REDD+ Carbon Credit
In this section:
REDD+ Carbon Credit
Big Lands Brazil excels in the acquisition, set up and management of carbon credit projects for our clients. We work hard to assist our clients with sourcing land that meets the criteria for carbon credit projects. We work in a consulting, management, project acquisition, project setup and post-project set-up management for our clients.
Client Investment Strategy
Big Lands Brazil has created a fund strategy for accredited investors (or equivalent), companies, and funds seeking long-term, consistent returns based on a conservative business plan in surging market of Brazil. This investment is designed as a trusted option to gain access to the emerging market of Brazil in a safe manner, truly unique in the marketplace. The investment is not designed to be creative in taking on unnecessary risk. Carbon Credit and Preservation is a very good investment option. These projects combine land banking, land appreciation, and payment by polluters for forestry preservation.
The Big lands Brazil Strategy:
- The investor owns all land in full either individually or through a corporate or fund structure.
- Land is purchased below market value in areas with strong expected appreciation.
- Big Lands Brazil offers high technical assistance with carbon credit project set up. We work in combination with Eco-System Services LLC, one of the most noteworthy carbon credit project setup companies in the world.
- In addition to having yearly income from the carbon credit sales. The investment can incorporate a low impact sustainable forestry project for additional income.
- The project brings control to the property, and brings control to the vicinity around the property allowing for preservation of the region.
- The investor has several exit options, including selling the project or selling the land.
Big Lands Brazil has worked diligently to design this investment to be more competitive than the competition. The land we source for our clients has a lower price tag, the set up costs are lower and the logistics of the land location are far better than other properties in Brazil. Also, there are no other groups that are present that can set up such large scale projects for foreign investors.
Our Current property offering ranges from 8,000 hectares to 300,000 hectares for carbon credit projects. We only consider working with the most serious and vetted investors.
Please contact us for more details.
About REDD Carbon Credits
What is REDD carbon credits?
Reducing Emissions from Deforestation and Forest Degradation (REDD) is a set of steps designed to use market/financial incentives in order to reduce the emissions of greenhouse gases from deforestation and forest degradation. Its original objective is to reduce green house gases but it can deliver "co-benefits" such as biodiversity conservation and poverty alleviation.
"Reducing emissions from deforestation and forest degradation" implies a distinction between the two activities. The process of identifying the two is what raises questions about how to measure each within the REDD mechanism, therefore their distinction is vital. Deforestation is the permanent removal of forests and withdrawal of land from forest use. Forest degradation refers to negative changes in the forest area that limit its production capacity.
REDD is presented as an "offset" scheme of the carbon markets and thus, will produce carbon credits. Carbon offsets are "emissions-saving projects" that in theory "compensate" for the polluters’ emissions. The "carbon credits" generated by these projects can be used by industrialized governments and corporations to meet their targets and/or to be traded within the carbon markets.
In recent years, estimates for deforestation and forest degradation were shown to account for 20-25% of greenhouse gas emissions, higher than the transportation sector. Recent work shows that the combined contribution of deforestation, forest degradation and peatland emissions accounts for about 15% of greenhouse gas emissions, about the same as the transportation sector. Even with these new numbers it is increasingly accepted that mitigation of global warming will not be achieved without the inclusion of forests in an international regime. As a result, it is expected to play a crucial role in a future successor agreement to the Kyoto Protocol.
In the 1997 global climate agreement, the Kyoto Protocol, policies related to deforestation and degradation were excluded due to the complexity of measurements and monitoring for the diverse ecosystems and land use changes. This exclusion resulted in the formation of the Coalition of Rainforest Nations. Participant nations included Papua New Guinea, Costa Rica and other forest nations.
In 2005, at the 11th Conference of the Parties (COP-11), the Coalition of Rainforest Nations initiated a request to consider 'reducing emissions from deforestation in developing countries.' The matter was referred to the Subsidiary Body for Scientific and Technical Advice (SBSTA). The United States challenged the proposal but failed in its attempts.
Later, at the 2007 Bali UNFCCC meeting (COP-13), an agreement was reached on "the urgent need to take further meaningful action to reduce emissions from deforestation and forest degradation". The deadline for reaching an agreement on the specifics of an international REDD mechanism, at least as regards to its being implemented in the short and medium term, was set to be the 15th Conference of the Parties to the UNFCCC (COP-15), which was held in Copenhagen in December 2009.
REDD activities are undertaken by national or local governments, dominant NGOs, the private sector, or any combination of these. It is being pushed strongly by the World Bank and the UN for setting up the bases for the carbon market and the legal and governance frameworks of countries receiving REDD. A number of NGOs, development agencies, research institutes and international organizations support developing countries that wish to engage in REDD activities. The World Banks's Forest Carbon Partnership Facility, the UN-REDD Program, and Norway's International Climate and Forest Initiative are such examples. The genuine actors of REDD, however, will be the populations whose livelihoods derive from forests. Indigenous Peoples and forest-dependent communities will be the front liners of REDD, and the success of REDD activities will largely depend on their engagement.
There are many corporative and financial lobbies behind the push for REDD. The REDD"+" is more than just avoided deforestation and forest degradation, it also includes the possibility of offsetting emissions through "sustainable forest management", "conservation" and "increasing forest carbon stocks". Some argue that this is opening the door to logging operations in primary forests, displacement of local populations for "conservation", increase of tree plantations. REDD+ is another extension of green capitalism, subjecting the forests and its inhabitants to new ways of expropriation and enclosure at the hands of polluting companies and market speculators.
For example, at the global level, the International Tropical Timber Organization (ITTO) - an intergovernmental body that includes 60 countries of producers and consumers of wood in tropical forests and the European Union, is a key actor in the push to approve REDD+. The ITTO has launched a thematic program on REDD and environmental services with an initial funding of US$3.5 million from Norway. In addition, the 45th session of the ITTO Council held in November 2009, recommended that efforts relating REDD+ should focus on promoting "sustainable forest management". In this regard, this sector’s lobbying seeks above all to include forest extraction inside REDD under the guise of "sustainable management" in order to benefit from carbon markets while maintaining business-as-usual.
On the other side, Indigenous Peoples are an important side of the actors scenario that most of the times is ignored. The International Indigenous Peoples Forum on Climate Change (IIPFCC) was explicit at the Bali climate negotiations in 2007: "REDD/REDD+ will not benefit Indigenous Peoples, but in fact will result in more violations of Indigenous Peoples’ rights. It will increase the violation of our human rights, our rights to our lands, territories and resources, steal our land, cause forced evictions, prevent access and threaten indigenous agricultural practices, destroy biodiversity and cultural diversity and cause social conflicts. Under REDD/REDD+, states and carbon traders will take more control over our forests."
Some grassroots organizations are already working to develop REDD activities with communities and developing benefit-sharing mechanisms to ensure REDD funds reach rural communities as well as governments. Examples of these include Plan Vivo projects in Mexico, Mozambique and Cameroon.
Active international organizations
REDD has received strong support and push from international organizations and IFIs (International Financial Institutions).
The World Bank presently plays an important role in the progression of REDD activities. As one of the financial contributors for the REDD program, the World Bank has created a $300 million fund, the Forest Carbon Partnership Facility (FCPF). So far small grants of $200,000 have been disbursed. This fund is aimed towards initiating REDD activities in developing countries. In addition, another World Bank facility, the Carbon Partnership Facility (CPF), is expected to be used in areas like the power sectors, transportation, urban development and other areas related to energy efficiency where greenhouse gases are generated.
Although the World Bank declares its commitment to fight against climate change, many civil society organizations and grassroots movements around the world view with skepticism the processes being developed under these funds. Among some of the most worrying reasons are the weak (or inexistent) consultation processes with local communities; the lack of criteria to determine when a country is ready to implement REDD projects (reddiness); the negative impacts such as deforestation and loss of biodiversity (due to fast agreements and lack of planning); the lack of safeguards to protect Indigenous Peoples' rights; and the lack of regional policies to stop deforestation. During the UN climate negotiations in Copenhagen (2009) and Cancun (2010) strong civil society and social movements coalitions formed a strong front to fight the World Bank out of the climate.
The UNDP, UNEP and FAO set up the UN-REDD Program, which is aimed at assisting developing countries in addressing certain measures needed in order to effectively participate in the REDD mechanism. These measures include capacity development, governance, engagement of Indigenous Peoples and technical needs. The first initial set of nine countries were Bolivia, Democratic Republic of Congo, Indonesia, Panama, Papua New Guinea, Paraguay, Tanzania, Vietnam, and Zambia. The total number of funds allocated by the UN-REDD Program Policy Board to date is US$ 48.3 million, allocated to eight of these countries. The Program also ensures overall guidance through its global activities on Measuring, Verifying and Reporting (MRV) systems, engagement of indigenous peoples and other forest-dependent communities, and governance; the Program aims for multiple benefits from REDD for livelihoods and ecosystems.
However, among other exclusions, the definition of forests currently adopted by the UN climate change convention (and therefore the UNDP, UNEP and FAO) contains a large loophole: it fails to distinguish between natural forests and plantations, including eucalyptus, pines, acacias, oil palm, and others. Bio-diverse, natural forests could therefore be destroyed and replaced with plantations, but this would not be treated as "deforestation" because - according to the definition - the area would still be covered by trees. The lack of a clear distinction is no accident. Defining a forest simply in terms of tree cover - rather than complex ecosystems and the livelihoods of peoples interacting with them - has long been used as a cover for the expansion of industrial-scale plantations. The most plausible explanation, arguably, is that commercial interests take precedence over environmental and social objectives in the shaping of REDD policy.
The REDD mechanism has been well received by some national governments. At the 2007 Bali Conference, the Norwegian government announced their International Climate and Forests Initiative, which provided $500 million towards the creation and implementation of national-based, REDD activities in the nation of Tanzania. The Norwegian government will work closely with international organizations such as UN-REDD to promote REDD activities in the area. In addition, the Government of Norway and United Kingdom contributed $200 million towards the Congo Basin Forest Fund to aid forest conservation actives in Central Africa.
Australia has joined the efforts to promote REDD mechanisms. Their $200 million International Forest Carbon Initiative focused on developing REDD activities in the region, i.e., in areas like Indonesia, and Papua New Guinea. The governments of Spain and Denmark have recently become donors to the UN-REDD Program.
There have been a few cases of corruption and bribery thus far. In late October 2010, Wandojo Siswanto, a lead delegate in Copenhagen and key architect of REDD, was arrested and charged with accepting bribes of up to US$10,000 from the director of PT Masaro Radiokom, a telecommunications company. In Indonesia, the forestry sector’s reputation has been referred to as "a source of unlimited corruption," by Indonesia’s Corruption Eradication Commission (KPK).
A number of questions are being discussed and will inform the decisions on REDD at the upcoming 16th Conference of the Parties to the United Nations Framework Convention on Climate Change. They include:
Example of forest structure mapping done during ground survey. Similar data are used as a baseline for Monitoring, reporting and verification of forest cover and allows to follow up carbon stock volume in time.
The structure of funding mechanisms
Tying REDD into a broader system of carbon trading could allow developed countries or private firms to offset their own emissions and meet emissions reductions targets. However, some developing countries, such as Brazil and China, maintain that developed countries must commit to real emissions reductions, independent of any offset mechanism.
Setting reference levels to measure the reduction in emissions
Will it be based on current emissions levels or historical deforestation rates, a business-as-usual scenario? Will countries with different forest covers and historic deforestation rates hold different interests in the way the reference levels are constructed? Involving countries with high forest covers and low historic deforestation rates will be necessary to reduce perverse incentives.
Distribution of benefits
How can the benefits from REDD be distributed to forest communities in a just, equitable way that minimizes capture of the benefits by national governments or local elites?
- Participation of Indigenous peoples and Forest-Dependent Communities in the design, implementation and monitoring of REDD activities, and respect for their human rights.
- Strategies to prevent "carbon leakage", caused by the displacement of deforestation to other areas
- Achieving multiple benefits, for example the conservation of biodiversity and ecosystem services (such as watersheds), and social benefits (for example income and improved forest governance).
The availability of a large supply of potentially cheap carbon credits could provide an avenue for companies in the developed world to simply purchase REDD credits without providing meaningful emission reductions at home.
Large number of carbon credits could swamp developing carbon markets... but could also facilitate ambitious emissions targets in a post-Kyoto agreement.
Putting a commercial value on forests neglects the spiritual value they hold for Indigenous Peoples and local communities.
There is no consensus on a definition for forest degradation.
The risk is that baselines are set unrealistically by developing country authorities and it's not actually accurate around the forest's carbon stocks
There's risks the local inhabitants, the communities that live in the forests, will be bypassed and they won't be consulted and so they won't actually receive any revenues.
Some projects are unaccountable and dodgy companies are taking advantage of the low governance.
Fair distribution of REDD benefits will not be achieved without a prior reform in forest governance and more secure tenure systems in many countries.
In 2007, at the Conference of the Parties to the UNFCCC in Bali (COP-13) an agreement was reached called the Bali Action Plan. As defined, its aims are directed toward forest conservation, sustainable forest management and the enhancement of carbon stocks.
REDD-plus calls for activities with serious implications directed towards the local communities, indigenous people and forests which relate to reducing emission from deforestation and forest degradation. Therefore this will involve enhancing existing forests and increasing forest cover. In order to meet these objectives, policies need to address enhancement of carbon stocks by providing funding and investments in these areas.
In 2009, at COP-15 in Copenhagen, the Copenhagen Accord of 18 December 2009 was reached, noting in section 6 the recognition of the crucial role of REDD and REDD-plus and the need to provide positive incentives for such actions by enabling the mobilization of financial resources from developed countries. The Accord goes on to note in section 8 that the collective commitment by developed countries for new and additional resources, including forestry and investments through international institutions, will approach USD 30 billion for the period 2010 - 2012.
For an effective REDD+ mechanism
The complexity of the issue could be better reflected in the way the question of agriculture is approached for the REDD+ mechanism at the international level. Although intensification - in other words the increase in productivity per hectare - is a key variable for long-term forest conservation, the problem cannot be resolved by this alone. The scientific findings previously presented all indicate that there is no simple, unequivocal relationship between changes in agricultural systems and tropical deforestation. However, the major trend to follow undoubtedly remains the increase in yields, without however basing this increase primarily on the provision of chemical inputs that increase the quantity of greenhouse gas emissions.
One solution could theoretically lie in the rapid dissemination of a type of intensive agriculture in certain countries or regions - notwithstanding numerous problematic consequences, for example geographical specialization implying a restrictive approach to the conservation of natural resources for the developing world. This option tends to maximize use of favorable agricultural conditions in certain regions, in order to indirectly preserve other countries or regions with less favorable conditions (a strategy know as "common agricultural pools"). It remains to be determined how a REDD+ mechanism could represent an incentive for this global strategy, in the sense that areas that are unsuited to agriculture would see an economic advantage in reaping the benefits of REDD+ and minimizing their agricultural areas, and vice versa for other regions.
Necessary public support policies
Public support policies are necessary. This may be understood in at least four different ways:
- Fostering changes in agricultural technologies First, it means that we must not count on spontaneous changes in technologies that may contribute to forest conservation objectives. Farmers show a strong tendency to adopt extensive systems when land is abundant in order to compensate for the scarcity of other factors of production such as labor and capital. Consequently, counting on the spontaneous innovation and adoption of new agricultural technologies implies accepting an increase in clearing while forest resources are abundant, and waiting until this resource is almost depleted before farmers attempt to remedy the problem! A certain number of macro tools must therefore be implemented, for example management of the industry, taxation applied to the agricultural sector, or the creation of an area network with agencies responsible for disseminating technologies among their potential users.
- Harmonizing sectoral public policies The second way to interpret the need for public support policies amounts to accepting the importance of harmonizing measures that have a direct or indirect impact on forest cover. These are the "forest-related policies", which include all sectors of activity that have a significant impact: trade, taxation, infrastructure, regional control, and programs encouraging human migration, etc. A strategy that is limited to just one sector of activity - here, agriculture - and not harmonized with the other sectors of activity, such as the construction of road infrastructure, would at best produce mixed, temporary results, and at worst be doomed to failure. Admittedly, some would argue that the "price signal" a carbon market would produce is itself capable of guiding decisions favorable to reducing emissions and therefore the harmonization of policies if this harmonization will lead to the objective being met. This idea is somewhat disconnected from reality, however, and political economy as well as governance issues must also be part of the analysis.
- Adopting the PES principle The third way to interpret public support policies is central. Indeed, some major opportunities exist for giving the principle of Payments for Environmental Services (PES) the position it could well deserve in the future. The beneficiaries of an environmental service establish voluntary contracts with the providers of this service (who control the natural resource) and condition their rewards on the maintenance of the service. In the case in question, PES would consist in measures aimed at conditioning support for the adoption of sound agricultural technologies on the absence of excessive forest clearing on nearby land. Farmers and landowners would thus benefit from the possibility of using technologies capable of increasing their production and income, and at the same time the adverse consequences of forest clearing could be minimized. In other words, the principle is to benefit from REDD+ funding for an ecosystem service (climate regulation through CO2 emissions reductions), in order to foster an agricultural revolution that would serve the interests of poor populations suffering from undernourishment on the one hand, and on the other, would avoid losing precious time in meeting the food challenge (substantially higher global food production by 2050). PES would therefore make it possible to set up contracts aimed at covering the costs of investment and of the transition towards new agricultural technologies.
- Acting on global demand The fourth way to interpret the need for support policies refers to the issue of demand for agricultural products. When production increases, demand also tends to rise in response to lower prices. This is known as the "rebound effect". It is based on the behavior of consumers and their tendency to increase their consumption when purchasing power enables them to do so. It seems there are few remedies to this, since it is undoubtedly unrealistic to restrict consumers in their consumption choices. It is sometimes suggested that action should focus on diets throughout the world, in both developing and developed countries in order to bring demand per capita into line globally, for example by attempting to reduce the share of dairy products and meat. Another alternative envisaged consists in setting up systems that would subject agricultural products to a kind of tax based on their carbon content but the implementation of such a system is still considered to be highly problematic.
- "Bali Delegates Agree to Support Forests-For-Climate (REDD)". Dec 17, 2007. Retrieved 2009-11-23.
- Varghese, Paul (Aug 2009). "An Overview of REDD, REDD Plus and REDD Readiness". Retrieved 2009-11-23.
- Myers, Erin C. (Dec 2007). "Policies to Reduce Emissions from Deforestation and Degradation (REDD) in Tropical Forests" (PDF). Resources Magazine: 7. Retrieved 2009-11-24.
- G.R. van der Werf, D. C. Morton, R. S. DeFries, J. G. J. Olivier, P. S. Kasibhatla, R. B. Jackson, G. J. Collatz and J. T.
- Randerson (Nov 2009). "CO2 emissions from forest loss". Nature Geoscience: 737-738. Retrieved 2009-12-15.
- Butler, Rhett (Aug 2009). "Big REDD". Washington Monthly 41: 2.
- Butler, Rhett (July 22, 2009). "Are We on The Brink of Saving Rainforests?". Retrieved 2009-11-23.
- Richards, Michael (Aug 2009). "REDD: the Last Chance for Tropical Forests?". IDLgroup. Retrieved 2009-11-23.
- "Two New World Bank Facilities Will Help Fight Climate Change and Deforestation". The World Bank Group. Oct 11, 2007. Retrieved 2009-11-23.
- UN-REDD Programme (March 2010). "US$14.7 million approved for three countries at the UN-REDD Programme’s 4th Policy Board Meeting in Nairobi". Retrieved 2010-01-12.
- "The Government of Norway’s International Climate and Forest Initiative". Ministry of Environment. May 19, 2009. Retrieved 2009-11-23.
- "Reducing Emission from Deforestation and Forest Degradation in Developing Countries". UNFCC. Retrieved 2009-11-23.
- Mongobay, "Former Indonesian REDD+ negotiator arrested on corruption charge," 30 October 2010.
- Reuters, "Graft could jeopardize Indonesia’s climate deals," Sunanda Creagh, 17 September 2010
- von der Goltz, Jan (August 10), High Stakes in a Complex Game: A Snapshot of the Climate Change Negotiating Positions of Major Developing Country Emitters, Center for Global Development
- Parker, Charlie; Mitchell, Andrew; Trivedi, Mandar; Mardas, Niki (2009). The Little REDD+ Book. Retrieved 2009-11-23.
- Peskett, Leo; Huberman,David; Bowen-Jones,Evan; Edwards,Guy; Brown,Jessica (Sept 2008). "Making REDD Work for the Poor" (pdf). Poverty Environment Partnership. Retrieved 2009-11-23.
- Participation of forest people to police forests
- International Alliance of Forest People as organisation intrested in policing areas against illegal logging, ...
- International Alliance of Forest People as organisation intrested in policing areas against illegal logging, ... 2
- Butler, Rhett (Mar 5, 2008). "Why Europe Torpedoed the REDD Forest-For-Carbon Credits Initiative". Retrieved 2009-11-23.
- http://www.abc.net.au/news/stories/2010/11/01/3054102.htm?section=justin Carbon offsetting scheme open to corruption, report warns
- Vickers, Ben (Apr 2008). "REDD: a Steep learning Curve". Asia-Pacific Forestry Week. Retrieved 2009-11-23.
- Forest Dialogue (2009). "Investing in REDD-Plus". Retrieved 2009-11-20.
- "Copenhagen Accord of 18 December 2009". UNFCC. 2009. Retrieved 2009-12-28.
- "REDD: Agriculture and deforestation: What role should REDD+ and public support policies play?". Institute for Sustainable Development and International Relations. december 2010.
Brazil Carbon Credits Analysis
- Excellent ROI
- Working to preserve forests and protect forests from destruction
- Carbon sequestration and "the lungs of the world"
- Multiple market end users to buy carbon credits
- Short term Return on Investment
- Relative low setup costs compared to the price of the land
- The land is held as an asset and appreciates along with the carbon credit income
- Carbon Credit projects are relatively new
- Unlimited marketing potential
- Polluters need to purchase carbon credits
Supply and Demand
The current price of carbon credits are expected to increase from the current US$5 dollars per ton to US$20 to US$35 per ton over the next ten years.