From: Reuters
Brazil could earn up to $16 billion per year to fund emissions reductions and Amazon rainforest protection by selling forest carbon credits, a Brazilian carbon markets expert said in an interview.
Rich countries and developing nations will discuss including forestry preservation projects known as REDD, which are not yet part of carbon markets, in a new climate treaty when they meet at a U.N summit in Copenhagen in December.
Brazil has been under pressure for years to slow deforestation, driven primarily by logging and ranching, that has reduced the Amazon's total area by some 20 percent over the past 40 years and made Brazil a major carbon polluter.
"We could earn eight to sixteen billion dollars per year from forestry credits," Flavio Gazani, head of the Brazilian Carbon Markets Association, said in an interview on Thursday.
"We all should agree that emissions from deforestation are a significant part of the problem, and we should also admit that we could use some help."
Brazil recently signaled it is open to selling carbon credits for REDD, or Reduced Emissions from Deforestation and Degradation, after months of opposition to them on the ground they could allow rich nations to continue polluting.
REDD projects let countries sell credits in exchange for protecting forests, which store carbon while they are kept standing. Forests release greenhouse gasses when cut down, accounting for a fifth of global emissions.
Supporters say such projects create incentives to prevent deforestation by monetizing forest resources. Critics say those credits could flood the market and reduce prices, and many are ideologically opposed to monetizing forests.
Brazil said last month it was studying reducing carbon emissions to 1.7 billion tons by 2020, a 19 percent cut from 2005 levels. That would take emissions to where they were in 1994, primarily through efforts to protect the Amazon.
"I think the government's goal for reducing forest emissions would be easier to guarantee if we had resources coming from REDD projects," Gazani said.
Officials said on Thursday Amazon deforestation in the 12 months leading to July fell to its lowest level since Brazil began measuring it 21 years ago, which it attributed to better monitoring and coordination with municipal authorities.
COPENHAGEN BLUES
But the future of such projects depends heavily on whether industrial countries and developing nations can put aside squabbling over who should pay for emissions cuts and ratify a new treaty extending emissions commitments beyond 2012.
"The pre-negotiations have been a bit disappointing," Gazani said. "But I don't think there's any way around it. We might not reach an agreement this year, but I don't think we'll continue much beyond that without a treaty."
Uncertainty over the treaty and global economic weakness has reduced demand for credits and limited investor interest in starting up new projects as the 2012 deadline looms.
Companies selling credits must complete a complex registration with the Clean Development Mechanism, which lets rich countries invest in emissions cuts in the developing world, instead of in pricier reductions at home.
India and China are the biggest sellers in this market because of their dependence on polluting fuels such as coal.
Gazani said Brazil has opportunities to enter voluntary carbon markets that entities in countries such as the United States, which did not sign the Kyoto Protocol, use to offset emissions. That market was only $700 million globally in 2008, compared with the overall carbon market currently valued near $126 billion.
"It's a small but growing market," he said. "The advantage is it doesn't face the 2012 treaty deadline."