This working paper looks at the effectiveness of the Amazon Fund, the largest dedicated fund supporting efforts to reduce emissions from deforestation and degradation in the Amazon.

It is managed by the Brazilian Development Bank with US$ 1 billion in funding from the government of Norway, and technical assistance support from Germany. The paper argues that the Fund has demonstrated that developing country institutions can meet high standards of fiduciary governance and operational transparency. Yet while the $1 billion committed to the fund is a significant sum relative to other climate funds, it is a small sum of money relative to the size of the Brazilian economy and the incentives that are driving deforestation. While the fund is intended to work on a payment for performance basis, in practice the paper argues that the payments have been less clearly linked to demonstrated emission reductions.