Article originally published on Valor Econômico website
The sale of carbon credits allows companies, institutions or people to offset greenhouse gas emissions resulting from undertakings and economic activities, by acquiring credits generated by projects to reduce these emissions or to capture carbon from the atmosphere. An initiative to restrict pollutants from an industry, reforestation or conservation of an area with native vegetation are examples of this type of project.
Since 2021, when the international regulation of the carbon market advanced within the scope of the Conference of the Parties on Climate Change, indigenous peoples and traditional communities have suffered increasing harassment from consultants, entrepreneurs and lawyers of companies interested in doing business in this market. In this case, the idea is to generate credits through the conservation of the territories of these populations. Even in the confines of the Amazon, drafts of contracts of different types and origins, always complex, circulate.
There are still important gaps in international regulation and, in Brazil, this legislation does not exist. Although there are promising initiatives, a speculative and predatory logic prevails, which aims to “loyalize” significant stocks of forest carbon through contracts that reserve acquired rights for companies, in the long term, in exchange for immediate financial benefits.
As a rule, the alleged contracts empower consulting companies as “technical” intermediaries, responsible for project design, inventory accounting, execution evaluation, validation and commercialization of “credits” in the so-called “voluntary” market. And they keep a generous share of the eventual final economic gain.
In these contracts, there are rare references to global climate change, to national targets for reducing emissions, wherever they may be. The “credits” supposedly derive from the technical acuity of the consultants and their “credibility” in the market. As long as there are those who buy, you can even sell land on the moon.
If the carbon market abstracts the climate emergency to operate in parallel realities, it won’t go very far. The worsening of the crisis will not leave much room for nonsense, it should restrict the possibilities of fraud and will demand results, given that consistent results from projects involving forest carbon are built over time. The wave of speculative harassment may generate more lawsuits than effective initiatives.
Specific forest carbon projects have, in principle, a high risk rate and doubtful additionality to face the climate crisis. When it comes to forest restoration, it favors better conditions for controlling and measuring results. But conservation and territory management initiatives are more susceptible to local (including the communities involved) and regional (state presence) governance conditions.
There are also different legal situations to consider. The Indigenous Lands belong to the Union and are intended for the exclusive use of indigenous peoples. Extractive Reserves, on the other hand, can be federal or state, and the rights of local communities are regulated by use concession contracts. Quilombo lands are the common domain of the communities. There are also private areas and public areas without destination.
What reduces the risk of projects involving forest carbon is the scale. The Amazon Fund was conceived based on reducing the rate of deforestation in the Amazon. A new fund created by the US, Great Britain and Norway contemplates the concept of jurisdictional projects, involving areas greater than 2.5 million hectares and with defined governance.
It can be a country, a state or an institutional area. This opportunity stimulated negotiations of sub-national projects of states in the Amazon region, while the federal government remained aloof in the past mandate. The interest of most states and their willingness to open direct negotiations and formulate projects is very positive, but faces basic difficulties.
In these negotiations, the States position themselves as managers of the existing carbon stocks in their respective territories, which are taken into account in the calculation of eventual compensations. However, in many cases, these stocks are on Union land and their protection depends on it. Nor is it up to the states to unilaterally define the parameters for sharing any benefits, which should be common to all.
The viability of a carbon credits market in Brazil depends on federal regulation that establishes parameters for ownership of carbon rights, transparency and climate effectiveness. This norm will need to organize forestry projects at a minimum and give credibility to the system. Policies are still needed that share the benefits of eventual emission reductions among populations from different forest contexts.
The additionality of the carbon market, that is, its effective capacity to reduce emissions, depends on its correlation with the national targets for reducing these emissions. In the case of the participation of foreign companies, they must also report to the goals of their countries of origin.
What is not possible is for the design of this market to be subordinated to the action of these brokers from heaven and earth, with their “fake” contracts, opportunistic and harmful, as they tend to fail and jeopardize the development of good projects in these places. Cash advances offered by these intermediaries to communities are on the same unethical level as contracts with loggers, miners and other illegal predators of natural resources.