Carbon trading offers huge opportunity to reduce deforestation
Mario Monzoni, the Director of Brazil’s green economy university has said that cap and trade will be the key to reducing deforestation.
Mario Monzoni, the Director of Brazil’s green economy university has said that cap and trade will be the key to reducing deforestation. The market is set to expand rapidly over the next eight years, according to many economists.
"We spend most of our days talking about cap and trade in Brazil," he said. "We need some conditions to do it, such as carbon inventories, which help to create the demand for credits.
"Nobody wants to be on the demand side. Everybody wants to sell. If there's no demand there'll be no market. But I believe in the next eight years in Brazil, we're going to develop a huge cap-and-trade market for carbon."
With deforestation accounting for 80 per cent of Brazil’s emissions, it is no surprise that cap and trade could offer a means to reduce deforestation, and indeed, it will have to if the country is to achieve sizable emissions cuts.
Carbon trading’s first government backed scheme has just opened pre-registrations for a new forestry credit market. Whilst maintaining a minimum amount of vegetation on their land, the scheme will allow those with more than the minimum to sell it as a carbon credit to those with less than the minimum.
"I believe it will be the biggest way of driving down deforestation," said Monzoni. "There are two ways: either people don't deforest because it is not right, but I don't think we have reached this level of civilisation yet, or we need our second-best solution which are economic instruments, such as taxation and permits. I think in Brazil we're going to work much more on permits in cap-and-trade than taxation." He is also keen on a carbon market based around carbon intensity.
The progress in Brazil is encouraging, yet carbon trading does have its detractors. Administration and proper planning and implementation are essential in order to create a successful scheme.