From: Carbon Positive
Brazil stands to earn up to $16 billion a year in carbon market payments for protecting the Amazon rainforest, the Brazilian Carbon Markets Association says. The estimated range of the annual value of potential carbon credits that could be generated from avoided deforestation activity is $8bn to $16bn, Flavio Gazani, head of the Association, told Reuters, although the figures would appear to be optimistic.
The UN’s REDD initiative is currently drafting plans for an international payment system to fund forest conservation in developing countries from 2013. Negotiations are advancing slowly, however, as with most aspects of a new global climate change agreement that was to be concluded at Copenhagen next month.
The Brazilian government has set ambitious targets to cut national carbon emissions from industry and land use as its contribution to the UN negotiating process. And the overall emissions reductions target relies heavily on the contribution from the forest sector. Gazani says that carbon credits from protecting standing forests would make the target easier to achieve.
The government has come around to supporting a market mechanism to underpin REDD, after originally favouring a fund-based approach bankrolled by developed world governments, Reuters said.
Gazani says that Brazil should consider the forest carbon opportunities from the existing voluntary carbon market as well as any emerging UN regulated market. The voluntary market is currently providing direction to the design of a huge potential US market in REDD carbon credit offsets, one of the underpinnings of cap and trade laws being debated currently in Congress.
The basis of Gazani’s estimates were not revealed but at industry ballpark estimates of $5 per tonne for REDD carbon credits, it is hard to see how the forecasts billions could be achieved, even if building up to those levels over time. It would require 1.6 billion tonnes of avoided carbon emissions to generate $8 billion in credits, equating to many millions of square kilometers saved from clearing every year. Amazon deforestation was 7000 square kilometres in 2008-09, down from 13,000, according to official figures.
A slowing in deforestation in Brazil reduces the potential size of REDD payments by lowering the national deforestation baseline against which emission savings would probably be calculated.