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It will take a lot of investment to turn this trend around. As Brazil’s president, Luiz Inácio Lula da Silva, noted before the United Nations climate summit in Dubai began in November, “There needs to be a volume of resources that perhaps, until today, has never been proposed.”
Timothy Searchinger, a Princeton scholar and expert on forests at the World Resources Institute, pointed out that land use change worldwide, including deforestation, adds up to 5 billion tons of carbon dioxide emitted into the atmosphere annually. Brazil alone emits over 600 million tons of carbon dioxide annually from the exploitation of its forests. Even at a fairly conservative cost of $10 per ton — to compensate Brazil’s farmers to keep the rainforest standing, to restore degraded land, to monitor the forests and develop new models of sustainable farming — would cost $6 billion a year.
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Only about $1.7 billion has been channeled to pay for preventing the deforestation and degradation of the Amazon, mostly from Norway via the Amazon Fund set up by the Brazilian government in 2008. This provided compensation for some 300 million tons of carbon dioxide that was kept out of the atmosphere — less than 5 percent of the 6.4 billion tons of avoided emissions between 2005 and 2012, a period during which Brazil managed to cut deforestation in the Amazon by roughly 80 percent.
More funds need to be mobilized. And they won’t come from Greta Thunberg’s friends or enlightened governments like Norway’s (which, uncomfortably, pays for its environmental altruism with taxes on its vast oil sector). To get funding at the necessary scale will require contributions from corporations — including even oil companies — that understand that rainforest preservation is a cost-effective means of fighting climate change.
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To get that capital into the forest, though, requires overcoming two powerful forces: the political right’s opposition to corporations that devote attention or money to societal challenges such as climate change, and, perhaps more importantly, the hostility from the political left — and much of the environmental movement — toward the use of the tools of capitalism to problem solve
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Undaunted, state governments across Brazil’s Amazon region are working hard to woo private money. By next summer, the state of Tocantins is set to issue a first batch of carbon credits under a U.N. verification program known as jurisdictional Redd+. These credits will be bought by Swiss oil-trading firm Mercuria.
Dan Nepstad, a tropical ecologist specializing in the Amazon and who runs the Earth Innovation Institute, pointed out that a number of states in the Amazon are in line behind Tocantins. Pará should have credits to sell in early 2025, followed by Mato Grosso and Acre, then Amazonas and Mato Grosso do Sul. “There is a tsunami of credits coming online,” he said.
But even as state governments across Brazil scramble to set up the infrastructure to monitor and police the exploitation of the forest, a big question mark looms over the compensation mechanism. Nepstad: “Whether there will be buyers.”
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Voluntary carbon markets have gotten a bad reputation over the past year. Several studies concluded that many projects were booking bogus benefits, implying that carbon credits are a waste of time. The critique fed a narrative on the left, wherein carbon credits play the role of blood money — a corrupt means by which capitalism pays to devastate the environment.
The market quickly reacted to activist pessimism. Interest in paying for carbon credits derived from preserving the environment plummeted. Credits covering only 63 million tons of carbon dioxide were issued in voluntary markets in the first 11 months of 2023, down from credits worth 93 million tons in 2022 and 160 million in 2021.
Nepstad and others hope the new institutional architecture will assuage investors’ concerns. They point out that jurisdictional Redd+ credits are entirely different from those in the voluntary market. They are issued by states or countries and are subject to government oversight. And they cover emissions reductions achieved across an entire jurisdiction, rather than estimated gains from individual projects developed by private companies that may have a monetary incentive to overstate their results.
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Environmentalists may argue that the Amazon could be saved without corporate cash infusions. Indeed, during Lula’s first stint in office, from 2003 to 2010, Brazil successfully curbed deforestation with next to no foreign money — mostly via new regulations and penalties.
But political will is hard to sustain in the absence of rewards. As soon as the Brazilian economy slowed, deforestation bounced back. From 2012 to 2021 it nearly tripled, getting back to rates not seen since 2006.
Making sustained progress will require dealing with an unyielding reality: Deforestation produces cheap pasture. If the world is to prevent the wholesale destruction of its rainforests, it will have to compensate farmers. Doing so will cost much more than any one state has at hand.
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It’s hard to ignore the devastation of the Amazon. Images of wildfires burning through the rainforest four years ago felt like an omen of impending planetary doom. Last year’s intense drought, which turned once-powerful rivers into scabs etched into the dirt, has raised the specter of one of Earth’s great carbon sinks devolving from lush forest into savannah.
It will take a lot of investment to turn this trend around. As Brazil’s president, Luiz Inácio Lula da Silva, noted before the United Nations climate summit in Dubai began in November, “There needs to be a volume of resources that perhaps, until today, has never been proposed.”
Timothy Searchinger, a Princeton scholar and expert on forests at the World Resources Institute, pointed out that land use change worldwide, including deforestation, adds up to 5 billion tons of carbon dioxide emitted into the atmosphere annually. Brazil alone emits over 600 million tons of carbon dioxide annually from the exploitation of its forests. Even at a fairly conservative cost of $10 per ton — to compensate Brazil’s farmers to keep the rainforest standing, to restore degraded land, to monitor the forests and develop new models of sustainable farming — would cost $6 billion a year.
Only about $1.7 billion has been channeled to pay for preventing the deforestation and degradation of the Amazon, mostly from Norway via the Amazon Fund set up by the Brazilian government in 2008. This provided compensation for some 300 million tons of carbon dioxide that was kept out of the atmosphere — less than 5 percent of the 6.4 billion tons of avoided emissions between 2005 and 2012, a period during which Brazil managed to cut deforestation in the Amazon by roughly 80 percent.
More funds need to be mobilized. And they won’t come from Greta Thunberg’s friends or enlightened governments like Norway’s (which, uncomfortably, pays for its environmental altruism with taxes on its vast oil sector). To get funding at the necessary scale will require contributions from corporations — including even oil companies — that understand that rainforest preservation is a cost-effective means of fighting climate change.
To get that capital into the forest, though, requires overcoming two powerful forces: the political right’s opposition to corporations that devote attention or money to societal challenges such as climate change, and, perhaps more importantly, the hostility from the political left — and much of the environmental movement — toward the use of the tools of capitalism to problem solve
Undaunted, state governments across Brazil’s Amazon region are working hard to woo private money. By next summer, the state of Tocantins is set to issue a first batch of carbon credits under a U.N. verification program known as jurisdictional Redd+. These credits will be bought by Swiss oil-trading firm Mercuria.
Dan Nepstad, a tropical ecologist specializing in the Amazon and who runs the Earth Innovation Institute, pointed out that a number of states in the Amazon are in line behind Tocantins. Pará should have credits to sell in early 2025, followed by Mato Grosso and Acre, then Amazonas and Mato Grosso do Sul. “There is a tsunami of credits coming online,” he said.
But even as state governments across Brazil scramble to set up the infrastructure to monitor and police the exploitation of the forest, a big question mark looms over the compensation mechanism. Nepstad: “Whether there will be buyers.”
Voluntary carbon markets have gotten a bad reputation over the past year. Several studies concluded that many projects were booking bogus benefits, implying that carbon credits are a waste of time. The critique fed a narrative on the left, wherein carbon credits play the role of blood money — a corrupt means by which capitalism pays to devastate the environment.
The market quickly reacted to activist pessimism. Interest in paying for carbon credits derived from preserving the environment plummeted. Credits covering only 63 million tons of carbon dioxide were issued in voluntary markets in the first 11 months of 2023, down from credits worth 93 million tons in 2022 and 160 million in 2021.
Nepstad and others hope the new institutional architecture will assuage investors’ concerns. They point out that jurisdictional Redd+ credits are entirely different from those in the voluntary market. They are issued by states or countries and are subject to government oversight. And they cover emissions reductions achieved across an entire jurisdiction, rather than estimated gains from individual projects developed by private companies that may have a monetary incentive to overstate their results.
Environmentalists may argue that the Amazon could be saved without corporate cash infusions. Indeed, during Lula’s first stint in office, from 2003 to 2010, Brazil successfully curbed deforestation with next to no foreign money — mostly via new regulations and penalties.
But political will is hard to sustain in the absence of rewards. As soon as the Brazilian economy slowed, deforestation bounced back. From 2012 to 2021 it nearly tripled, getting back to rates not seen since 2006.
Making sustained progress will require dealing with an unyielding reality: Deforestation produces cheap pasture. If the world is to prevent the wholesale destruction of its rainforests, it will have to compensate farmers. Doing so will cost much more than any one state has at hand.
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