Why Brazil Needs to Rethink its Restrictions on Carbon Trading

Why Brazil Needs to Rethink its Restrictions on Carbon Trading
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At the United Nations climate talks last week, we heard a loud and clear message from science: global warming is moving at an alarming rate, faster than predicted. The scenarios are very worrisome, with the melting of glaciers, more frequent super storms and other extreme climate events. These have been responsible for huge waves of human migration to cities with low capacity to absorb them, resulting in conflicts, civil war and even the collapse of societies as a whole as we have seen in Syria.

The commitments made by countries in the Paris Agreement, if fully implemented, can reduce current trends by half. However, this is not enough. We need to multiply those commitments by two. This requires new approaches and innovative thinking now.

Brazil could position itself as a leader in the development of a low carbon economy. Reducing deforestation is the key to meeting the massive short-term emission reductions that science is demanding. It can be reduced rapidly, as the case of the Brazilian Amazon well illustrates. Deforestation went from 27,000 square kilometres to 6,000 square kilometres in the 2005-2015 period, resulting in emission reductions of 5.6 billion tons of CO2 -- more than the European Trade Scheme has achieved.

The problem is that reducing deforestation costs money - it is not a matter of simply enforcing the law. Moving from an era of agricultural expansion as means for economic development, to one where forests are worth more standing than cut down is extremely costly. Tens of billions of dollars are pumped into cattle rearing and agriculture every year. Yet, for the forest's part, extremely poor populations need to improve their livelihoods, especially in terms of education and health.

We need to place a value on the ecosystem services provided by forests, including their ability to capture and store the carbon that is warming our planet. Reducing Emissions from Deforestation and Degradation, plus forest conservation and the enhancement of carbon stocks, is referred to in the UN system as REDD+. REDD+ projects prevent deforestation from happening where the trend of land clearing for agriculture is apparent.

Investing in protecting forests has been proven to be much more advantageous for the planet and for people than other approaches. For example, REDD+ projects help maintain rainfall regimes, conserve biological diversity and generate income opportunities for local populations, improving their access to healthcare and education resources. REDD+ thus is a driver of sustainable development in forested areas.

We work with thousands of indigenous people whose lives have been transformed since they have been trained to conserve the forest and earn money from sustainable farming. In addition, these emission reductions can happen much faster and at lower costs than any other alternative.

The challenge is how to unlock private finance for REDD+ activities. The largest operational fund for REDD+ is the Amazon Fund (US$1.8 billion), financed mostly by Norway, with additional support from Germany and Petrobras. The Amazon Fund has captured some six per cent of the total emissions verified by Brazil. But it is unlikely that many other "Norways" will come on board to fill the funding gap.

That is why we cannot ignore the potential that a well-set carbon trading scheme can have for financing these vital conservation projects in the Amazon, Central Africa and Southeast Asia. Our neighbours with whom we share the Amazon rainforest recognise the importance of this financing mechanism. Brazil cannot meet its climate pledges without it.

And that is also why the Sustainable Amazonas Foundation, State of Amazonas and BV Rio launched a new online registry of REDD+ projects for Amazonas. The platform also includes a trading platform for carbon emission reductions, which could generate the financing that forest conservation projects desperately need.

We took the opportunity at the UN climate talks to urge the Brazilian government to change its position and allowing broader market mechanisms for REDD+, in an open letter, signed by many organisations such as FAS, the Institute for the Conservation and Sustainable Development of the Amazon (IDESAM), SOS Mata Atlântica Foundation, and research institute IPAM among others.

Investing in forest mitigation through REDD+ can serve as a major contributor to closing the gap between national commitments to emission reductions and those required by science. REDD+ should be seen as a complementary way for all sectors to move towards deep decarbonisation. To ensure effective reductions, it must be carried out with technical and scientific rigor, to avoid double counting. It should be targeted at specific sectors, such as aviation, and should have both social and environmental safeguards, so that the greatest benefits go properly to indigenous people, the guardians of the forest.

In contrast to other options, REDD+ also offers co-benefits that are much needed to boost ecosystem resilience and reduce social inequalities worldwide. Greening the energy sector will not be enough and takes too long. We must take bold and innovative action now while there is still time. And Brazil should take the lead on this green economy transition as the largest and most biodiverse country in the world.

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