 Claudia, in the last few months, there's been a lot of international attention focused on what are perceived to be possible changes in the Brazilian forest code or how it's applied. Could you, in general terms, tell us what the issues are and what you see as the process that's unfolding in Brazil? Sure. Let me start by saying I think it's really interesting when at certain moments in time the international community starts sort of paying attention to the forest code because in Brazil at least it's been under heavy debate for the last 15 years non-stop. And so a little bit of the history there is that the forest code came into being already in the 1930s and I think is one of the most progressive pieces of land use legislation in the world. It's the only country that puts any kind of requirement on private landowners to keep a portion of their land in a private forest reserve. So there are essentially two components. One are these sort of permanent protection areas which typically are on mountaintops or slopes or especially around riparian zones. And then there's this legal reserve as it's called which the size of that legal reserves in terms of the percent of the individual property depends on what biome in Brazil it's located in as defined by Institute of Geography and Statistics. And so debate over the last 15 and then before that even years has been changing the percentage especially in the Amazon forest biome or even in the legal Amazon or even Savannah areas. So in the Amazon forest biome in 1996 they changed the percentage that was required from 50% of the land holding to 80%. And in part that was in response to a huge spike in deforestation numbers, the highest numbers until 2004 that occurred in 1995. And at that point I think the government was under severe pressure internationally to do something about deforestation rates and the PPG-7 project was developed at that time and a number of other initiatives and one of the things that came out of that was this change in the forest code. And the first five years of its life, this new change, it never actually became law. It was an executive order that continually was renewed every 30 days or so for this period of four to five years. And so landowners themselves never really saw it as something that they should necessarily follow. I mean there was a lot of uncertainty because there was always this possibility that it might be overturned, that it might not actually become law. Although I think many of the environmental groups really considered it to be, well this was the law and this is the way it should be done. One big problem from the standpoint of the landowners has been there was no grandfather clause in the sense that if you were at least legal, let's say in 1995 you still had 50% or more of your legal reserve, you didn't then sort of get to continue to be counted as a legal landholder if you actually had less than 80% as of the time that that executive order was signed in 1996. So in some research I've done in one of the highest soy producing regions in the Amazon, 25% of landowners became criminals overnight when this executive order was signed. And if you think about that, I mean these people who really see themselves as in many cases law abiding citizens who are really trying to sort of help Brazil become this big economic power, they see themselves as part of the big engine of economic growth in Brazil and then they're told no no sorry you're criminals. And on top of that they're also told well you can only use 20% of your land. And I think very often again to come back to the international attention, I think when I first heard about the policy I think when a lot of other people first hear about it they say wow that is so incredible 80% of land being protected on private lands. Well if you try to do that in Europe or in the United States or in Canada or Australia I can't imagine what kind of firestorm you would have on your hands from ranchers and farmers who simply wouldn't stand for that especially without any kind of compensation and that's really been the situation. And so in some senses I'm not just trying to defend landowners here because certainly there does need to be regulation and I mean there are many aspects of this law that really are great and very innovative but I think that it's important to see why there has been so much debate. Anyway so recently I think there's been a lot of strength gathering behind landowner lobbyist proposals to make major changes in the forest code and not just reducing the percent of the legal reserve but all kinds of issues about legalizing what is currently considered to be a land that's not being legally managed and that's where a lot of the concern comes from. And I think internationally there's probably a lot of concern because it sounds like it's going to lead to more deforestation. That may or may not be the case. I tend to think that it's less likely to lead to more deforestation than it is to simply legalize what has already been cleared and make it and not require those lands to be restored and that for me I think is one of the big issues and so we have been working a lot on trying to figure out what kind of mechanisms could you use to try to restore some lands make it less onerous both in terms of labor and costs for landowners which is not something that was ever included in these original changes. Do you see red as playing a role in that and some of these changes that you think might actually be necessary or helpful in this process? I mean definitely I think if some of this financing could come in the changes that landowners need to implement on their lands have everything to do with red and have everything to do with needing some kind of funding source in order to whether it's growing seedlings in a nursery or not planting them and monitoring them because they have to restore riparian land or this legal reserve or if it's just saying hey we know you have a high opportunity cost in this region this is a really productive region for soy the cost of land there or the value of land is about $2,000 per hectare versus $500 per hectare for forest land so for them there's a huge opportunity cost I think it could really help to offset it. The thing that's of course difficult is red or whatever it turns out to be is taking a long time to get anywhere where it could actually move some of those benefits to these land users you know and so I think that's across the board not just in Brazil and certainly not just with landholders and I think it's one of the major issues that governments and sub-national governments are trying to deal with is how to actually develop mechanisms for benefit sharing and then also where to get that funding in. I think what Brazil has done at least in my view probably better than many other nations is really try to think about land use planning and the forest code is a part of that and then there's these you know legally required zoning plans that each state and the Amazon has to develop and I think those are a really important model for thinking about how red or low carbon development plans really get implemented and I think that's something that especially on the scale that Brazil is working and you know it's not a Costa Rica and Costa Rica has done many wonderful things but you know we're talking about a country the size of well almost the entire United States and that they're really trying to develop these zoning plans and strategies and the forest code sort of comes into that. I think it's very instructive just in terms of the kind of debate and where the pushback has been you know how do you make it economically viable for people to carry out these agricultural activities whatever they are at the same time that you try to preserve hydrological and climate function in the region and you know that's I think the thing that for me we really need to focus on is getting that balance so in that sense I'm not at all advocating that the forest code you know be overturned or anything like that but I do think that you know there needs to be sort of a very constructive debate about how to make sure that this climate doesn't get completely altered. You gave us a really profound sort of idea of the depth the historical context and all of the forest code and you mentioned in a few cases a bit about why Brazil may be different maybe somewhat exceptional partly scale but other issues as well so do you think there are any broad lessons that other areas perhaps other large tropical countries might take from this particular experience of the forest code and the flexibility or non-flexibility that might be involved? I would like to say that you know yes the forest code is working and therefore it's a wonderful example for other countries that also have these large private land holdings or concessions let's say with large commodity production unfortunately I don't think that we can say that it's entirely you know working the way it ought to and so I think maybe one of the bigger lessons is thinking about when is the window of opportunity for implementing it and how extreme can you be and I think you know we often characterize in our discussions in our group forest code is being a little bit the perfect being the enemy of the good in the sense that I think that 80% maybe went a little bit too far and you know there are certainly sectors of the environmental movement that would disagree with that but I think that many landowners have been amenable to a 50% legal reserve and sort of felt like that was something that they could live with that it was still economically viable to do their work and so I think if you try to think about what this means for other regions it's a question of really trying to get the analysis right and get all those perspectives in there that it's not just about preserving forest but you are already dealing with landscapes that are occupied by people and I think that's the case for many countries we're not talking about vast areas that are uninhabited and that aren't being used by people but in fact they are areas that are being used whether it's at a small scale because they're small holder populations or if they're indigenous populations who are using it or if they're these large companies or individuals who are doing commodity farming or ranching to really consider the perspectives of all those stakeholders and what their cost benefit analysis is as they make their land use choices one problem with the forest code has been that it's a real command and control policy it's extremely dependent on an enforcement component and that there's just not the capacity for that Brazil has extremely high social capital very talented people and still they don't have the financial and the human resources to really go out there and apply fines to every land holder who has cut illegally or cut in excess of what he's allowed to the judicial system isn't always capable or willing in some cases to process those cases to the owners they really consider the cost or the amount of the fine is a cost of doing business so for them the amount of profit that they can pull off the land if they clear more than they're allowed to is still much more than the amount of the fine even if they're willing to pay that fine and many of them aren't because they feel like the whole the whole law doesn't make sense or maybe it won't hold and so I'm not going to do this now the law is going to change and I will then be legal again I think one thing that maybe I haven't talked about and I think that's important to consider is that you have this great diversity in size of land holdings in Brazil so this 80% until this new change takes place applies to all land holdings whether they're the 100 hectare average smallholder settlement lot that's distributed by the government or it's these 82,000 100,000 hectare mega ranches that are especially located in Mato Grosso state where most of the soy production takes place and these are sort of you go to the Midwestern corn belt in the United States and these ranches will put those to shame there if you say we've got 50% of that land holding has forest that's 40,000 hectares of forest that's not something to sneeze at that's not something where you should say that they're not protecting forest