Skoll Foundation


New Market Mechanism for Trading Deforestation Compliance in Brazil

December 28, 2012 by

Trading environmental assets could change how farmers and ranchers comply with Brazilian deforestation laws

Today we’re sharing a revolutionary digital tool in the world of deforestation — one of the areas we focus on. Here is  more about it from the Financial Times and MSNBC:

The Financial Times piece highlights ranchers in Paragominas (learn more through our film, “Hanging in the Balance”) —

“Under the Forest Code, if landowners have less than the minimum of forest cover on the their land,  80 per cent in the Amazon region, they must reforest to make up the deficit or buy a credit from another landowner who has more native vegetation than legally required…The potential trade in these credits, officially known as ‘environmental reserve quotas’, or CRAs in Portuguese, is what has got the farmers of Paragominas excited. ‘If we do this, our forests will be protected,’ Mauro Lucio, the cowboy hat-wearing president of the Paragominas farmers union, tells a dinner of local ranchers. ‘They will earn us money and bring good investors into the region.’

The farmers are putting their faith in BVRio, a new market for the trading of environmental assets. Launched on Monday in Rio de Janeiro, BVRio’s first product will be the forest quotas.Started by Pedro Moura Costa, one of the founders of UK-based EcoSecurities – an early developer of greenhouse gas emissions schemes in Europe, the market already has more than 400 registered users. ‘At the average proposed price we’ve seen so far, this could be a nearly half a trillion-dollar market,’ says Mr Costa, estimating the total value of quotas that could be registered.”

Read the MSNBC article, too:

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