Dutch bank arranges Amazon rainforest carbon-conservation deal
Dutch bank arranges carbon-conservation deal in the Amazon rainforest
mongabay.com
November 27, 2007
Dutch bank Rabobank will launch the first-ever carbon credits project in the Xingu region of the Brazilian Amazon, reports The Financial Times. Backers hope the concept could pave the way for future carbon finance initiatives in the Amazon rainforest.
Beginning next month, Rabobank will provide $83,000 to eight soy farms and cattle ranches in the Xingu region in Mato Grosso, the state where most deforestation is presently occurring in the Brazilian Amazon. The money will fund reforestation along waterways and encourage landowners to follow existing environmental regulations passed by the Brazilian government. The projects will be eligible for carbon credits which can then be sold at a rate of $2-15 per ton, depending on the project, to companies or individuals looking to offset their greenhouse gas emissions. Rabobank says it may use the credits to offset its own emissions.
 The Brazilian Amazon |
“The idea is to see how much impact the finance will have on different sizes of farm and where it is most effective,” Daniela Mariuzzo of Rabobank’s São Paulo office told The Financial Times.
If the pilot project is a success, it will likely be expanded to other areas. By some estimates, conserving the Amazon rainforest for carbon offsets and other ecosystem services could be a better use of land than clearing it for cattle pasture (break-even carbon price of $2-5 per ton of CO2), timber (break-even: $0.30-2), or soy farms (break-even: $2.55-6). Carbon offsets through “avoided deforestation” are expected to get a price boost if policymakers develop a legal framework for the concept at next week’s climate meeting in Bali.
The Rabobank-funded initiative is led by the Institute of Amazonian Environmental Research and Aliança da Terra, nonprofit entities working to slow deforestation in the region.
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