Rabobank, the Dutch bank that is the world’s biggest provider of finance for agriculture, is preparing to launch a carbon credits scheme to encourage replanting of forests illegally cleared in the Xingu region of the Brazilian Amazon.
Its organisers hope the scheme will become a blueprint for conservation in the rest of the Amazon forest.
In a pilot programme to begin next month, Rabobank will provide R$150,000 ($83,000, €56,000, £40,000) to eight soya farms and cattle ranches in the Xingu region in Mato Grosso state.
The pilot is based on a new, voluntary, conservation-based land registry and is part of broader efforts in the region to bring farmers and ranchers into line with legal requirements to conserve forests on their land.
The Xingu is in the heart of the so-called “zone of destruction” along the Amazon’s southern edge, where vast areas of forest have been cleared over the past two decades.
The scheme will concentrate on forest that has been cut down alongside waterways, contravening legislation and causing erosion and other environmental damage. Some
Awarding carbon credits to projects that preserve or replant forests has become a common conservation practice, giving financial incentives to keep forests intact. Forests act as stores of carbon, and deforestation is responsible for about a fifth of greenhouse gas emissions.
The credits, which each represent a tonne of carbon dioxide, can be sold to companies or individuals wishing to offset their greenhouse gas emissions, and can fetch $2-$15 each, depending on the project.
These credits fetch less than credits issued by the United Nations under the Kyoto protocol. But pressure is growing for forestry projects to be made eligible for carbon credits in any successor to the treaty, and this will be a key topic for debate at the UN talks on climate change in Bali which begin next week.
Landowners often complain that they receive no compensation for maintaining forest on their property, and often illegally clear protected areas. But the programme’s organisers say many are beginning to see the benefits of conservation in securing access to increasingly demanding markets, especially in Europe.
For the purposes of the pilot, Rabobank is effectively donating R$150,000 to the participating properties. If replanting on the pilot properties produces carbon credits – replanting has already been used to generate credits in Brazil and elsewhere – Rabobank will use them to neutralise its own emissions.
If the pilot is successful, the amount of finance offered is expected to rise to several million dollars a year during the next few years and the credits generated will be sold on the voluntary carbon credit market.
“The idea is to see how much impact the finance will have on different sizes of farm and where it is most effective,” said Daniela Mariuzzo of Rabobank’s São Paulo office.
Additional reporting by Fiona Harvey