The U.S. and the Amazon Fires: Closer than You Think

This past August, 76,000 fires burned across the Amazon rainforest in Brazil, an 80% increase from the same period last year. These fires were a symptom of “burning season,” which occurs every year from June to December when the southern Amazon Basin dries out and becomes more prone to fires. Most fires, however, are caused by human activity, especially due to land clearing for farming. 

Amazon fires are especially concerning because they pollute the air with smoke, destroy wildlife and natural habitats, and raze an important carbon storehouse for our planet. Additionally, as the forest burns, the trees release carbon in the form of carbon dioxide, a greenhouse gas that contributes to climate change. 

The burning of the Amazon affects everyone on the planet because the Amazon alone absorbs about 5% of annual emissions of carbon dioxide per year and plays a vital role in regulating the climate. Although we, as Americans, might seem quite distant from the issue, the fires in the Amazon are closely linked to American banks and agribusiness companies such as Archer Daniels Midland and Blackstone. 

Brazil’s president, Jair Bolsonaro, has pledged to increase agricultural activity in the Amazon and has supported industries that seek greater access to the Amazon. Already, Bolsonaro  has weakened forest protections and efforts to scale back illegal logging, ranching, and mining. But which companies do these regulation changes benefit? Or, as Anna Lappé of The Atlantic puts it, “who is profiting from the development that led to these fires?”

According to the US-based non-profit, Amazon Watch, foreign investors pour billions of dollars into the beef and soy industries in Brazil. As the market for soy grows, so does the land required to grow the commodity, thus contributing to deforestation. 

In its study, Amazon Watch found that agribusiness companies such as Archer Daniels Midland and Bunge dominate Brazil’s soy trading market. The financiers Vanguard, State Farm, BlackRock, State Street, and T. Rowe Price collectively own more than $9 billion in investments in these two agribusiness companies. Furthermore, the banks BNP Paribas, JPMorgan Chase, Barclays, Bank of America, and Citigroup each provide more than a billion dollars in credit to these companies. 

Another American company, the investment firm Blackstone, not only has partial ownership of Brazilian agribusiness companies, but also has facilitated the creation of a controversial highway and a major port in order to expedite agribusiness exports. In response to criticism, Blackstone released a statement to The Intercept positing that “Blackstone is committed to responsible environmental stewardship… In this instance, while we do not have operating control, we know the company has made a significant reduction in overall carbon emissions through lower congestion and allowed the more efficient flow of agricultural goods by Brazilian farmers.”

Blackstone claims that the International Finance Corporation (IFC) supports its contention that the highway and port reduce carbon emissions overall. However, this assertion by Blackstone is incomplete and misleading. While the IFC conceded that transporting soy by waterway would be less carbon-intensive, it then went on to say that the construction of the port would lower transport costs for farmers and ultimately accelerate deforestation. Blackstone omitted the second part of the IFC’s assessment and used the first part to justify their business practices to the public.  

Evidently, Americans are much more closely connected to the burning of the Amazon than we think. The very first step in resolving this environmental crisis is public recognition of the problem. We, as Americans, need to bring attention to the role that American banks and financiers play in the deforestation of the Amazon. Financiers such as Blackstone have been able to get away with deleterious business practices for so long partly because the general public does not immediately recognize the link between American companies and the burning of the Amazon. We must expose these companies for the environmental damage that they have caused, which would in turn put pressure on them to change and regulate their business practices. 

Companies like Blackstone have assuaged the public with statements such as its comment to the Intercept that their port in the Amazon would reduce carbon emissions. Through closer examination of the IFC’s evaluation of the company, one is easily able to discredit Blackstone’s assertion that the new port would be environmentally friendly. This disagreement between what a company says about its business practices and its actual business practices can be observed in a number of companies involved in the destruction of the Amazon, so we must take the public statements of these businesses with a grain of salt. Banks and financiers like Blackstone must be put under closer scrutiny by the government to make sure that they actually follow the business practices that they put forth to the public. 

Furthermore, we must finally recognize the role that we as consumers play in the deforestation of the Amazon. Consumer demand for beef is directly related to the replacement of natural habitats in the Amazon with agricultural areas. This is a connection that is not made easily in the minds of many Americans, but it is a connection that must be well publicized in order to reduce the demand for beef worldwide.

The unscrupulous business practices of American banks and financiers in the Amazon are not a new problem. However, foreign investors have taken advantage of Bolsonaro’s weakened forest regulations to swiftly expand the soy and beef industries, thus resulting in the huge number of Amazon fires this past August. The American public must mobilize to counter the destruction of the Amazon by recognizing and minimizing the role that America plays in the crisis.