submitted for the record from Chairman Sires...     6

                               WITNESSES

De Bolle, Dr. Monica, Director, Latin American Studies Program, 
  School of Advanced International Studies, Johns Hopkins 
  University, Senior Fellow, Peterson Institute For International 
  Economics......................................................    12
Nepstad, Dr. Daniel, President and Executive Director, Earth 
  Innovation Institute...........................................    21
Millan, Bill, Chief Conservation Officer and Director of Policy, 
  International Conservation Caucus Foundation...................    30

                                APPENDIX

Hearing Notice...................................................    49
Hearing Minutes..................................................    50
hearing Attendance...............................................    51

              ADDITONAL MATERIALS SUBMITTED FOR THE RECORD

Amensty International letter submitted for the record from 
  Chairman Sires.................................................    52

 
            PRESERVING THE AMAZON: A SHARED MORAL IMPERATIVE

                      Tuesday, September 10, 2019

                        House of Representatives

                Subcommittee on the Western Hemisphere,

                      Civilian Security and Trade

                      Committee on Foreign Affairs

                                     Washington, DC

    The committee met, pursuant to notice, at 10 a.m., in room 
2172 Rayburn House Office Building, Hon. Albio Sires (chairman 
of the subcommittee) presiding.
    Mr. Sires. Good morning. This hearing will come to order. 
This hearing, titled ``Preserving the Amazon: A Shared Moral 
Imperative,'' will focus on the fires taking place in the 
Brazilian Amazon to highlight the global importance of the 
Amazon and the role we in the United States should play in 
helping to combat climate change and protect the rain forest.
    Without objection, all members may have 5 days to submit 
statements, questions, extraneous materials for the record, 
subject to the length limitation in the rules.
    I would like to submit a statement for the record from my 
friend and former colleague, Henry Waxman of California.
    [The information referred to follows:]

    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Sires. I will now make an opening statement and then 
turn it over to the ranking member for his opening statement.
    Good morning, and thank you for being here today as our 
witnesses on this hearing. I convened this hearing because 
protecting the Amazon is vital for the health of our planet.
    The Amazon rainforest is the most biodiverse region in the 
world. It contains approximately one-fifth of the world's 
surface fresh water supply.
    The water released by the Amazon's plants and rivers impact 
climate throughout South America and can affect precipitation 
and the severity of droughts.
    The Amazon also stores billions of tons of carbon dioxide, 
a portion of which enters the atmosphere when deforestation 
occurs, potentially accelerating global climate change.
    For these reasons and many more, the fires currently 
burning in the rainforest are an issue that should concern all 
of us. While the fires have helped draw attention to what is 
happening in the Amazon, we know that they are just one symptom 
of the much bigger problem of deforestation.
    Scientists generally agree that the Amazon could reach a 
tipping point if current deforestation trends continue. This 
scenario would jeopardize the many benefits the Amazon provides 
to our climate and would threaten millions of plants and animal 
species the rainforest ecosystem supports.
    The goal of this hearing is to understand the causes and 
scope of the problem and explore solutions to preserve the 
Amazon.
    Today, we will hear experts' analysis of Brazil's 
environmental protection policies, challenges to their 
implementation, and recommendations about what more needs to be 
done.
    I deeply value our relationship with Brazil and appreciate 
the Brazilian government's historical commitment to balance its 
promotion of economic development with efforts to preserve the 
environment.
    In looking for a path to success we can look to Brazil's 
recent past. From 2005 to 2014, deforestation in the Brazilian 
Amazon declined by over 70 percent during the same period the 
Brazilian economy grew and nearly 30 million people were lifted 
out of poverty.
    In other words, well-regulated economic development efforts 
have gone hand in hand with successful environmental protection 
programs in the past.
    There is no reason why this cannot be achieved again. I 
believe the United States has a role to play in supporting 
Brazil on this issue and I urge my colleagues on both sides of 
the aisle to work together in fulfilling our global leadership 
role.
    We must also support the indigenous communities that live 
in the Amazon whose right to live on their ancestral lands for 
generations to come depends on the health of the rainforest.
    Preserving the Amazon is not just the right thing to do. 
This is an issue that directly affects our own constituents 
because the health of the Amazon rainforest ultimately impacts 
the water we drink and the air we breathe.
    Unfortunately, the United States cannot be a leader in the 
environmental if we do not return to policies of acknowledging 
the scientific reality of global climate change.
    I strongly criticized the Trump Administration's decision 
to withdraw from the Paris Climate Agreement not only because 
it ignored overwhelming scientific evidence but also because it 
has undermined our credibility on the world stage and hurt our 
national security interests.
    This should not be a partisan issue. If we do not take the 
threat of climate change seriously, our children and 
grandchildren will never forgive us for failing to meet the 
moral demand of our time.
    Today, I look forward to a bipartisan discussion about how 
the U.S. Congress can advocate for the necessary policies to 
combat climate change and work with the Brazilian government to 
protect the Amazon.
    Thank you, and I know turn to Ranking Member Rooney for his 
opening statement.
    [The prepared statement of Mr. Sires follows:]

    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Rooney. Thank you, Chairman Sires.
    I think this hearing on the shared moral imperative of the 
Amazon is very important. The media is focused on the Amazon in 
recent weeks because of the fires there.
    The fires have broadened public awareness of the unique 
ecological importance of the region and its global impact. I 
personally have spent much time there. I have traversed it from 
Iquitos, Peru to Manaus, Brazil and have navigated the Napo in 
Ecuador.
    In Brazil, the Amazon biome constitutes 2.1 million square 
miles of rainforest, 40 percent of the world's, so the world 
has a vested interest in preserving the Amazon rainforest.
    It contains nearly one-half of the world's carbon, which is 
in many ways an essential defense against global climate 
change.
    Recent concerns over deforestation and fire hot spots in 
the Amazon are legitimate and credible. However, this year's 
number of fires registers as the eighth highest in the last 20 
years and 2018's was the twelfth highest.
    While not the highest number of fires in hectares of 
deforestation, they are still unacceptable. The governments of 
the region have the responsibility to enforce the laws and take 
the necessary measures to preserve the Amazon.
    Laws and regulations enacted by Brazil since 2004 have 
reduced deforestation and placed regulations on legal burning 
and land-clearing practices.
    Within the Amazon biome, private property owners are 
mandated to conserve at least 80 percent of their lands' native 
vegetation.
    Further, Brazil's commitment to the 2009 Copenhagen 
Agreement has reduced deforestation by 73 percent since its 
peak in 2004. that is a 2.28 gigaton reduction in CO2 
emissions.
    Brazil also invested in monitoring technology and data 
bases to detail events in the Amazon while also investing in 
renewable resources to achieve 45 percent usage of renewable 
energy.
    Further, just last week, leaders from Brazil, Bolivia, 
Colombia, Ecuador, Guyana, Peru, and Surinam held a regional 
summit in Colombia to discuss regional measures to protect the 
Amazon.
    The United States and the international community must also 
work with these countries to advance conservation of the Amazon 
rainforest.
    The United States provided over $20 million in foreign aid 
assistance for natural resource and biodiversity conservation 
in 2017 and 2018, and created the partnership for conservation 
of the Amazon Biodiversity Program, which conserves the Amazon 
through management and monitoring of protected areas.
    It also considers the critical role of the private sector 
in developing public-private partnerships aimed at conservation 
and sustainability for existing communities within the Amazon.
    Through USAID, the Forest Service works with the Brazilian 
government on sustainable forest management and biodiversity.
    In Fiscal Year 2019, Congress appropriated $11 million 
through USAID to be used for environmental programs. 
International cooperation is essential to preserving the Amazon 
rainforests but will only be effective if the host governments 
are committed to meeting conservation goals.
    As a representative from southwest Florida whose district 
includes the Everglades, I have a thorough understanding of the 
importance of preserving our watersheds.
    Data shows that what happens in the Amazon affects us in 
Florida and throughout the United States from rain patterns in 
the Midwest to the sargassum grass washing up on the beaches in 
the Caribbean, Cancun, and the Gulf of Mexico now, and the 
algae blooms in the Gulf of Mexico.
    These blooms, which severely threaten tourism-based 
economies in Florida and the other coastal areas, are partly 
caused by nutrient runoff from the Amazon.
    I will continue to work with my colleagues in Congress as 
well as international partners in the Brazilian government to 
seek reduced burning, reduced deforestation, and reduced 
outflow of polluted water through the Amazon watershed.
    I look forward to hearing the testimoneys and opinions of 
our important witnesses today.
    And thank you, Mr. Chairman. I yield back the balance of my 
time.
    Mr. Sires. Thank you very much, Ranking Member Rooney.
    I will now introduce Dr. Monica de Bolle. She is the 
director of the Johns Hopkins School of Advanced International 
Studies, Latin American Program and holds the Riordan Roett 
Chair at Johns Hopkins.
    She has also a senior fellow at the Peterson Institute of 
International Economics. She previously worked as the director 
for the Institute for Economic Policy Research in Brazil and as 
an economist at the International Monetary Fund. She holds a 
Ph.D. in economics from the London School of Economics. 
Welcome.
    We will hear from Dr. Dan Nepstad, the president and 
founder of the Earth Innovation Institute. Dr. Nepstad has 
worked in the Brazilian Amazon for more than 30 years, 
publishing over 160 papers and books on regional ecology and 
public policy.
    Before founding the Earth Innovation Institute, he was a 
senior scientist at Woods Hole Research Center, a lecturer at 
Yale University, and co-founder of the Amazon Environmental 
Research Institute.
    He was also a lead author of the fifth assessment report by 
the Intergovernmental Panel on Climate Change. He holds a Ph.D. 
in forest ecology from Yale University. Thank you for being 
here.
    Finally, we will hear from Mr. Bill Millan, chief 
conservation officer and director of policy at the 
International Conservation Caucus Foundation.
    Previously, Mr. Millan was a career Foreign Service officer 
for over 20 years.
    He served in U.S. embassies in Colombia and Venezuela and 
worked as a political counselor at the U.S. Mission to the 
Organization of American States.
    He is a U.S. Army veteran and earned two Bronze Stars in 
Vietnam. He received his Master's degree from the University of 
Virginia. Thank you for your service and for joining us here 
today.
    I ask the witnesses to please limit your testimony to 5 
minutes, and without objection your prepared written statements 
will be made part of the record.
    Dr. de Bolle, it is now your turn.

  STATEMENT OF DR. MONICA DE BOLLE, DIRECTOR, LATIN AMERICAN 
  STUDIES PROGRAM, SCHOOL OF ADVANCED INTERNATIONAL STUDIES, 
JOHNS HOPKINS UNIVERSITY, SENIOR FELLOW, PETERSON INSTITUTE FOR 
                    INTERNATIONAL ECONOMICS

    Dr. de Bolle. Good morning, Mr. Chairman, members of the 
committee. It is my distinct honor to testify before you today 
on how Brazil and the United States should work together to 
preserve the Amazon rainforest.
    Mr. Chairman, my remarks this morning will summarize my 
submitted written testimony.
    Global warming is widely and correctly blamed for wildfires 
around the world. But the Amazon fires in Brazil represent a 
more specific government policy failure as Brazilian public 
agencies that are supposed to curb man-made fires have been 
deliberately weakened.
    These fires set by farmers, cattle growers, and others take 
place every year. But they have risen in number and severity in 
2019.
    After President Jair Bolsonaro took office, he set about 
fulfilling his campaign pledge to ease environmental land use 
and health regulations.
    The Amazon fires are not just a tragedy but an opportunity 
for the governments of Brazil and the United States to stop 
denying climate change and cooperate on strategies to preserve 
the rainforest and develop ways to sustainable use its natural 
resources.
    The record of such cooperation has already yielded positive 
results. For example, there is a history of collaboration 
between NASA and Brazil's National Institute for Space 
Research, employing state-of-the-art technologies to monitor 
deforestation.
    It is possible to accommodate competing demands of economic 
interests, food security and saving or even restoring the 
Amazon rainforest along with its life-sustaining rainfall for 
Brazil and the world at large.
    Following are the major policy recommendations presented in 
this testimony. The United States should rejoin the Paris 
Climate Agreement and immediately establish a joint action plan 
with Brazil to implement steps to preserve and restore the 
rainforest.
    Under the Paris Agreement, Brazil has committed to 
restoring 12 million hectares of native vegetation in cleared 
areas. Brazil should impose greater regulations on land use in 
the Amazon that would allow farming and cattle grazing in some 
areas to sustain livelihoods of local and indigenous people 
while cracking down on illegal uses such as logging and mining 
and the invasion of public lands.
    To combat destructive activities, the government should 
encourage livestock rearing and cultivation in nonsensitive 
areas while more systemically demarcating land and property 
ownership rights in the rainforest itself.
    Brazil should lead an international effort to foster the 
diversity of native vegetation in the Amazon region while 
preserving the rainforest and also creating jobs and reducing 
poverty and income inequality which plague the region.
    Sustainable production of livestock and soy is already 
happening in areas outside the Amazon. These activities could 
be expanded to areas adjacent to the rainforest following an 
effort to demarcate land and enforce property rights.
    The international community should work with Brazil to 
revive and expand the Amazon Fund, created years ago but now in 
limbo, to raise international donations for investment in 
sustainable activities that protect the rainforest.
    The Fund would greatly benefit from the financial support 
of the United States. Technical cooperation agreements to 
develop new technologies for sustainable development are a 
must.
    Finally, the Brazilian constitution allows the economic 
exploration of indigenous lands in cooperation with local 
communities and with a focus on sustainability.
    However, use of these lands is yet to be formalized through 
adequate regulation. The United States with its experience in 
formulating and applying similar regulations can play a key 
role in advising the Brazilian government on such roles.
    The rise in deforestation precedes President Bolsonaro's 
electoral victory. But the dismantling of environmental 
agencies under his watch and his past and present rhetoric on 
environmental issues have emboldened farmers, loggers, and 
other players to engage in predatory behavior in the 
rainforest.
    It is time for the international community to cooperate on 
a strategy to provide the resources to conserve, restore, and 
develop the planet's largest continuous rainforest.
    The close relationship that has developed between the 
leaders of Brazil and the United States should be used to 
jumpstart this effort before it is too late.
    Thank you.
    [The prepared statement of Dr. de Bolle follows:]

    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Sires. Thank you very much.
    We will now hear from Dr. Nepstad.

   STATEMENT OF DR. DANIEL NEPSTAD, PRESIDENT AND EXECUTIVE 
              DIRECTOR, EARTH INNOVATION INSTITUTE

    Dr. Nepstad. Good morning. Thank you, Chairman Sires, and 
it is a real honor to be here to give this testimony. I will 
give a brief summary of my written submitted testimony.
    I moved to the Amazon in 1984 to begin my doctoral 
research. It was a Wild West town of Paragominas. One thing I 
learned there is that we tend to think of frontier towns as 
full of bandits and land grabbers.
    That place was full of families from across Brazil trying 
to improve their lot in life. I think that observation is still 
relevant today--the need to not demonize the people of the 
Amazon.
    The Amazon is important, as Ranking Member Rooney already 
mentioned, largely because of its role in the global climate 
system.
    There are seven or 8 years' worth of global emissions of 
carbons stored in the trees of the Amazon and if those come 
out--that carbon comes out rapidly it really diminishes the 
likelihood that humanity will avoid catastrophic climate 
change.
    But there is also an effect on global circulation patterns 
through the amount of water that is evaporated from Amazon 
trees. That is enough water, enough conversion of solar energy 
into water vapor to influence global circulation patterns much 
the way an El Nino event--a warming of the east Pacific surface 
waters--shapes rainfall patterns around the world.
    The current situation is dire but not unprecedented. 
Deforestation is up, currently estimated about 6,000 square 
kilometers against a historical average of 20,000 square 
kilometers per year--that average through 2005.
    But it is higher than last year, perhaps 40 or 50 percent, 
and it is certainly a cause for concern. There are a lot of 
fires but as has already been mentioned, this is not an 
unprecedented high year for fires-highest since 2010. And these 
two phenomena are related.
    Many of the fires today are persistent fires in the same 
position. That means burning little patches or large patches of 
felled forests where the trees have been dried for months and 
can now be set fire.
    That means that there is a lot of smoke coming out of the 
Amazon and that is creating tens of thousands of internments 
and respiratory ailments and deaths because of smoke 
inhalation.
    Intact forests--all of the available evidence suggests that 
they are not burning at scale, so forests that have neither 
been logged nor previously burned, and this is very good news.
    It is not a severely dry year, and this is a cause for 
concern. We need to be watching for those forests and make sure 
that if they start to catch fire there are teams on the ground 
ready to spot them and put them out because they are actually 
quite easy to put out--forest fires in intact forests.
    That is part of the Amazon die back scenario referred to by 
the chairman. A big part of that is wildfires basically--well, 
man-made fires escaping into intact forests.
    In 1998, 40,000 square kilometres of forest--standing 
forest caught fire, and once it burns a forest is more likely 
to burn again.
    And that, together with the fact that the Amazon forest 
generates much of its own rainfall come together in this Amazon 
forest die back scenario, and we may be close to the tipping 
point--the minimum--well, the area of deforestation beyond 
which that downward spiral begins.
    Finally, to the U.S. response, I want to call attention to 
what I feel in my many decades--years working in Brazil is a 
frustration--a frustration in the Brazilian government, in 
Brasilia nationally, in State governments, and among farm 
sectors that Brazil has done its part in climate change.
    There was a promise coming out of Copenhagen that there 
would be a robust international mechanism for compensating that 
contribution and that has not come through.
    Of the approximately 7 billion tons of emissions reductions 
achieved through reduced deforestation in the Amazon, about 3 
percent of that has been compensated through Norwegian and 
German contributions to the Amazon fund and direct contracts--
pay for performance contracts with the States of Mato Grosso 
and Acre in the Amazon region.
    There is, as referred to by Ranking Member Rooney, a very 
high bar for farmers. That has not been always the case. It 
jumped from 50 to 80, back to 50.
    There is a concern among farmers that the legal compliance 
that they are striving to achieve is not recognized. I think we 
are in the middle of a very strong backlash from the farm 
sector because of that failure to recognize how difficult it is 
to comply with the law there.
    I think, moving forward, this is not a time to back out of 
trade agreements. it is a time to stay in trade agreements, 
processes, and send a signal that if Brazil continues its 
historical march toward reducing deforestation there will be 
real benefits.
    We need to monetize those benefits as was done about 11 
years ago nearly by this House.
    I think I am out of time so thank you very much.
    [The prepared statement of Dr. Nepstad follows:]

    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Sires. Thank you.
    Mr. Millan.

   STATEMENT OF BILL MILLAN, CHIEF CONSERVATION OFFICER AND 
     DIRECTOR OF POLICY, INTERNATIONAL CONSERVATION CAUCUS 
                           FOUNDATION

    Mr. Millan. Thank you, Mr. Chairman.
    Like the others, I will submit my statement for the record 
and talk briefly extemporaneously on top of that statement.
    Thank you, Mr. Chairman. Thank you, Ranking Member Rooney, 
and other members of the committee.
    When I left diplomatic service I began working in 
conservation, something I have now done for 20 years. I have 
worked for many years in the international programs of the 
Nature Conservancy, which, of course, is very active in Brazil 
and the other countries of that region, and for the last 4 
years at the International Conservation Caucus Foundation, 
which acts as the secretariat for a caucus of members of this 
Congress, about 170 members of the House and Senate who are 
interested in and supportive of U.S. support and activism for 
conservation in the poor countries of the world--the developing 
countries of the world.
    Internationally, ICCF has created similar caucuses in about 
12 foreign countries and we are hoping to grow further in the 
near future.
    We are in Mexico, Colombia, and Peru. We are in nine 
countries of Africa, and we are hoping to expand into Indonesia 
and the Caribbean Island States starting next month.
    With regard to the Amazon, as the other speakers have 
noted, this is by far the world's largest tropical forest. 
About 90 percent of it is rainforest. About 20 percent of the 
original forest is already gone.
    Deforestation often occurs in stages. Where the lumber is 
valuable the loggers will clear cut. Would-be ranchers then 
come in and burn the slash that is left behind in order to 
clear the land for grazing, and later if the soil is suitable 
with modern fertilizers and methods, it may be converted to 
field crops such as soybeans.
    Deforestation is, of course, not unique to Brazil. It has 
also been high in neighboring Paraguay and Bolivia and in 
regions of Peru and Columbia.
    During the period of 1960 to 2010, the population of the 
Amazon Basin rose from 6 million to 25 million persons, many of 
them engaged in agriculture. This has, inevitably, had an 
effect.
    Deforestation of the Amazon in Brazil peaked at around 
2005, as you noted, Mr. Chairman. It subsequently dropped by 
about 70 percent.
    While market forces may have played some role in this 
decline, it was not mirrored in other countries of the Basin, 
which suggests that better enforcement of Brazilian laws which, 
for example, mandated that private landowners had to keep a 
percentage of their Amazon land in forest and which forbade 
intrusions into protected areas--better enforcement of those 
laws was the major cause and better enforcement ultimately 
depends upon political will. It depends upon the top leadership 
of the country taking conservation and good management of 
natural resources seriously.
    People, of course, have a right to develop their natural 
resources and that right is probably clearest when the people 
are poor. Brazil is a modern high-productivity country with a 
population equal to that of France--60 some odd million.
    But the actual total population is 211 million. So Brazil 
has a highly unequal distribution of income and it has a large 
population of poorly educated small farmers and ranchers who 
are eager to take advantage of what they are told is free land 
and better jobs and many large ranchers and farmers eager to 
employ them in defiance of national laws.
    It is especially painful to note that 15 percent of the 
Amazon is reserved by law for Indian tribes and if those laws 
are weakened or not enforced their fate, which is already 
difficult, is likely to get worse.
    The situation of the Brazilian Amazon and neighboring 
countries of the Basin is a complex one that involves balancing 
many competing interests, many of them legitimate.
    It is unlikely to be resolved purely by outside pressures. 
A growth of political will to properly manage their own natural 
resources will be vital.
    Progress over the coming years and decades are most likely 
to be uneven and will sometimes be reversed. But we have to 
try. We have to keep trying.
    U.S. foreign assistance can play an important role in that 
struggle. I recall a study done by my colleagues at the Nature 
Conservancy when I worked there when they said that we needed 
to increase world agricultural production by 100 percent by 
shortly after 2050.
    But to do that by expanding the land under cultivation 
would mean essentially the destruction of the entire natural 
world around the globe.
    But we could do it by raising productivity on existing 
lands. The meaning of this for the Amazon boils down to this. 
Cutting down the Amazon forest is not needed for the future 
agricultural production of the world.
    The existing forest is needed for a host of other benefits 
and we urge the Congress to continue as it has in the past to 
support that goal.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Millan follows:]

    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Sires. Thank you. We will now go to questions. I will 
start by asking: I made a statement before that, from 2004 to 
2012, cattle and soy production in Brazil rose.
    The economy grew. Nearly 30 million Brazilians were lifted 
out of poverty and deforestation rates declined. Can you tell 
me what policies were implemented during that time that were so 
successful?
    Anybody.
    Dr. de Bolle. If I may.
    Mr. Sires. Yes.
    Dr. de Bolle. So the Brazilian government in 2004 
implemented an action plan to reduce deforestation, given that 
it had been on the rise in previous decades.
    This plan was a broad umbrella of many different 
initiatives to fight off deforestation, including through 
monitoring and law enforcement.
    So there was a lot of coordination between two major 
environmental agencies in Brazil: the National Space Agency 
that I have already mentioned and also IBAMA, which is the 
agency responsible for monitoring and for law enforcement.
    These two agencies were working in close cooperation. 
Satellite imagery systems developed with NASA were incorporated 
into these efforts and alongside the monitoring and the law 
enforcement capabilities that were put in place there were also 
other policies.
    So, for example, in 2008, the Brazilian Central Bank 
actually passed a resolution whereby it restricted credit 
greatly to areas where deforestation had been on the rise.
    Rural credit in Brazil is subsidized so a lot of those 
farmers did depend heavily on those credits, and those credits 
were then conditioned on meeting several different 
environmental regulations.
    If these farmers were not in compliance with these 
regulations, they did not get access to the credit.
    There are several academic and empirical studies showing 
that that policy in itself was hugely successful in bringing 
down deforestation in 36 municipalities in the Amazon where 
that had been previously a problem.
    So, the tools, the capabilities, the initiatives--there are 
a number of things that have been tested and tried, some of 
them with great success, some of them perhaps with lesser 
success.
    But, broadly, I would say that Brazil knows what to do. 
There is an issue of political will at the moment.
    Mr. Sires. Yes.
    Dr. Nepstad. Just to add very briefly to that, in our 
summary of those policies that we published in science a few 
years ago, our conclusion is that it was largely a set of 
command and control interventions that were lacking carrots.
    So part of the reason deforestation has been coming up 
beginning in 2012 is that a lot of those measures that were 
referred to my Monica have lost their teeth and there is a lack 
of that positive set of incentives for farmers and State 
governments too that are doing the right thing.
    Mr. Millan. Thank you. I would endorse the comments by 
Monica that it is possible to grow the economy rapidly without 
doing grave damage to the conservation of nature and natural 
resources.
    What it requires is taking a long-term perspective and it 
takes good governance, and a well-managed public authority.
    Mr. Sires. One concern that I have is I see that China is 
now getting involved in buying a lot of the soybean that they 
are not purchasing from us.
    Do you think that is going to make the situation worse 
since now 80 percent of the soybeans made in Brazil basically 
are going to China. Do you think that is going to drive 
deforestation?
    Anybody?
    Dr. Nepstad. I think in the short term, the large-scale 
slaughter of swine in China, because of African fever, is 
really reducing the demand for animal ration but it is 
increasing demand for pork.
    So I think in a few years as that crisis passes there is a 
very high risk that rising demand for soybeans could accelerate 
deforestation.
    A lot of it depends upon whether or not those incentives to 
soy farmers are in place, whether or not the current momentum 
to dismantle the Forest Code that requires 80 percent forest 
cover on soy farms in the Amazon moves forward, and I think 
that will depend upon whether markets give a positive signal 
that they recognize legal compliance with the Forest Code as a 
very high bar of performance on the ground.
    And so I think a lot is in play right now. Brazilian 
farmers have lots of options for markets. But we have to 
remember that a positive market signal including from the U.S.; 
for example, Brazilian beef is seen as a carrot. it is one of 
the carrots that can be mobilized without invoking large flows 
of new finance.
    Mr. Millan. Mr. Chairman, my colleagues on the China desk 
in the old days would not appreciate my bluntness. But I think 
that the massive entry of China into these markets is not a 
good thing.
    We have talked about the importance of good governance. I 
think that as a government the Chinese government simply does 
not take these environmental issues very seriously, 
particularly not when it is outside China.
    So, for example, 10 or 15 years ago they enforced a 
nationwide ban on cutting down any further forest inside China 
and decided to instead cut down in Indonesia.
    Dr. de Bolle. Let me add on, if I may, to my colleagues' 
remarks just to say that the environmental seal for the 
agribusiness sector in Brazil and, in particular, beef but not 
just beef--soybeans as well--has been until recently hugely 
important for exports.
    There is a very large chunk of the sector which is geared 
toward exports and one of the very important roles that the 
international community at large and the United States in 
particular can play is in ensuring that that seal remains as an 
incentive for this sector, or this portion of the sector, to 
continue with its sustainable production practices and thus 
sort of staving off any kind of pressure coming potentially 
from the Chinese.
    Mr. Sires. Thank you.
    Congressman Rooney.
    Mr. Rooney. I would like to thank all three witnesses for 
their testimony. Very thorough.
    I would like to ask Mr. Millan first, and then Dr. Nepstad, 
about the absence of land titles in the Amazon and the economic 
interest of the landowners, being kind of a free enterprise 
kind of guy.
    You know, Mr. Millan mentions that the 70 percent decline 
in deforestation since 2005 may have something to do with 
economic factors and that there is an asymmetry between what 
has happened there, with the decline and enforcement of laws, 
versus what has happened in neighboring countries. I assume you 
mean Paraguay and Bolivia.
    So how does the increase in titling and enforcement of laws 
relate to these statistics and what can that tell us about 
going forward?
    Mr. Millan. Congressman Rooney, I will defer to Monica 
about some of the technical economic aspects here. I think the 
decline of deforestation inside Brazil clearly was driven 
mainly by better enforcement of their laws rather than by 
market factors.
    Across Latin America the lack of clear title to land is a 
terribly grave issue. When I worked at the Nature Conservancy 
we had a program in Bosawas in Nicaragua where we worked for 
five or 6 years and we finally were able to help an Indian 
community there to get what seemed to be a firm title to their 
land.
    I was told laughingly in Guatemala that in the entire 
history of the country only 10 absolute titles to land had ever 
been issued. We are talking about legal systems that function 
very poorly and they are particularly bad at recognizing legal 
title.
    And so the result is that for many people by far the 
easiest way to acquire a large ranch is to steal it, and this 
is a bad thing.
    Some of these countries need to reform their land title 
laws, but then having reformed them they will then need the 
political will to actually carry out the new provision.
    Mr. Rooney. Dr. Nepstad?
    Dr. Nepstad. There has been huge steps forward with law 
enforcement in Brazil under the PPCDAm strategy that Dr. de 
Bolle referred to.
    One of the risks, though, is that in getting to law 
enforcement and one of the fundamental tools of that approach 
is the Rural Environmental Cadastro or Registry--the CAR. Every 
landholder under the new Forest Code of 2012 is required to 
submit their own map of their property. Unfortunately, they 
have come in and there is a lot of overlap. Surprise, surprise.
    But the risk is that in focusing on law enforcement the CAR 
is not a land title. You neglect the very fundamental role of 
land as a guarantee against loans.
    Farmers today in Brazil and the Brazilian Amazon have a 
hard time getting loans with their property as collateral if 
they are mostly forested. Land values increase as forests go 
down.
    So we have this fundamental economic disconnect where if 
you take the EPA social cost of carbon, a hectare of forest, 
that carbon out of the atmosphere is saving the world economy 
$50,000.
    But if I am a landholder and I have that same hectare of 
forest that is worth to me $200, if I clear it, its value 
multiplies by 10, and I cannot use the forest land as 
collateral.
    So I think you have identified a fundamental gap that, as 
we move to--as Brazil moves to a strategy that continues the 
sticks but adds some carrots, getting to land title is a 
crucial piece of that.
    Dr. de Bolle. So I fully agree with Dr. Nepstad's 
assessment and overview of what he has just said about the sort 
of market incentives--economic incentives at play.
    I will just add one thing from the past experience under 
the PPCDAm, the national action plan of 2004. Alongside these 
actions that I mentioned that the Central Bank put in place to 
restrict credit and thereby, you know, just put in place a 
mechanism whereby credit was conditioned to meeting the 
environmental standards that had to be met, there was a clear 
effort to put together a land registry of these areas within 
the Amazon biome.
    So, again, these efforts have been now sort of fallen by 
the wayside. They are things that could, again, be implemented 
and they are things that could, again, be implemented on a much 
larger scale.
    So there is the potential to do these things again and 
there is the potential to achieve the sort of successes that 
were achieved back in the mid-2000's through these policies by 
greatly enlarging what has previously been done.
    Mr. Rooney. Referring to the past policies, it is a pretty 
bad deal when the property value goes up with more 
deforestation. That is kind of working against what we want to 
happen.
    The requirement of 80 percent property staying in 
preservation, first of all, will that be--do you have any 
confidence that will be enforced and will have an impact, and 
if it were impacted how, would that improve that asymmetry 
between value and deforestation?
    Dr. de Bolle. Well, on the 80 percent, the 80 percent has 
over the last few years--correct me if I am wrong--but I think 
over the last few years has already been somewhat softened.
    So, in a way, it is not being enforced as such, including 
because the 80 percent requirement that you do not touch that 
area of your own property to produce and retain its native 
vegetation, is very, very hard to comply with.
    So there has to be something else being done with the 
legislation in agreement overall as to what is best for the 
region in terms of meeting these requirements or even lowering 
these requirements in certain cases.
    As for the current situation, which is that, you know, 
cleared land is worth more than forested land, which basically 
leads to all sorts of speculation as we have been seeing, it is 
a matter of designing the proper regulations and the proper 
incentive structure that makes that equation shift the other 
way.
    So this is what we are looking at. This is what Brazil 
needs. Brazil needs to get the regulations rights so that it 
shifts that balance.
    Mr. Rooney. Thank you.
    Dr. Nepstad. If I could just add to that. Yes, so the 80 
percent is fairly new. Until 1996, 50 percent of the property 
in the Amazon had to remain as forest cover.
    I think one of the most significant actions that could take 
place today would be a public recognition of the importance of 
those private land reserves and recognition of the need to 
compensate farmers who are being asked to forego their legal 
right to clear forests in excess of that 80 percent.
    That is the farmers' current complaint, for example, about 
the Brazilian soy moratorium where 90 percent of the soy buyers 
for the Amazon said that after 2008, if you cleared after that 
date, you cannot--we will not buy your soy grown on that land.
    And the farmers' response is, but wait a minute--I am in 
legal compliance and I have the legal right--what about me. And 
that concern has gotten particularly grave as that same 
approach is under discussion for the Cerrado savanna biome next 
to the Amazon.
    So it is a very big issue.
    Mr. Sires. Thank you.
    Congressman Levin.
    Mr. Levin. Thank you so much, Chairman Sires, for calling 
this really important hearing on short order and getting these 
tremendous witnesses. This is really great and I appreciate all 
of your testimony.
    I want to try to focus on what we can do with U.S. policy 
to be helpful to this very difficult situation.
    Dr. de Bolle, you mention in your testimony that the 
economic benefit of conservation far outweighs the short-term 
gains from cutting down the forest and then setting it ablaze 
after it is been dried out.
    Is there a role for the United States to play in 
encouraging conservation in Brazil and making clear that it is 
more sound economic policy than deforestation? How can we 
really get at that?
    Dr. de Bolle. Well, I think--thank you for that question--I 
think there are a couple of ways. One is through the current 
mechanism that exists, so the Amazon Fund.
    The Amazon Fund is already there. We need to just properly 
redesign--perhaps rethink what its role should be and 
therefore, you know, what kind of financial resources it needs. 
So that kind of financial assistance from the U.S. I think 
would be crucial.
    There are other things in the area of regulation, 
sustainable cattle grazing, land demarcation for indigenous 
lands, and not only that but how do you actually exploit 
indigenous land--some of the things that I have mentioned in my 
oral remarks but are also in my written testimony where the 
U.S. has had ample experience and where that experience can 
certainly be transferred to Brazil.
    So there is a lot of room for technical cooperation on a 
number of these issues.
    Mr. Levin. OK. Great. Let's talk about one area of our 
relations, so just trade. Both President Trump and President 
Bolsonaro seem interested in growing the trade relationship 
between the U.S. and Brazil.
    So how should the U.S. insist on strong environmental 
commitments from Brazil before expanding trade between our 
countries?
    For example, last month BBC reported that Brazil had 
seriously relaxed its enforcement of environmental laws that 
are already on the books.
    And I am quoting here from the BBC account: ``Official data 
from Brazil's environmental agency shows that fines from 
January to the 23d of August dropped almost a third compared 
with the same period of last year, and at the same time the 
number of fires burning in Brazil have increased by 84 
percent,'' and as you all testified, the highest since 2010.
    And I have heard direct testimony from people there saying, 
hey, it is the Wild West now--the president, obviously, is 
giving us the green light to go ahead here.
    So how can the U.S. demand that Brazil commit to stricter 
enforcement of the environmental laws already there and any 
other ideas you all have to how we should use our trading 
relationship with Brazil to preserve the Amazon?
    Dr. de Bolle. Well, I think the U.S. should use its 
leverage on that front. The Brazilian government is greatly 
interested in pursuing some of bigger trade agreement with the 
U.S.
    Whether that becomes an actual, you know, free trade 
agreement or not, that is years in the making. But, certainly, 
closer trade relations, and those closer trade relations, that 
conversation in itself can be used for the U.S. to leverage and 
try to enforce some of these that are not being met.
    So that can certainly be achieved through negotiations, 
which the Brazilian government is very much open to at this 
point.
    Dr. Nepstad. I would just add that I think we are in a very 
volatile time in Brazil where unilateral actions that threaten 
market retaliations, restrictions to trade--I believe they will 
backfire.
    I think it is time for sitting down at the table and 
saying--you know, recognizing that managing a continental-size 
force like the Amazon is a phenomenal task.
    it is very expensive. Brazil did what no one thought was 
possible and now it is time to recognize that and say how we 
can help.
    Part of this is that Brazil is 109th on the ease of doing 
business ranking of the World Bank and the Amazon is much worse 
than that. it is really hard to do investments, to do 
enterprise in the Amazon.
    I think the U.S. has a lot to offer in that sort of 
collaboration through the GDA and other mechanisms of the 
USAID.
    But I think this collaborative approach that says listen, 
we will open to whatever--Amazon beef--if these conditions are 
in place and we see some progress.
    What Norway did in the Amazon Fund is say, you build the 
system--if deforestation comes down the payments will flow, and 
a billion dollars later--a little more than a billion dollars 
later--you know, I think that was a very positive thing to do.
    The way it was structured was probably not right. That 
money did not make it to middle and large-scale farmers; for 
example, and they are wondering why they have been left out. 
So, in short, collaboration, keep the negotiations going and 
weave the conditions into that.
    Mr. Levin. Thank you. My time has expired. But I would just 
observe, Mr. Chairman, that the investment we need to make to 
tackle the grave, grave crisis of climate change for the United 
States, and the world, is so immense it seems that this would 
be penny wise and pound foolish not to work with Brazil very 
intensively on the efforts that our panellists are suggesting.
    Thank you very much.
    Mr. Sires. Thank you, Congressman.
    Congressman Ted Yoho.
    Mr. Yoho. Thank you, Mr. Chairman. And I look forward to 
finding a way forward with what Brazil wants to do with their 
natural resources to find what they want to do with their 
natural resources that is compatible with, I guess, world 
standards.
    How successful are the bans on crops on deforested land by 
other countries have you seen?
    Dr. Nepstad, you were talking about that. what is your 
experience? You have been down in the Amazon a long time.
    Dr. Nepstad. You know, when threats come from the EU, the 
first response is, oh, this is protectionism and they are 
protecting their own markets and that point was made abundantly 
about President Macron's threat to pull out of the EU Mercosur 
trade agreement.
    We have to remember that 60 percent of agricultural exports 
from Brazil go to Asia, and China, as already mentioned, is the 
biggest supporter, and currently Asian markets are not 
demanding sustainability or deforestation-free sourcing.
    And so I think that Asia will move in that direction. Xi 
Jinping is keenly interested in solving climate change and 
keenly interested in investing in the Amazon.
    So something like the Ferrograo railroad is something that 
could buy good will in Brazil, give soy farmers a big break in 
transport if it is structured right, and everyone comes up 
winning.
    Mr. Yoho. I wish I had your confidence on Xi Jinping. I am 
more in line with Mr. Millan.
    In Brazil, we know they are the largest cattle exporter in 
the world. But yet, between 1990 and 2018 Brazil beef 
production increased 139 percent while the areas of cattle 
grazing decreased 15 percent.
    And if you look at it in America, we are producing a third 
more beef with a third less of the land that we use. And 
knowing that, best management practices on our farmlands--we 
know that grasslands, according to a study in UC Davis that is 
titled ``Grasslands More Reliable Carbon Sinks Than Trees.''
    And I am not implying they are more efficient, but they 
store their carbon underground along with other things like 
nitrogens and sulphur and things like that, that when a forest 
burns that is not released into the atmosphere. So, therefore, 
it is sequestered more securely.
    With the best practice management, those are things that I 
think there is a tradeoff. So if you cut down 100 acres of 
rainforest, which is a shame because We have all been there and 
seen that and we know what that biodiversity gives to the world 
and the National Geographic specials, we can offset that by a 
certain amount of rangeland. Would that be true?
    Dr. Nepstad. I think there is tremendous scope for 
improvements in the productivity of cattle, especially in the 
Amazon. You know, 50 kilos of beef per hectare per year is not 
an efficient system.
    And as you say, beef production in--outside of the Amazon 
in Brazil is growing on a shrinking area of pasture. I think 
the net balance on greenhouse gases because of enteric 
fermentation is this very serious issue that can be partially 
compensated by good grazing, partly----
    Mr. Yoho. Let me go back to something that the EPA said. 
The U.S. EPA estimates that direct emissions from the U.S. beef 
industry are only 1.9 percent of the total U.S. greenhouse gas 
emissions.
    So I know there is a lot of emphasis on beef cattle as far 
as greenhouse gas emissions. But I think it is maybe not 
accurate as it could be, and I think we need to look at that 
because for sustainability of protein and food sources we have 
to have that kind of juggling of which is the best way to go.
    And with the world population growing stronger or, you 
know, going to, you know, 9 billion to 10 billion, we have to 
have sustainable agricultural practices, and it goes back to 
best managed practices or practices that we do.
    Going back to the deforestation, there has to be a market 
for those trees--you know, where that lumber is going. What 
country is the biggest importer of illegal deforested areas? 
Does anybody----
    Mr. Millan. Well, the largest market for illegally 
harvested wood is China. Has been for 20 years.
    Mr. Yoho. I was going to say I think it is a five-letter 
name with a C and an A in it.
    Mr. Millan. Oh, yes. Yes. But I do not know if any of it to 
speak of comes from Brazil. Perhaps one of my colleagues has 
better information than I do. A lot of it comes from----
    Mr. Yoho. Dr. de Bolle?
    Mr. Millan [continuing]. Comes from Malaysia. It comes from 
Indonesia. It comes from Burma. It comes from Madagascar or 
Mozambique. But I had not heard about Brazil.
    Dr. de Bolle. Well, I have not either so I have no direct 
answer to that. But one thing that I will say about what 
happens to the trees that are cut down, in order to be able to 
clear the land for pastures--this is a rainforest that we are 
talking about so you need to dry out the rainforest first.
    Mr. Yoho. Right.
    Dr. de Bolle. So the way that that is done is that the 
trees are cut. So the trunks go dry and then after you do that 
you set it ablaze.
    So to a large extent, we are talking about logging 
activities that, yes, take place. Probably some of that goes, 
you know, to the region itself.
    Brazil is a big country so a lot of it probably goes into 
the construction sector in Brazil. it is all very opaque so we 
do not have the data on that to say something, you know.
    Mr. Yoho. Right.
    Dr. de Bolle. But I would say that most of it probably is 
internal and goes to the internal construction sector, and the 
rest of it is just wasted and it is just meant to clear land.
    Mr. Yoho. Right. Thank you. I yield back, Mr. Chairman. 
Thank you.
    Mr. Sires. Congressman Phillips.
    Mr. Phillips. Thank you, Mr. Chairman and Ranking Member 
Rooney and to each of you, our witnesses. Grateful for your 
time today.
    I am hoping to connect some dots, just starting with some 
yes and no questions. The primary drivers of deforestation in 
the Amazon are cattle ranching, logging, and large-scale 
agriculture.
    Is that correct? Each of you. Yes or no answers, if you 
could.
    Mr. Millan. Yes, absolutely.
    Dr. de Bolle. Yes.
    Mr. Millan. President Bolsonaro, before he was elected, 
made statements concerning his intent to pursue development in 
the region. Is that correct?
    Dr. de Bolle. Yes.
    Mr. Millan. Yes.
    Mr. Phillips. Before his election, President Bolsonaro also 
repeatedly pledged to relax environmental regulations and the 
environment, and open up indigenous territories and protected 
areas to mining, agriculture, and large-scale energy projects. 
Is that correct?
    Dr. de Bolle. Yes.
    Dr. Nepstad. Yes.
    Mr. Millan. Yes.
    Mr. Phillips. So do you believe it is a coincidence that 
President Bolsonaro was elected last year with the support of 
Brazil's powerful agriculture lobby? Coincidence or no?
    Mr. Millan. I have not seen any polling data one way or the 
other. I really cannot say that definitively.
    Mr. Phillips. Doctor?
    Dr. Nepstad. He was supported by the farm sector. Yes, 
certainly.
    Dr. de Bolle. He was supported by the farm sector. I, 
however, think that the farm sector now, at least a portion of 
the farm sector, and we have seen that happen, is quite aware--
keenly aware--that they will lose their international standing 
and they will lose their green seal, so to speak, if they 
continue to support the kind of measures that Bolsonaro has 
been putting in place.
    So they are a potential political force in Brazil that can 
be exploited to produce the results that we would like to see 
in terms of, you know, the environmental scale back that we 
have seen under Bolsonaro.
    Mr. Phillips. And, Doctor, can you talk about any efforts 
to that end that might exist right now?
    Dr. de Bolle. So there have been a few. it is not a lot of 
voices as of the moment but there have been a few important 
agribusiness people, in particular one who was a former 
agricultural minister and is one of the largest soybean growers 
in Brazil, Mr. Blairo Maggi, who has made some very important 
remarks regarding how hurtful the scaling back of environmental 
regulations has been so far for Brazil and the potential that 
that could be even more hurtful down the road.
    So there have been voices like that, which are important 
not just from the productive sector side but from the political 
side as well because there are voices that have been in 
government that are starting to see that this can be hugely 
detrimental to their own interests.
    Mr. Phillips. Thank you, Doctor.
    Mr. Millan, we know there are indigenous and local 
communities in Brazil that are living and working sustainable 
in the forest.
    You spoke of laws in place in these communities. Can you 
expand on the current enforcement of these very laws?
    Mr. Millan. My direct experience of the programs there is 
now some years in the past and so I would not want to try to 
comment on the details of recent changes.
    Brazil has hundreds of separate Indian tribes, most of 
which speak a unique language and many of which do not have a 
single member of the tribe who has graduated from the 
equivalent of high school. So these are intensely vulnerable 
communities that desperately need outside help to organize and 
defend their rights.
    Theoretically, under the law they have a lot of rights. But 
actually making them effective against the pressure of illegal 
miners and other invaders of their territory for agriculture or 
otherwise is and has been terribly difficult.
    Mr. Phillips. And the organizations at the forefront of 
assisting them in that effort?
    Mr. Millan. My colleagues?
    Dr. Nepstad. You know, groups like Instituto Socioambiental 
I think are very concerned with the wave of impunity I think 
that is present in the Amazon right now, an impunity growing 
out of frustration for the lack of positive incentives and 
recognition for past efforts and successes.
    So it is a very volatile moment and there are signs that 
deforestation patches are increasing within protected areas and 
indigenous territories.
    Mr. Phillips. OK. President Trump has characterized 
President Bolsonaro as, quote, ``a like-minded leader,'' end 
quote.
    he has announced several agreements to bolster economic and 
security ties with Brazil and also opposed the aid package 
course for the fires during the G-7 and instead publicly 
praised Bolsonaro for, quote, ``working very hard on the Amazon 
fires and in all respects doing a great job for the people of 
Brazil,'' end quote.
    Do you believe, each of you, considering these statements 
that President Trump is helping or hurting the crisis unfolding 
in the Amazon? Helping or hurting?
    Dr. de Bolle. At the moment, not helping.
    Mr. Phillips. Doctor?
    Dr. Nepstad. I think that is--I sense that you want really 
fast questions and I think there is a lot of nuance to this 
question.
    As I said before, I think unilateral sort of threats of 
retaliation against Brazil right now could backfire and I do 
not support a lot of what is going on in Brazil right now.
    But I do know the roots of it and I think a positive signal 
on trade from the United States, for example, could go a long 
way.
    Mr. Phillips. Thank you, Doctor. And Mr. Millan?
    Mr. Millan. And I would suggest that as we go forward on 
these issues, which, as I commented in my remarks, are 
difficult and complex, and they involve not just legitimate 
interests against illegitimate ones but direct competitions 
between interests that are inherently legitimate in and of 
themselves.
    These are terribly difficult issues that are going to be--
are not going to be resolved this year or next year or in 5 
years.
    I think that to the extent that private groups can be 
involved not only as investors but also as consumers and as 
associations of consumers, you see this a lot in Europe and you 
see it to a certain extent here already in the United States.
    That brings another interesting player to the table because 
now it is not just a big country appearing to bully a 
developing world country; it is groups of hundreds of thousands 
or potentially millions of consumers saying, we will not buy 
your stuff if you do bad things in order to create it.
    And striking that balance, of course, is always going to be 
complicated. But I think that sort of action has a lot of 
potential.
    Mr. Phillips. Thank you, all. I yield back.
    Mr. Sires. Thank you.
    Congressman Castro.
    Mr. Castro. Thank you, Chairman. And I apologize that I 
came in late and missed some of the conversation. I was at 
another meeting. But I think everybody would agree that the 
Amazon forest is important to the health of the region and the 
health of the world.
    And I guess my question is in your own assessment how 
strong are the efforts of Bolsonaro's government to protect the 
Amazon? Do you believe that he and his administration are doing 
everything they can to protect the Amazon?
    Dr. de Bolle. As I submitted in my written testimony and as 
I mentioned in my oral remarks, the answer to that is no. He 
has scaled back the capabilities of the environmental agencies 
in Brazil.
    He has scaled back monitoring efforts. He has scaled back 
law enforcement. He has spoken specifically about, you know, 
using the Amazon's resources and not necessarily in a 
sustainable way. He has not underscored sustainability in any 
of his remarks.
    So that really has emboldened a lot of predatory behavior 
in the rainforest more recently. Does he have the tools to do 
what he needs to do?
    Does he have the capabilities within these agencies and 
within ministries in Brazil and also going from past experience 
in Brazil in terms of what has been done? The answer to that is 
yes. But the ultimate question here is a question of political 
will.
    Mr. Castro. Sure. Do either of you significantly disagree 
with that answer? Or let me ask it this way. Do you believe 
that he has doing and his administration are doing what they 
should to protect the Amazon?
    Dr. Nepstad. I think more can be done, certainly. I think 
there are threats. I would agree with Dr. de Bolle on that, and 
there is been some scaling back.
    I think Minister Tereza Cristina is in a pivotal position 
right now. Under her ministry there will be the climate change 
agenda.
    Brazil is sitting on these billions of tons of emissions 
reductions that have never been monetized. I think just sending 
the signal that some of those emissions reductions are going to 
be worth something would be hugely, hugely influential right 
now.
    And so I feel like Brazil is poised for some positive 
signals from the United States that what they have done 
historically is recognized and we are moving into a new phase 
that is more about incentives than about punishment.
    Mr. Castro. Sir?
    Mr. Millan. I would not take issue with the comments of my 
colleagues and I would particularly recognize the value of Dr. 
Nepstad's comment just now about the potential value of the 
stored carbon and the avoided emissions.
    One of the difficulties of trying to value these intact 
forest is that the benefits to the extent that they are real, 
and they are real, are global. But the costs of not developing 
are often perceived as local.
    Mr. Castro. Sure.
    Mr. Millan. And so the world needs to find better ways to 
monetize that global value so that some of the benefits flow 
through to local people and local institutions. If that can be 
done, you would then create a powerful local incentive not to 
cut down the forest.
    Mr. Castro. OK. Part of the reason that I asked that 
question is because I do not believe that the government there 
is doing everything they can to protect the Amazon.
    I also do not have confidence in President Bolsonaro's 
administration right now because he has demonstrated very 
erratic behavior: turning down that money from France, getting 
into a fight with the French president about comments that were 
made about the French president's wife.
    So what leverage do concerned nations have to make sure 
that the Amazon is protected? Those could be carrots or those 
could be sticks.
    So I ask you in the array of carrots and sticks, what do 
you recommend? I know you just spoke on the emissions issue. Is 
there something else?
    Dr. Nepstad. California Air Resources Board on the 19th of 
September will vote upon the tropical forest standard.
    Under construction for 10 years, it would be a way of 
recognizing the role of State governments in the Brazilian 
Amazon and their role in reducing deforestation.
    That sort of thing will send a very positive signal to 
those States. They were part of the construction of that 
standard and that will make it easier for them to attract 
investors including climate finance.
    So I think there are a lot of things that could happen that 
provide those signals to Brazil that we are moving into an era 
of collaboration. Agribusiness--you know, Bolsonaro threatened 
to pull out of the Paris Agreement.
    He did not do it because he heard from his own constituents 
that that was a bad idea. He was going to eliminate the 
Ministry of Environment. He did not do it because his own----
    Mr. Castro. Well, he has not done it in year one, right? Or 
year two. You know, he has got more years----
    Dr. Nepstad. Well, I think he has been very loud and clear 
as referred to by Dr. de Bolle that his own constituents are 
saying, wait a minute--we want the forest agenda intact because 
otherwise we are going to lose a lot of markets. We are going 
to lose a lot of investors.
    So I think that is really the way forward. You know, what 
could the U.S. Government do to create a robust mechanism for 
compensating emissions reductions? You know, it does not seem 
very viable in the current political environment.
    But that, in the end, I think is what is going to happen. 
You know, that is going to grow. There are 30 companies in 
California right now that want to become climate neutral and 
they want tropical forest offsets.
    Those will be voluntary in the first step. Eventually we 
will need regulated markets to give that whole endeavor greater 
volume and greater scale.
    Mr. Castro. My time is up. I know that she had wanted to 
make one comment.
    Dr. de Bolle. Just wanted to add one thing. On 
environmental compensation, which is a key incentive, this is 
contemplated under Brazil's 2012 Forest Code. It just is 
lacking in regulation.
    So it has not properly been regulated. So that is one thing 
that should advance, and collaboration with some moral suasion 
could go a long way toward getting that done.
    And second, once you do have that mechanism working, a lot 
of the financial resources could come from a much enlarged 
Amazon Fund. So just to get that point in.
    Mr. Castro. Thank you.
    Mr. Sires. Thank you.
    Congressman Vargas.
    Mr. Vargas. Thank you very much, Mr. Chairman, and I thank 
the ranking member for the opportunity.
    When I was in law school I had a great professor named 
Abram Chayes, and Abram Chayes was one of the best and 
brightest. He was one of Kennedy's guys in the State 
Department, and I took a class with him called International 
Environmental Law, and this is back when we were really worried 
about the ozone layers at the Poles, as we should have been and 
continue to be worried about.
    And anyway, he was just a master professor, and at one 
point he told this story and he said there is a person that 
lives in the Amazon and this gentleman has a gigantic tree in 
his front yard and it is a thousand years old and it is 
hundreds of feet tall and is absolutely magnificent.
    It does everything a tree ought to do for oxygen. So what 
should that gentleman do as an environmentalist? And, you know, 
of course, having had him for a couple other classes and 
knowing that he was a very progressive thinker we thought, 
well, you know, preserve the trees.
    He goes, no, he ought to cut it down and make it into 
lumber, because being an environmentalist first means feeding 
his family. He goes, but, of course, that is the wrong result.
    He goes, that is the absolutely wrong result. We ought to 
pay him for his tree so he does not cut down the tree because 
we are the ones in the developed world--that We have already 
done so much damage to the environment we ought to pay him for 
his tree.
    And, you know, there is a lot to that, I think. I mean, we 
should participate in a much stronger way in making sure that 
this forest does not get destroyed because it does benefit all 
of us.
    We do not want to see that magnificent tree cut down. In 
fact, we do not want to see any of them. I have had the 
opportunity to go to the Amazon before and one of the things 
that is the most amazing to me, and I wish young people would 
understand this, when you have clear cutting, when you have 
burning, all that is terrible.
    But the worst terror out there is when they burn the forest 
to plant cocaine, because when they do that often times you get 
this moss, and this moss does not allow the trees to pop 
through it.
    We went over and actually stopped in some places where they 
had grown cocaine 20 years ago and the forest had not popped 
through yet because of the thickness of the awful moss. It was 
unbelievable.
    But anyway, I think what is going on there right now is 
reprehensible and we have to have more of a hand in working 
this out as a global community.
    Doctor, I would like to ask you about that. I mean, you 
know, what about this thought? I mean, you know, Dr. Nepstad 
said that, you know, there are these other companies that are 
involved and California wants to be, you know, neutral in the 
sense of its climate impact.
    I mean, shouldn't we be more aggressive doing this?
    Dr. de Bolle. Well, certainly. But I think the way that--
and I will echo something that Dr. Nepstad made here on a 
number of occasions, which I think is crucial--the way I think 
to work this issue out, even though what is being done right 
now by the Bolsonaro administration is reprehensible----
    Mr. Vargas. It is reprehensible.
    Ms. de Bolle [continuing]. The way to work it out is 
through collaboration.
    Mr. Vargas. Yes.
    Dr. de Bolle. So it cannot be through sort of hand 
wringing. It cannot be through an approach where, you know, 
another government--any government--I mean, we saw that 
backfire greatly with France--it cannot be through another 
government trying to impose its views on a sovereign nation, 
which is the case of Brazil.
    So there is great scope right now for collaboration between 
Brazil and the U.S. And so what I think our role should be is 
putting pressure so that collaboration actually materializes. 
that is how I see it.
    Mr. Vargas. And I agree, and how do we do that then? How do 
we do that?
    Mr. Millan. Well, we need to find better ways of bringing 
together the long-term interests of the globe, including our 
own country, and the short-term interest of the developing 
world countries and the mainly poor people who live in their 
rural areas.
    Your story about the tree reminds me of something that 
happened here in the United States about 10 or 15 years ago. 
There was a forest researcher who was working in the 
bristlecone pines up in the Sierra Nevada Mountains of 
California.
    And he drilled a hole in an ancient tree in order to count 
the tree rings and his drill bit got stuck, and he asked 
permission of the forest rangers, which they rather stupidly 
gave him, and then he cut down the bristlecone pine tree in 
order to retrieve his drill bit.
    So he cut down a 4,000-year-old tree in order to retrieve a 
$20 drill bit. I guess the essence of this is that it is not 
just Brazilian farmers who----
    [Laughter.]
    Mr. Vargas. Yes. I agree that was absolutely a terrible 
thing to do. But, again, I appreciate--we do have to be more 
firm, I believe, in what is happening in the Amazon is 
reprehensible.
    And I hope the people that do use drugs also understand the 
damage they do to the forest because I know we just blame 
farmers, we blame--it is also people that use cocaine.
    I mean, I was absolutely shocked when I saw the damage that 
cocaine has done to the Amazon and our young people and maybe 
not so young people that use cocaine also are damaging the 
Amazon, damaging the air that we breathe.
    Mr. Chairman, I know my time has expired. I yield back.
    Mr. Sires. Thank you.
    We just have a couple more questions. I am curious about 
something. How large is the U.S. business investment in the 
Amazon--American business people? Is it a large portion? Are 
they very involved?
    Do we have--I am trying to get at the fact that maybe 
through the U.S. business people we can encourage these people 
to do some good things.
    Dr. Nepstad. Yes, I will take a shot at that.
    You know, currently, the Amazon is seen as one of the most 
risky investments around in the Americas, at least, and it is--
I mentioned the ease of doing business index but it is more 
than that.
    If you do business in the Amazon there is a good chance 
that you're going to get attacked, and there is a lot of 
efforts right now by advocacy campaigns' campaigners to do 
that--to create reputational risk for your association with 
deforestation.
    And I think that those campaigns have been very important. 
they have brought companies and investors to the table, to 
accountability.
    So we have all of these companies and investors ready to do 
something and the question is how to create those safe pathways 
to invest, to partner with those local farm sectors and 
governments.
    And so I think the concept of these really safe zones--if 
you have got a Mato Grosso that is offered to reduce emissions 
by 4 billion tons by 2030, which is true--announced in Paris--
let's rally around that government and those farm sectors and 
make sure that we have a development model in place for that 
gigantic State, which is Brazil's biggest soy producer, biggest 
cattle producer, so that they can win.
    And that is what is missing right now. We have an 
environment where the responsible investors in companies back 
away and there are plenty of U.S.--plenty of U.S. money and 
companies working in the Amazon.
    But right now it is a sense of how do we do it without 
getting blasted or without, you know, becoming a headline? And 
so I think we need to make those safe pathways.
    Dr. de Bolle. Let me just add to that by saying that 
without the Federal Government's involvement and without a 
clear strategy by the Federal Government that completely goes 
back on our or backtracks on what they have been doing so far, 
it is very hard to see a scenario like that actually 
materializing.
    So the potential is there. But, again, I come back to my 
basic point. You need the political will of the Federal 
Government to be able to get these initiatives going.
    Mr. Millan. I would agree with that.
    Mr. Sires. Thank you.
    My colleague now has a question.
    Mr. Rooney. I will ask one more. I mean, there is been a 
lot of facets or matrices put on the idea of solving the 
asymmetries of what is positive but what is not positive, and 
Congressman Castro's carrots and sticks was one analogy you 
just talked about--Mato Grosso, and we talked about some of the 
asymmetry of a guy that makes more money by tearing up the land 
and deforesting it than he ever wood keeping it.
    So I guess I got to thinking, when Ted Yoho mentioned about 
ag, is there any--let me go back to Mr. Millan's comment here 
in his testimony that you cannot--basically you cannot meet the 
needs of the world's food by continuing to plow up more land. 
We have to have higher productivity. Is that right?
    Mr. Millan. Sir, I do not think I said that. If I did, I 
erred.
    Mr. Rooney. Raising the production of existing lands.
    Mr. Millan. Yes. In other words, we need to raise the 
production of existing lands a lot.
    Mr. Rooney. Right.
    Mr. Millan. And if we do that, we do not need to cut down 
the forests.
    Mr. Rooney. that is what I meant. that is exactly right.
    Mr. Millan. that is the keeper. Yes.
    Mr. Rooney. And that gets you to--leads you to things like 
maybe different crops. You know, when Yoho's talking about how 
many hectares it takes to make a certain quantity of beef, 
well, that is a lot less in Mato Grosso.
    it is a lot less in Oklahoma or Texas than it is in the 
Amazon. The Amazon's a terrible place to grow beef and there is 
other crops like that. I cannot imagine growing soybeans in the 
Amazon.
    But what--are there other things that can be done in the 
spirit of positive replacement of opportunity that would be 
better that we do not know about?
    Dr. Nepstad. there is tremendous interest in the Amazon 
today and in the national government for fish--increasing fish 
production. That is managed wild fisheries of the Amazon flood 
plain.
    These are community-based management systems and fish 
farming. And so you have a place like Rondonia State is 
exploding with fish production and it needs technical support.
    It needs markets. It needs international markets. But that 
for me is getting back to the traditional cuisine of the 
Amazon. The Amazonians traditionally eat fish protein----
    Mr. Rooney. Pirarucu.
    Dr. Nepstad. I'm sorry?
    Mr. Rooney. Pirarucu looks like tarpon.
    Dr. Nepstad. Pirarucu, you can buy in Whole Foods around 
here.
    Mr. Rooney. Looks like a tarpon, tastes like a snapper.
    Dr. Nepstad. And so there is all of these amazing recipes, 
culinary--but just high volumes of high quality fish, and the 
great thing is farmers want it large scale. Soy farmers want 
it. Small-scale farmers want it.
    Some indigenous communities are doing fish farming and it 
is the sort of thing where you got 20 percent--20 times more 
production per hectare than beef and it is not excluding 
anyone. it is giving them supplemental income.
    I think that is an example of the sort of thing that could 
move forward very rapidly and be a win-win as a development 
agenda.
    Mr. Rooney. Great.
    Mr. Millan. A U.S. foreign assistance program, which 
married titling of land for rural farmers, raising productivity 
of that land through the use of hybrid crops and modern 
fertilizers and insecticides, could have tremendous relevance 
to 20 or 30 countries around the world, not just to Brazil.
    It had enormous potential, and one way or another something 
similar is going to be done or else they are going to cut down 
all the forests.
    Dr. de Bolle. Just coming back to my point on political 
will, this is exactly where we can get political will because 
these sorts of sustainable fish farming activities and things 
of that--and other sustainable farming activities that may 
happen in the Amazon or that are currently happening in the 
Amazon would serve toward reducing poverty rates and inequality 
rates.
    I mean, we are talking about a region of the country where 
inequality and poverty are at their highest. These are the most 
naturally rich in resources States of Brazil.
    But they are also the most impoverished. So there should be 
great political will just from that fact alone.
    Mr. Rooney. Thank you.
    Mr. Sires. Well, thank you all for being here today for 
this important hearing. I urge my colleagues to remain focused 
on what is happening in the Amazon.
    I hope this hearing will be the beginning of an ongoing 
conversation about how the U.S. Congress can help preserve the 
Amazon rainforest for generations to come. I thank the 
witnesses and all the members who have been here today.
    With that, the committee is adjourned.
    [Whereupon, at 11:20 a.m., the committee was adjourned.]

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