As the Brazilian president-elect Dilma Rousseff prepares to take up the reins of power in January, the news from the Amazon rainforest appears, on the face of it, to be pretty good.

All the signs are that the official deforestation figures for 2009-10, due out in the next few weeks, will for the second year running be the lowest since satellite monitoring began in the late 1980s.

A combination of stricter government enforcement, fussier buying policies from supermarkets and global agricultural companies, and the dampening of demand due to the recession drove clearance of the forest down to just above 7,000 square kilometres in 2008-9, barely one-quarter of the rate witnessed in 2003-4. The Brazilian national space agency is still analysing the high-resolution images comparing Amazon forest cover in August this year with the same time 12 months earlier, but coarser-resolution surveys suggest a further drop to somewhere in the ball park of 6,000 sq km of loss. Which would put the Brazilian government well ahead of schedule in its ambition to cut deforestation by 80% before 2020 - the cornerstone of its voluntary pledge to limit greenhouse gas emissions.

However, a new report by Paulo Barreto, senior researcher from the respected Belém-based NGO Imazon (Amazon Institute for People and and the Environment) sounds a note of caution. In a typically measured and well-balanced analysis, Barreto argues that yes, we may well be on course for a sustained reduction in the rate of loss of the world's greatest tropical forest. On the other hand, political and economic factors very much in play right now could easily break the trend and cause the reduction either to stall or move into reverse.

Barreto outlines three scenarios which helpfully summarise the variables. First, low deforestation  with  annual losses in the Amazon of less than 2,000 sq km per year; second, medium deforestation with losses roughly at or slightly higher than the rates of recent years; and finally, high deforestation, in which destruction of the rainforest would return to the past levels that caused such international alarm.

For low deforestation to be achieved and sustained, Barreto signals the following prerequisites:

• The Brazilian Congress would NOT change Brazil's environmental laws in ways that could promote deforestation by, for example, granting amnesties to environmental lawbreakers and reducing the proportion of land required to be kept in native vegetation. This, as I noted in my blog earlier this year, is very much on the agenda with the powerful rural lobby in Congress proposing major changes to the 1965 Forest Code - some deputies want the changes to be put to a final vote before the newly-elected members of the Lower House take their seats in the New Year. The strong showing of Green Party candidate Marina Silva in the first round of the presidential election may be relevant here, as Ms Rousseff subsequently pledged to veto any proposal that included such an amnesty.
• The government would continue the effective enforcement of environmental laws that have helped reduce the deforestation rate, and, crucially, crack down on illegal cattle abattoirs. This is critical for maintaining a trend that has created one of the most hopeful routes to a "virtuous circle" out of deforestation. Under pressure from NGO campaigns, federal prosecutors and, increasingly, from Brazil's big supermarkets, some major slaughterhouses are introducing systems to ensure they only buy from ranches able to demonstrate they are not grazing their cattle on recently-deforested land. However, since it is reckoned that around a third of Brazilian beef was produced in clandestine abattoirs in 2006, there is clearly a big loophole that needs to be closed.
• The government would reduce the transaction costs for obtaining environmental permits, speed up the titling of land and provide financial support, particularly for smaller farmers, to help observe environmental regulations and engage in forest management. This is especially important as the lobbyists against the current laws always cite their damaging impact on the incomes of smallholder farmers - Barreto suggests that this support could be financed as part of the government's climate change policy. In this scenario, better prices could be negotiated for beef certified as coming from ranches free of new deforestation, and there would be incentives to invest in greater productivity contributing to further economic growth without a return to forest clearances.

In the medium deforestation scenario,

• There would still be no major changes to the Forest Code and the government would continue to bear down on deforestation through the kind of enforcement measures adopted so far, especially targeting larger landholders.
  
• There would not be any additional incentives or support for complying with environmental laws, of the kind outlined above.
• New areas would become available for legal deforestation, through the greater accessibility created by current projects to pave highways in the Amazon, and through a number of current legislative proposals to reduce, downgrade or even abolish a significant number of protected areas - as revealed by an earlier Imazon report.
• The newly-available areas would provide legal beef supplies for markets unwilling to adopt a "zero deforestation" buying policy (for example, exports to China), and the clandestine beef producers would not be controlled.

The high deforestation scenario would include all of the conditions outlined under the previous scenario, but with the addition of Congress going through with the proposed changes to environmental legislation, and the president NOT vetoing them.

What Barreto's report shows is that the continuation of current positive trends on Amazon deforestation cannot be taken for granted. Plans already in the pipeline, or being pushed by very powerful political and economic interests, could yet derail the spectacular success of recent years in slowing the destruction of this incredible ecosystem. Additional and ambitious new initiatives will be needed to keep up the momentum. The good news is, it seems there is still all to play for.