(Bloomberg) -- Forest carbon credits, which pay governments and private landowners to conserve carbon-rich forests as a way to slow climate change, face mounting criticism for being less effective than advertised.
Brazil’s top climate official is pushing back on their dubious reputation.
“There’s already this story that forest credits don’t count,” Marina Silva, Brazil’s minister of the environment and climate change, told Bloomberg News this week. “Come on — this is an opportunity for those who have forests, because they provide a fundamental service for the balance of the planet.”
In Brazil, fighting deforestation is synonymous with fighting climate change. The country has about 60% forest cover and is home to the majority of the Amazon rainforest. More than half of Brazil’s emissions are tied to changes in land use and deforestation.
Under the country’s former president, Jair Bolsonaro, protections to the Brazilian Amazon were slashed and deforestation reached a record high. The government of President Luiz Inácio Lula da Silva is working to reverse that trend.
Large companies including Amazon.com. Inc. and Microsoft Corp. have recently purchased carbon credits in Brazil, and the country’s legislature has proposed a bill that, if passed, would launch a domestic emissions-trading scheme. Brazil will host the Group of 20 in November and the United Nations climate summit COP30 in 2025.
“Last year, we reduced deforestation by 50% and this year by another 45.7%,” Silva said in an interview. “By 2026, when Lula’s term ends, we have to leave a coefficient equivalent to zero deforestation in 2030, which is perfectly possible if this trajectory is maintained.”
Doing that, though, may require putting in place additional financial incentives such as carbon credits.
Each carbon credit represents a ton of carbon dioxide emissions either removed from the atmosphere or, in the case of forests, stored in vegetation and not added to the atmosphere. Companies, governments and others can sell forest carbon credits to groups looking to offset their own emissions. But the credits have not always worked as intended: Investigations have pointed to flawed accounting and exaggerated claims. A growing number of companies, including Alphabet Inc.’s Google, have started to move away from carbon credits as part of their corporate climate strategies.
While they concede that low-quality forest credits are a problem, some climate experts say well-designed ones are nevertheless crucial. “We need to make the economic value of standing trees reflect the value to society and to the world. And carbon credits can help do that,” said Nathaniel Keohane, president of the environmental think tank Center for Climate and Energy Solutions.
Those kinds of credits can be a lifeline for the communities that rely on them and a form of “climate justice,” Silva said.
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