2023-05-02 16:02:41
Article originally published in the newspaper Valor Econômico, on 5/2/2023 (read the PDF)
On 3/30, the plenary of the Chamber approved Provisional Measure (MP) 1.151/2022, which intends to amend the Forestry Concessions Law, from 2006, to expand the activities that can be granted in public forests. According to the text, in addition to wood, the concession may cover the management of animal species, fishing and genetic heritage, for example. Now, the Senate has the opportunity to correct mistakes in the text.
Proponents of the MP allege that the law needs to be changed because the sustainable and legal handling of wood is economically unfeasible in the face of competition from illegal and predatory extraction. Maintaining the current status quo, one of the original objectives of the law, which is to prevent illegal deforestation, is no longer fulfilled. The problem would be solved by expanding the activities subject to concession.
A first issue is the possible impacts on traditional populations. For example, a fisheries management concession may affect the availability of fish in a region. When there is overlap and conflict of uses and interests over the same areas, concessions can threaten the subsistence and quality of life of these communities. It should be noted that their use of natural resources is more compatible with the conservation of carbon stocks than conventional forest management.
There are still several doubts as to whether the MP would bring more difficulties to the official recognition of traditional territories. One would expect a regulation that establishes the ownership of the various actors who live and manage forests, and not just for concessionaire companies.
It is imperative, therefore, that the new law be accompanied by adequate safeguards to protect the rights of these populations. We have already talked about some of the carbon market risks for them in an article published here in Valor.
The generation and sale of carbon credits, the concessionaires’ main claim, was also included in the list of new activities that could be the target of concessions.
Companies, institutions or people can offset greenhouse gas emissions resulting from undertakings and economic activities by acquiring carbon credits generated by projects to reduce these emissions or capture carbon from the atmosphere. Examples are reforestation or the control of pollutants in an industry.
Shot in the foot
The generalized permission for the generation of these credits by forest concession, without the necessary proof of its contribution to the fight against climate change, will be a shot in the foot not only for the concessionaires, but for the carbon market itself – which Brazil still intends to regulate and consolidate.
While forest restoration of degraded areas promotes clear and measurable carbon sequestration, this generally does not happen in the case of concessions for logging. Usually, the removal of nobler woods requires decades for the regeneration of the exploited area. Until the cycle is completed, what happens is a reduction in the wood stock through continued extraction. Specifically, there will be emissions of greenhouse gases until, if all goes well, the stock is replenished. There is no additionality regarding carbon sequestration, that is, there is no effective reduction of emissions.
Those who define the rules for a carbon credit to be generated and sold are not those who think they are entitled to this credit. The transaction is not made by self-declaration nor on the presumption of good faith of those involved.
The methodologies used in a given project to calculate whether it exists and what would be the effect of reducing emissions or removing carbon from the atmosphere need to be validated after technical-scientific and legal analyses. If a methodology is approved, a project that intends to apply it needs to be evaluated by an accredited independent entity to certify that these results were achieved and, in this case, only then are credits generated. Projects also need to be audited over time to assess whether they are meeting climate goals. In addition, the certification of these projects must assess whether they meet socio-environmental safeguards, far beyond carbon.
It so happens that, today, the accounting of consulting companies that sell carbon credits for native forests is beyond questionable. In January, an investigation by The Guardian and Die Zeit newspapers and the SourceMaterial agency showed that more than 90% of the forest carbon credits in an important part of the portfolio of the main certifier in the world did not mean emission reductions. The company is reviewing its designs and methodologies.
The carbon market has been experiencing a speculative boom since the UN Climate Conference held in 2021 in Glasgow, Scotland, when it advanced the regulation of Article 6 of the Paris Agreement. The device deals with cooperation mechanisms between countries to implement this market. It establishes two mechanisms: one provides for transfers of emission reduction results between countries; the other allows companies to develop emission reduction or carbon removal initiatives to generate carbon credits that can be traded with other companies or with governments of other countries.
However, discussions about credits related to avoided deforestation are still in their infancy. For now, the UN negotiations have not defined whether native forests would be part of any of these mechanisms.
The proposal for a new law that could allegedly flood the market with carbon credits in Brazil, without credibility, has the potential to bankrupt the market itself. Proposals to regulate the issue at the national level may face a death sentence even before approval.
If there are buyers for so much unbacked credit, they would only buy it for greenwashing. No company or government that has to offset emissions to meet a legal obligation is going to buy uncertified and credible credit.
* Márcio Santilli is a philosopher, founding partner of Instituto Socioambiental (ISA). Author of the book Subverting grammar and other socio-environmental chronicles. He was federal deputy for the PMDB (1983-1987) and president of Funai from 1995 to 1996.
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