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Brazil presents particular challenges for sustainable forest management. Much of its forest is on private land and there are strong pressures to make land available for agriculture, while forests have traditionally been seen as obstacles to development. Most private sector forestry in the Amazon is unsustainable, with large areas being cleared for other land uses in spite of regulations which aim to ensure good forest management and to limit conversion. This report considers how new approaches to forest policy can induce the private sector to play a positive role in forest management. It examines how policy and market failures have limited this until now, and assesses the prospects for new types of instruments to overcome these failures. These new approaches, which include certification, payment for environmental services, private sector-community partnerships and incentives for reforestation, emphasise markets and have the common goal of increasing forest values to private owners or managers of land.