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Helicopters are being used to search for illegal sawmills inside the Amazon

What sort of the place is the Amazon region?

Contrary to what you might think, more than 30 million people - two-thirds of them Brazilian - live in the Amazon region, a vast area which represents 40% of South America and includes parts of nine countries.

More than half of them live in urban areas, but the majority of its inhabitants live off the forest in some way. They are often blamed for the deforestation of the region, but many depend on the forest as their means of earning a living and of escaping poverty.

Many observers agree that the main challenge is how to develop the Amazon region economically without destroying it. There is a growing consensus amongst Amazon experts that local people have to be a huge part of any solution to conserving the forest, by offering the right mix of economic benefits and incentives.

Why is the region so important to the rest of the world?

Crucially, the region plays a critical role in the global carbon cycle that shapes the world's climate.

Many scientists say that in the future the region will be a possible tipping point for pushing the world into much warmer temperatures; and the Amazon contains a rich store of biodiversity, with around a quarter of all the earth's terrestrial species found there.

What is the current rate of deforestation of the Amazon?

About 80 per cent of recent deforestation has taken place in Brazil.

In 2001, the forests of the Amazon covered more than five million square kilometres -about 87 percent of their original extent.

The 13 per cent that has already been lost is equivalent to an area roughly the size of France and Germany.

Hopes were raised last year when the Brazilian government announced a 30 per cent drop in the rate of deforestation from mid-2006 to mid-2007 - the third year running that a drop had been registered.

However, in early 2008, data from the Brazilian National Institute for Space Research showed a big increase in deforestation had occurred in the last five months of 2007.

About 7,000 square kilometres - an area twice the size of Long Island in the USA - of rainforest were destroyed in those months alone. The three Brazilian states with the highest rate of deforestation were Mato Grosso, Para and Rondonia.

Outside of Brazil, Ecuador has the highest rate. From 2000-2005, it lost about 200,000 hectares of forest a year, mainly due to oil exploration, logging and road building.

What are the main drivers of deforestation in Brazil?

Demand for soy beans is leading to increased forest clearing

Cattle ranching has been the largest cause of deforestation, accounting for about 70 per cent of all loss. Soya production and illegal logging are the other main culprits.

Slash-and-burn farming typically carried out by small landowners is also a significant factor.

Brazil's Amazon region now contains about 55 million head of cattle, compared to fewer than 30 million in 1990. Soya planting has increased five-fold from 1.2 million hectares in 1985 to 6 million last year.

As a result, Brazil is now the world's largest exporter of soya and beef - much of it driven by growing demand from the rapidly expanding Asian economies, and particularly China. And many researchers argue that the main determinants of deforestation rates are the variations in the international prices of those two commodities and the value of the Brazilian currency, the real.

The building of roads across the region is also blamed, as it opens access to low-cost land which attracts new migrants to the areas being opened up.

The construction of new hydroelectric dams, like the ones planned for the Madeira River close to the Bolivian frontier, also adds to the pressure.

Are biofuels a major factor?

President Luiz Inacio Lula da Silva of Brazil says no. Brazil is the world's leading producer of ethanol from sugar cane, which Lula says will serve as a desirable alternative to fossil fuels.

His government points out that most sugarcane is not grown in the Amazon region.

But critics say the indirect effect of increased sugar production is that it displaces cattle farms into Amazon areas and thus exacerbates deforestation. A similar argument is used by critics of the huge subsidies paid by the US government to promote corn production for ethanol, which has set off a chain reaction: US soya farmers are switching to corn, which causes Brazilian farmers to grow more soya.

They do this either by clearing forests or by purchasing large expanses of cattle pasture to grow it. This in turn pushes the cattle ranchers further into the Amazonian frontier areas known as the 'arc of deforestation', particularly in the southern and eastern margins.

What is the current Brazilian government doing about deforestation?

Brazil has sophisticated satellite technology which is regarded as the best in the world for tracking deforestation.

Using two software systems known as Prodes and Deter, officials can view on their computers high resolutions of small sections of the Amazon based on a series of polygons.

They say they can detect instantly the trees being felled and send in teams on the ground to make arrests.

However, critics say historical problems of corruption, lawlessness and inadequate resources undermine the effectiveness of the detailed information the satellite technology is providing. For example, Ibama, Brazil's environmental control agency, manages to collect only about one to two percent of the fines it imposes for environmental crimes.

Brazil also has very strict environmental laws. For example, landholders are normally permitted to deforest only 20 per cent of their property.

But enforcing the law in vast areas more akin to the Wild West has proved hugely problematic.

What other measures have been introduced?

Anticipating worsening deforestation figures, the government announced in December a raft of new measures, including:

• fines for trading in farm products planted or reared illegally on deforested properties;
• an increased federal police presence in key deforested areas;
• a new land registry and restriction of credit for landowners failing to register.

In February this year, 'Operation Arc of Fire' was launched to re-impose the presence of the state in remote areas, with the deployment of security forces and government inspectors to stamp down on illegal logging. This was met by opposition from local people in some areas, who were fearful they would lose their living.

Press reports suggest that initial results have not been good due to the huge obstacles at play.

What longer-term solutions are being put forward to stop deforestation?

'Slash and burn' is being used to destroy many of the trees

The new "Bali roadmap" outlined at the UN meeting last December for the post-2012 Kyoto Protocol included plans for rainforest nations such as Brazil to be paid for Reducing Emissions from Deforestation and Degradation (known as Redd), whether through a voluntary fund or private sector carbon markets.

At the Bali meeting, the Brazilian government put forward an ambitious proposal to achieving zero deforestation by 2015, largely through raising such international funds.

One version of what could be achieved through REDD was presented at Bali by a leading Amazon scientist Dan Nepstad. He argues that the total cost of reducing deforestation down to zero over the next 30 years would be US$41 billion, equivalent to US$1.2 dollars per tonne of avoided emissions of carbon dioxide.

There are now several projects being developed in the region to try to extract the riches of the forest in a sustainable way.

The idea is to guarantee that the forest will be preserved for future generations while at the same time benefiting the local population. Many small-scale schemes are already being tried out by which local people are paid not to cut down forests, or paid to extract the riches of the forest sustainably.

Critics question whether such schemes can be 'scaled up' to make a real difference to deforestation rates. A major initiative was started in July 2006 by Greenpeace, McDonalds and other leading food retailers, US commodity firms like Cargill and some major Brazilian soya producers.

They agreed a two-year moratorium on not buying soya from newly deforested land. More urgency has been added by recent projections for deforestation if business continues as usual.

An article in Science magazine in January 2008 quoted research by Brazilian and British scientists suggesting that current plans for infrastructure expansion and other factors could reduce forest cover from the current 5.4 million square km to just 3.2 million by 2050 - about half of the Amazon's original area.

Pessimistic observers argue that no amount of international funds will be able to compete with the power of the market.

However, the authors of the Science article suggested the deforestation rate could be significantly reduced by a combination of measures such as large protected areas, good governance, and bringing economic benefits and incentives to indigenous peoples, small-scale farmers and large agro-industries.

The authors said the other key requirement was political will at the local, national and international level.