Climate change represents one of the greatest threats to the future of our planet and, therefore, society has demanded that urgent and effective actions to reduce the concentration of Greenhouse Gases in the atmosphere be taken by governments and the private sector.

International negotiations and agreements, established since the United Nations Framework Convention on Climate Change, ratified in 1994, and the Kyoto Protocol, ratified in 2004, and finally, the Paris Agreement, ratified in 2015, created the indispensable legal and regulatory instruments to promote the transition to a low-carbon society.

These agreements also created innovative marketing mechanisms to financially encourage entrepreneurs who promote the reduction of Greenhouse Gas emissions or the removal of carbon dioxide already emitted into the atmosphere.

In the Kyoto Protocol there were three carbon market mechanisms: Emissions Trading, Joint Implementation and the Clean Development Mechanism. The first two mechanisms were created only for the 39 developed countries (called Annex one), which had mandatory targets to meet, but they could additionally acquire carbon credits from other countries (non-Annex one), such as Brazil.

This provided the opportunity for the development, registration and execution of more than 8 thousand projects to reduce and remove Greenhouse Gases around the world by 2020. Brazil was the third largest generator of credits in this “regulated carbon market”, second only to China and India. Many projects got off the ground and made contributions to climate mitigation and sustainable development, in addition to raising important financial resources through the sale of carbon credits, called Certified Emissions Reductions in the Clean Development Mechanism. The global regulated carbon market was worth around 200 billion dollars per year at the peak of the Kyoto Protocol period.

After the experience of the Clean Development Mechanism, Brazilian entrepreneurs understood that our country has countless sectors and activities capable of generating carbon credits, bringing environmental, economic, professional and technological opportunities. This is when the so-called “voluntary carbon market” emerges, given the gap created between the not very smooth transition from the Kyoto Protocol to the Paris Agreement. In this voluntary market, there are no goals or government entities or international organizations, such as the United Nations, regulating the market. It is private and reputational, that is, organizations develop projects and generate carbon credits, freely, in any country, and can sell them to other organizations that wish to offset their emissions.

The objective is not to comply with regulations, but rather to position oneself appropriately with interested parties. This market is the one that operates with the greatest volume today throughout the world, including in Brazil, one of its protagonists.

At this moment, we are experiencing the imminent creation of the Brazilian regulated carbon market, through the approval by the Federal Senate of Bill 412, which establishes the Brazilian Greenhouse Gas Emissions Trading System and provides other measures. In this national carbon market, the largest emitters must calculate and report their emissions and removals, as well as present reduction and compensation measures, transacting carbon credits.

But how can the forest system participate in this national carbon market and, eventually, in global regulated markets and the voluntary carbon market?

In the most varied ways, developing projects and generating carbon credits to be consumed by agents who are unable to reduce their Greenhouse Gas emissions, whether regulated by international treaties, Brazilian legislation, or the reputational voluntary market.

To generate carbon credits suitable for the market, the forestry system must advocate the development of eligible, additional and high-integrity projects. They must promote real, measurable and long-term benefits, in commitment to the climate cause, in addition to promoting other social and environmental co-benefits, especially for communities and biodiversity.

The most relevant project types for the carbon market today are the so-called nature-based solutions, into which forestry projects fit perfectly. Nature-Based Solutions projects, as opposed to technological projects, such as energy, industrial and waste projects, are highly appreciated in the market today.

Among these types of projects, some deserve to be highlighted:
• REDD plus or Reduction of Emissions from Deforestation and Forest Degradation: this involves the avoidance of Greenhouse Gas emissions by conserving a forest area, managing it and increasing carbon stocks;
• Afforestation, Reforestation and Revegetation : is the regeneration of an area devoid of forest vegetation, whether by conventional planting with seedlings or other forms of regeneration (including assisted natural regeneration) with the aim of increasing carbon stocks through tree growth, promoting “biological removal” of carbon;
• Removal: this involves the growth of native vegetation preserved with the aim of maintaining its regeneration dynamics. The logic in this case is different from REDD plus projects, in which carbon credits are calculated based on the amount of Greenhouse Gases avoided due to avoided deforestation. In the case of “removal” or removal of carbon dioxide, the generation of carbon credits results from the growth of the forest;
• Blue Carbon: Which prevents the emission of Greenhouse Gases or promotes the removal of carbon dioxide in humid areas, such as mangroves, wetlands, etc.;
• Others: There is a wide range of other carbon projects that can be developed. Examples: consortium systems (Integration of Crops, Livestock and Forestry), energy replacement with biomass, production and application of biochar (biochar), among others.

Ultimately, the forest system has many opportunities and enormous potential to contribute to climate mitigation, in addition to promoting the well-being of humanity, in addition, of course, to generating income, jobs and foreign exchange. More than that, the forest system, through its role in the carbon market, has a crucial role in promoting long-term sustainability and, thus, the very survival of humanity.

It is then up to the forestry system to act incisively in this huge market that is emerging. Professionals, companies and the third sector that work with forests have a golden opportunity on their hands. Conquering this space is a matter of taking advantage of these opportunities, transforming them into opening new business fronts for the forestry system, without making a distinction between planted and native forests, forests for the production of wood (or other products) and for environmental protection.

There are opportunities for everyone.