Data suggests an Amazon fire season worse than 2019's, which shocked the world. So what are international investors doing about it?

This year’s Amazon fire season is already breaking records. In July, there were 27% more fires in Brazil’s portion of the world's largest tropical rainforest than last year, when images of trees ablaze shocked the world. And the numbers are still growing.

The fires became an unwelcome hallmark of the administration of Jair Bolsonaro, Brazil’s far-right president who took office in 2019. Though Brazil has invested millions in fighting fires in the Amazon since last year, the root of the problem remains intact.

Fires typically follow deforestation in the Amazon, a problem Bolsonaro’s administration has resisted fighting. Bolsonaro refused to strengthen the country’s environmental protection agencies as increasingly large parts of the forest were converted to pasture and illegal mining sites.

The fire season comes as Brazil’s soy and beef exports are booming, raising concerns among foreign investors and business leaders that they’re profiting from the Amazon demise.

And Brazil is struggling to change the narrative around the crisis. “This story that the Amazon is burning is a lie,” president Bolsonaro said in a recent meeting. This year’s season, however, intensifies the focus on Brazil’s troubling environmental problems yet again.

So what, if anything, has changed?

What’s different about the Amazon fire season this year?

The main difference this year is that there is more wood to burn.

When political and business leaders across the globe expressed outrage at Brazil’s inability to stop the Amazon burning, former army captain Bolsonaro acted the only way he knew how: sending in the military.

Data suggests the military helped curb fires in the ensuing months, but they left their work incomplete. They didn’t stop deforestation, which kept rising, and didn’t hold the perpetrators accountable. That means that this year, farmers and land grabbers are free to burn what they meant to last year, plus all the trees they’ve knocked down since.

Research from the Amazon’s Research Institute, Ipam, calculates that roughly 3,500 square miles of destroyed forest have been left to burn as of August this year. If only 60% goes up in flames, this year’s season will be as bad as last year’s. If all of it burns, however, it could also lead to “an unprecedented health calamity” in the region by adding to the effects of Covid-19, Ipam wrote.

Did the world's outrage last year make a difference?

Yes, but there have been no significant changes in policy or in farmers’ profit margins.

Investors from Brazil and abroad reacted strongly to the government’s inability to control deforestation and fires. Links between environmental destruction and the supply chains of major agribusiness players have also been called into question.

Brazil banned fires in the Amazon after a group of global investors said it was concerned about the country’s environmental record. Yet inaction led Nordea Asset Management, the investment arm of Europe’s largest financial services group, to drop JBS, the world’s largest meat packer in July. HSBC also warned investors of the risk in investing in JBS, arguing the company was unable to monitor its own supply chain for connections to illegal activity. China’s Cofco, one of the biggest trading companies in Brazil, promised to make its soy supply chain fully traceable by 2023.

Still, there has been little sign that investors have taken significant amounts of money out of Brazil because of environmental issues, and exports of agricultural products are booming, even as their links to illegal deforestation become apparent.

While the Chinese press acknowledged the increase in deforestation in the Amazon in recent months, Chinese investors and business leaders haven’t followed US and European firms’ threats to divest their Brazilian assets if the issue isn’t effectively addressed.

Action from China could have major consequences, researchers say, as the Brazilian meat industry’s dependence on Chinese buyers continues to grow. Many farmers believe that if European firms boycott them, they can simply offset their losses by turning to China.

Chinese officials have so far avoided taking a stand against surging deforestation in Brazil. During last year’s fire season, the number two-ranking diplomat at the Chinese embassy in Brazil praised local environmental laws. And at a press conference earlier this year, Chinese diplomats ignored journalists’ attempts to elicit comments on deforestation in the Amazon.

Suely Araújo, who was head of Brazil's main environmental agency, Ibama, until last year, said international pressure in the late 1990’s was behind the country’s most important law against environmental crimes.

”If there is one way this government will improve its policies in this area is through international pressure,” she said.

What has the government done differently since last year?

The government has put the military in charge of protecting the Amazon, a move that environmentalists say is a lot more expensive and a lot less effective than empowering environmental agencies.

The government spends roughly 60 million BRL (US$11 million) per month on its Amazon military task force, only a little less than Ibama’s annual budget for law enforcement.

But throwing money at the problem hasn’t worked so far. Deforestation has kept rising and fewer environmental crimes have been reported. The Brazilian government has also repeatedly punished Ibama agents for doing their jobs — once firing the head of law enforcement after a successful massive operation against illegal mining.

“Militarising deforestation control is not efficient,” Araújo said. ”They don’t have the expertise.”

This article was first published on China Dialogue, under a creative Commons license.