Amazon’s Preserved Core Is Heating Up, and That Changes the Climate Risk Map for Brazilian Business

Why it matters: Until now, the dominant narrative tied Amazon warming almost exclusively to deforestation along the southern and eastern arc. This finding shifts the picture: even well-preserved forest in the heart of the biome is heating fast. That means climate risk models that use deforestation proximity as the main variable are underestimating exposure, and any company, insurer, or investor relying on those models needs to revisit assumptions.

What this means for corporate climate risk in Brazil

Brazilian companies that operate supply chains touching the Amazon, from agribusiness to cosmetics to energy, typically map physical climate risk against deforestation frontiers. A preserved block of 700,000 km² heating above 3°C forces a recalibration. Firms reporting under the ISSB-aligned CVM Resolution 193/2023 (which phases in climate-related disclosures for publicly traded companies) will need to account for the possibility that even “low-risk” sourcing zones inside preserved forest carry material physical risk. Insurers pricing agricultural or infrastructure policies in Amazonas and Pará states face the same gap: historical loss data from those interior zones may no longer be a reliable guide.

For companies in the voluntary carbon market, the implications are direct. REDD+ projects and jurisdictional crediting programs in the central-northern Amazon have marketed permanence partly on the basis that the forest, being far from the deforestation frontier, faces lower threat. Accelerated warming and water deficit in preserved areas introduce a non-deforestation driver of biomass loss (drought stress, increased fire susceptibility, tree mortality) that most project design documents do not model. Buyers of credits from these areas should ask whether the baseline and buffer pool assumptions still hold.

The regulatory gap: no Brazilian mechanism addresses interior Amazon warming

Brazil’s primary deforestation-control instrument, the PPCDAm (Action Plan for Prevention and Control of Deforestation in the Legal Amazon), and the newer PPCerrado focus on reducing clearing. The National Climate Adaptation Plan (PNA), published in 2016 and still awaiting a formal update, acknowledges Amazon vulnerability but does not set specific triggers or protocols for warming in preserved areas. There is, as of now, no federal program that monitors or responds to temperature anomalies in non-deforested Amazon zones as a distinct policy category.

The Climate Fund (Fundo Clima), recently recapitalized with planned disbursements above R$ 10 billion, finances mitigation and adaptation projects, but its allocation criteria prioritize energy transition, urban resilience, and deforestation reduction. Interior Amazon thermal stress does not fit neatly into any existing funding line. This is a gap that the Ministry of Environment and Climate Change (MMA) and the Ministry of Science, Technology, and Innovation (MCTI), which oversees INPE’s monitoring systems, would need to address jointly. What remains undecided is whether the next iteration of the PNA, expected to be updated under Lula’s administration, will incorporate biome-interior climate thresholds as triggers for adaptive action, or whether it will continue to treat deforestation as the near-exclusive Amazon policy lever.

Who gains, who loses

Companies and municipalities that positioned themselves as “safe” because they sit inside preserved forest, not on the deforestation frontier, lose a key argument. Carbon project developers in the central-northern Amazon face harder due diligence from credit buyers. On the other side, remote sensing and climate analytics firms gain relevance: demand rises for granular, biome-interior temperature and water-deficit monitoring that goes beyond deforestation alerts. Research institutions like INPA (National Institute for Amazonian Research) and INPE gain a stronger case for funding, since their datasets become essential to repricing risk across the region.

via ClimaInfo