Promotion of PES for deforestation-free supply chains in Brazil


Brazil is renowned for its extraordinary biodiverse and vast forested areas; it has the second-largest forest area in the world. Brazil’s forests represent a global public good in terms of their biodiversity and their role as carbon sinks.


However, deforestation rates have surged in recent years, particularly in the Amazon rainforest, with a loss of 19% over the last 40 years. This destruction not only poses severe ecosystem services degradation, leading to water scarcity, soil erosion and desertification, reduced air purification, biodiversity loss and carbon emissions, but also threatens the well-being of rural communities, who depend on forest ecosystems for their livelihoods.

To address these serious environmental degradation and development challenges, there is a need for alternative development models that protect forest ecosystems and provide livelihood opportunities that increase the well-being of the population. The Amazon and Atlantic Non-timber forest products (NTFP), which do not require the harvesting of trees, offer a potential source of income for rural communities while promoting forest conservation and ecosystem services. However, traditional and rural communities face many barriers to making a living from NTFP and market prices do not reward communities sufficiently for NTFPs, making them unable to compete with more lucrative yet unsustainable activities, thus, further exacerbating deforestation.


The CompensACTION Project in Brazil aims to implement a PES pilot fund with the objective of promoting forest conservation by marginalised communities through a market mechanism based on deforestation-free value chains. By offering relatively higher returns for NTFP value chains, PES can reduce the incentives for communities to engage in unsustainable activities that contribute to deforestation – especially cattle ranching, soy production, logging and wildcat gold mining. This pilot will therefore assess the potential of PES to:

  1. Enable local communities to diversify their livelihoods through benefits for the conservation of the natural environment and delivered ecosystem services
  2. Increase the uptake of deforestation-free sources of income by NTFP production
  3. Foster access for local communities to NTFP markets

Estimated Impact

The estimated target group at this preliminary stage is at least 1,500 families (about 6,000 persons) over an implementation period of 4 years (2024-2027). Of those receiving PES, at least 50% will be women and a total of at least 10 000 ha will be brought under sustainable forest management activities.

families in the target group
at least
of those receiving PES will be woman
at least
0 ha
under sustainable forest management activities


To this end, IFAD will collaborate with an NGO that has the capacity to address the complex socio-ecological contexts and the agility to constantly adapt to changing circumstances to implement the PES pilot fund. The NGO will: 1) identify relevant ecosystem services, 2) articulate the design of the PES arrangement, 3) coordinate the participation of ecosystem service providers, 4) provide operational and financial management, 5) undertake monitoring and evaluation, verification and reporting, and 6) establish the ground-work for a sustainable modality of PES which could be disseminated and up-scaled.

In order to ensure the sustainability of the PES fund, the structure will be designed to receive both private and public funding. The PES pilot will ensure inclusive and transparent governance, financial accounting, ownership, and active participation of beneficiaries throughout the project cycle (including in M&E activities).

How To Get Involved?

CompensACTION is an open space to collaborate on the implementation of projects and to provide exchange on compensation mechanisms. If you are interested to connect, please contact us at