Seeing the forests and the trees

I was fortunate to be in Brazil recently and as part of the trip I visited the offices of Carbonext1 in São Paulo, one of the leading companies in the voluntary carbon market space, in this case currently focused on avoided deforestation projects. They are engaged in projects that, in total, are conserving between 1.5 and 2 million hectares of Amazon rainforest. The rainforest itself covers an area of some 670 million hectares, but much of this land isn’t necessarily under immediate threat. Rather, the strategic focus of the company is along the southern border of the rainforest, in effect creating a line of defense against further encroachment northwards. In exchange for their efforts, the company, like many others, sells carbon credits into the global voluntary market, which are then used by all sorts of entities for carbon offset purposes.

This latter practice of selling credits on the back of avoided deforestation has drawn criticism, but particularly by a small number of prominent media outlets which almost seem to have set themselves the task of ending the voluntary carbon market. While it might be fair to debate the philosophical issues around avoided emissions being an offset for actual emissions, the criticisms that are made are more often aimed at the credibility of the projects themselves, rather than how the project carbon credits might be used. The argument that is put forward is that there is no guarantee the trees don’t get chopped down at some later time, or that a similar level of deforestation will just happen somewhere else, such that in reality nothing is truly avoided. But none of this chimes with what I saw when visiting the company’s offices. The capacity that now exists to manage these projects and tackle the issues associated with avoided deforestation inspired me.

When we entered their main office, we were presented with large monitors displaying satellite images of the southern regions of the Amazon, with the company projects almost looking like a string of fortifications that you might have seen had satellite images of the Maginot line been available in 1939. But the next step we saw was truly impressive. Zooming into a particular project, it was suddenly possible to see details of the individual projects, almost down to the tree level. An AI system is used to monitor the project images and as new satellite images are received from the likes of the European Space Agency, differences are instantly highlighted. For example, on one project a red alarm was flashing on the fringe of the project border because the tree cover had started to decline over the last few days. This had already been acted on and it was found that an adjacent landowner had started clearing part of the preserved rainforest. As a result of the detailed monitoring, this activity was flagged and the landowner was immediately contacted by someone in the vicinity of the project. It was ascertained, at least in this case, that a genuine error had been made by the landowner regarding the location of the border. The land clearance was stopped, and the damage was contained to a tiny fraction of the overall project.

The attention to detail and the systems in place to monitor individual projects with a granularity that was probably impossible just a few years ago is impressive. It ought to give everyone confidence that a genuine effort is underway through the voluntary carbon market to limit further land clearance in the Amazon rainforest. But I do wonder if the journalists writing the disparaging articles have done their own due diligence into the current state-of-the-art technologies used to monitor forest cover and manage avoidance projects. From what I saw, it’s difficult to believe they have.

Moving out from an individual project, the totality of the effort is also impressive. A bit like the Maginot line, the string of projects is creating a crucial buffer defense against further clearance, ensuring that the other problem associated with avoidance credits, i.e. different trees just get chopped down somewhere else, doesn’t materialize, or is at least limited. But also like the Maginot line, there is the real possibility of breakthrough because the buffer isn’t big enough or there are gaps in it. In 1939 the Wehrmacht famously bypassed the fortifications that had been built and invaded France through Belgium. And here lies a potential problem in Brazil as well, but I would argue that the fault lies not with those developing the string of projects along the edges of the rainforest, but with those criticizing their efforts. By undermining the efforts of the project developers that are creating the buffer, they could also be undermining the buffer itself as new investors and potential buyers for the offsets shy away. This may then limit future project development, leaving gaps in the effort, which in turn may become weak spots in the overall programme. This string of events then snowballs, creating further criticism (always easier than providing support or offering constructive criticism) which in turn may further limit investment and new projects. It’s time for this to stop.

None of the above is meant to argue that everything rests on the back of voluntary carbon credit companies and their projects, it doesn’t. The Brazil government are clearly stepping up their efforts as well, for example by challenging illegal land clearance. But these voluntary market projects are often taking land that can be legally cleared and providing an incentive to landowners not to do so. All these efforts add up to the critical first steps required to end deforestation in the Amazon, so we need the voluntary carbon market acting in this space as much as we need the Brazil government to limit illegal land clearance. Both are important. Allowing the voluntary market to prosper and invest heavily in avoided deforestation will facilitate the creation of a true and complete line of defense. The end result is that deforestation stops, and everyone’s collective attention and efforts can then turn to reforestation, which also means carbon removal from the atmosphere rather than continued addition.

Note that Shell has a minority stake in Carbonext.

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