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Executive Summary

The Amazon Basin, and the Latin America and Caribbean (LAC) region, stands at a critical juncture, grappling with pressing environmental challenges while holding immense potential for transformative change through innovative solutions. This report illuminates the diverse landscape of social-ecological issues, technological advancements, community-led initiatives, and strategic actions that could help foster biosphere-based sustainability and resilience across the region.

  • Biodiversity serves as the foundation for economic prosperity and human well-being, providing essential ecosystem services such as pollination, carbon sequestration and water purification. Loss of biodiversity due to human activities, such as deforestation and wildlife trading threatens food security, water quality, health, and security, impacting millions worldwide.
  • The Amazon rainforest, home to around half of the world’s remaining rainforests and a significant portion of global biodiversity, faces substantial threats from deforestation and climate change. Evidence of a potential “Amazon dieback”, where the rainforest could transition to a drier, more degraded state due to reduced moisture recycling and increased droughts, is a major concern. Dieback could be triggered by factors such as deforestation reaching a threshold of around 20-25% of the original rainforest territory or global warming reaching 3-4°C.
  • Interactions among tipping points and Earth Systems cascading effects can propagate irreversible changes across ecosystems, affecting climate feedback loops and amplifying environmental risks beyond the boundaries of the Amazon rainforest. If wide-scale dieback were to occur, the Amazon rainforest could release significant amounts of CO2 into the atmosphere, exacerbating global warming and regional climate impacts, such as changes to the hydrological cycle and precipitation patterns across South America.
  • The financial sector plays a significant role in driving biodiversity loss by funding extractive activities that result in direct and systemic socio-economic risks, which can trigger instability across businesses, markets and livelihoods. Moreover, the financial sector is not shielded from the impacts of biodiversity loss. A potential ‘tipping’ of the Amazon rainforest into a savannah can be considered a “green swan event”, posing significant financial risks with wide-ranging social, economic, and ecological implications.
  • Extreme weather events, such as droughts triggered by climate change, are already affecting the Amazon Basin and hydropower infrastructure, leading to the risk of stranded assets and disruptions in electricity generation. Nearly 1,000 existing or planned hydroelectric power plants in South America are at risk of further decrease in precipitation, with financial implications for investors, including publicly-listed companies and large asset managers.
  • Action to limit warming to 1.5°C or well below 2°C, as outlined in the Paris Agreement, is crucial, but not sufficient, to minimizing the risk of Amazon dieback. Restoring degraded forest, shifting to sustainable land-use practices, and empowering Indigenous peoples and local communities are key strategies for improving Amazonian resilience to climate change and halting deforestation. This requires collaboration across biodiversity science, accounting, regulation, and business practices to promote sustainable financial practices and nurture biodiversity for long-term prosperity, with a few strategies already being rolled out across the region.
  • Equity, loans and bonds provide pathways for investors to influence corporate policies and actions. U.S.-based asset managers play a significant role in investments associated with key drivers of deforestation, especially in Latin America. Mobilizing financial influence can complement governmental efforts by engaging with the corporate sector to advance financial transparency and support a resilience and a planetary health agenda.
  • Novel technologies aimed at mitigating environmental issues and enhancing nature-based solutions, could revolutionize approaches to preserve biodiversity and combating climate change. By filling critical data gaps, so-called “nature tech” can empower decision-makers with the information needed for effective land use planning, conservation, and restoration efforts, thus attracting investment in sustainable initiatives. However, several challenges must be overcome to fully leverage this potential, including limited funding, unequal access to technology, fragmented collaboration, and insufficient capacity building. Ethical considerations are paramount to ensure responsible technology usage, equitable benefits distribution, and mitigation of unintended consequences.
  • While technology and infrastructure can partially replace nature’s benefits, they are often costlier and fail to provide multiple co-benefits. Natural Capital Assessments and Accounting (NCAA) have emerged as effective tools for integrating biodiversity and ecosystem services into policy and finance decisions. Through participatory science-policy processes, stakeholders are co-creating actionable, science-based solutions to address pressing challenges. In the Amazon Basin, natural capital approaches are already influencing policy and investment decisions, through building community resilience in the Amazon Headwaters, harmonizing livelihoods in Bolivia’s Llanos de Moxos region, and helping prioritize investments in Colombia.
  • Lessons from neighbouring regions can also inform action within the Amazon rainforest. The XPaths project engaged stakeholders in a participatory process to identify key challenges and formulate strategic actions for a sustainable future in the semiarid region of São Francisco River basin. Four primary challenges and interconnected strategic actions were identified: environmental education and social mobilization, agrarian reform and territorial demarcation, political empowerment and policy continuity, diversification of the economy. By addressing these challenges holistically, the semiarid region can move towards a sustainable and just future, safeguarding water sources and promoting socio-economic development for generations to come.

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