By Simon Jessop, Susanna Twidale and Virginia Furness
(Reuters) – A carbon markets investor backed by Swiss-trading house Mercuria said on Wednesday it had joined with two non-profits to raise an initial $1.5 billion to help protect the Amazon, by working with Brazilian states, farmers and local communities.
The ‘Race to Belém’, a nod to the Brazilian city hosting the next round of global climate talks in November, aims to sell credits tied to preserving the world’s biggest rainforest.
The initiative is the first major campaign by Silvania, a $500 million nature and biodiversity investment vehicle, working with Conservation International and The Nature Conservancy.
In an effort to avoid the criticism some previous projects have faced over their real-world impact, the new plan will seek agreement from all levels of government, farmers and impacted communities, and be carried out across a much larger area.
The move follows record high temperatures across the world last year that are pushing the Amazon closer to the point where it becomes a net emitter of carbon emissions, making the world’s agreed goal of capping global warming even harder to reach.
It also comes days after U.S. President Trump pulled the world’s biggest economy out of the Paris accord and against a backdrop of weakening corporate commitments as governments move too slowly to enact policies which will help hit its goal.
Race to Belém Chief Executive Keith Tuffley said after launching the scheme in the Brazilian state of Tocantins, that the hope was that other states would join and the initial $1.5 billion funding target this year would be surpassed.
“The consensus is that private sector engagement is now more critical than ever. The urgency to address climate challenges has only increased, and the Race to Belém highlights this by calling for transformative private investments,” Tuffley told Reuters from Davos, during the World Economic Forum meeting.
To help kick-start the project, Silvania said it would give a dollar in upfront capital to states for every ton in credits purchased, up to a total of $100 million.
The price per ton will be negotiated with potential buyers and could lead to hundreds of millions of tons of carbon savings, Tuffley said. Deployment will begin immediately, with additional phases rolled out over three to five years.
Credits issued under the plan will be classed as a Jurisdictional Reducing Emissions from Deforestation and Forest Degradation, or JREDD+, credit. Existing JREDD+ projects are up and running in countries including Guyana, Ghana and Costa Rica.
Because the baseline reference area being assessed under a JREDD+ project is much bigger, it is easier to track the impact on the environment and local communities than in traditional REDD+ projects overseen by a project developer.
Conservation International Chief Executive M. Sanjayan said in a statement that these credits offered a “generational opportunity to reverse the economic drivers of deforestation”.
“This will be a seismic year for the future of the Amazon. We have a chance to look back on the trajectory of Amazonian protection in two distinct eras: pre- and post-COP30,” he said.
(Writing by Simon Jessop; Editing by Alexander Smith)
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