Objective
Economic incentive: restoring degraded pastures
Description
In 2023, the Brazilian government launched Novo Brasil, the Ecological Transformation Plan, a national strategy aimed at aligning economic policy, industrial development, environmental sustainability, and financial policy. This plan aims to position Brazil as a global climate leader by integrating climate objectives into the country's development strategy, built around three main pillars: sustainable finance, green industrial development, and the green transition. One of the key initiatives stemming from this strategy is Eco Invest Brasil, a program created in 2024 to mobilize private capital for environmentally sustainable investments. Among its priority areas is the restoration of degraded pastures under the government's Caminho Verde (Green Way) initiative, which aims to increase sustainable agricultural production while reducing deforestation pressure. This research examines how the Brazilian government combines two procedural instruments of public policy to accelerate the implementation of this strategy through auctions. More specifically, it analyzes the interaction between an organizational procedural instrument, which establishes the institutional frameworks and coordination mechanisms necessary for mobilizing public and private actors, and a financial procedural instrument, which facilitates access to financing and promotes risk reduction through blended finance mechanisms during the second Eco Invest auction. Rather than directly financing pasture restoration, these Eco Invest procedural instruments are designed to shape the decision-making environment, coordinate stakeholders, and reduce barriers to private and international investment. In doing so, they aim to accelerate the flow of private capital toward the restoration of degraded pastures, while simultaneously reconfiguring the governance through which the Caminho Verde initiative is financed and implemented.
Country
Brazil
Ladder
Local
Nature
Financial
In which law/program is this instrument included?
Ecoinvest Program
Eco Invest Brasil and its role as a mixed financing mechanism
The second auction demonstrates how the program seeks to create the institutional and financial conditions necessary to mobilize private capital for the restoration of degraded pastures within the framework of the Caminho Verde (“Green Way”) initiative. It achieves this through the interaction of two procedural instruments: firstly, the auction itself, which constitutes the financial mechanism for reducing risks and mobilizing investments; secondly, the working groups, which act as a non-financial coordination mechanism by bringing together the relevant stakeholders and accelerating implementation.
Research shows that these procedural instruments neither finance nor directly implement pasture restoration through public spending. Rather, they shape the decision-making environment in which this implementation takes place, by coordinating public and private actors, structuring institutional arrangements, reducing risks perceived by investors, and facilitating access to financing. Their effectiveness therefore depends not only on their formal design but also on how they are interpreted and operationalized by the actors involved.
The researcher's fieldwork led her to consider Eco Invest Brasil not only as a financial intervention, but also as an institutional initiative aimed at reconfiguring the governance mechanisms through which the ecological transition is financed and implemented. The second auction thus presents an opportunity to examine how financial and non-financial procedural instruments interact, in practice, to support the mobilization of private capital for sustainable land-use transitions.
Chronology of the instrument
