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Observer
21-07-2025
- Politics
- Observer
Brazil's moment to lead on forest conservation
With greenhouse-gas emissions still rising globally and nature loss continuing apace, the Amazon rainforest is approaching a tipping point. To avert climate catastrophe, the world must make rapid and significant progress on protecting forests and building a sustainable, inclusive bioeconomy. And Brazil must lead the way, starting at this November's United Nations Climate Change Conference (COP30) in Belém. The Amazon represents one of the planet's most powerful defences against climate change. It is more than a carbon sink; it is a reservoir of biodiversity, a regulator of rainfall across South America, and a vital component of our planet's climate system. As the custodian of nearly 60 per cent of the Amazon, Brazil has not only a responsibility to be a good steward, but also an opportunity to demonstrate global leadership at a pivotal moment for people and the planet. Brazil seems to recognise this. The government's renewed commitment to forest protection, under President Luiz Inácio Lula da Silva's administration, is reflected in a sharp decline in deforestation rates. But this is just the beginning. Brazil is also working to deliver the bold ideas, scalable finance, and robust partnerships that the global green transformation demands. Nature-based solutions — which simultaneously advance environmental imperatives and ensure sustainable economic growth — are central to this effort. Recognising that the preservation of existing nature produces the fastest, most cost-effective results, these solutions are typically based on three pillars: protect, restore, and manage. To protect forests, Brazil is advancing innovative approaches, both domestically and internationally. At home, the country is helping to pioneer a jurisdictional approach, which links carbon finance to state-level action to protect forests, as part of the UN Framework Convention on Climate Change's framework for 'reducing emissions from deforestation and forest degradation in developing countries' (REDD+). Brazil's jurisdictional REDD+ programmes reward regions for reducing deforestation, enhancing forest carbon stocks, and ensuring that benefits reach indigenous peoples and local communities. The state of Tocantins is a worthy example: its forest-protection programme, which aims to generate high-integrity carbon credits, has been shaped by inclusive public consultations and features strong governance. An initial issuance of jurisdictional REDD+ credits is expected early next year. At the international level, Brazil has proposed a $125 billion Tropical Forest Forever Facility, which would reward developing countries with historically low rates of deforestation and compensate them for upholding good stewardship. Unlike carbon markets, which focus on verified reductions in emissions, the TFFF would provide predictable, long-term payments to countries based on the number of hectares conserved. These two approaches are highly complementary. Jurisdictional programmes address the imperative of reducing deforestation now through performance-based finance, while the TFFF offers the steady, long-term support that is needed to sustain those gains. Together, they correct a critical market failure: the undervaluing of standing forests. Forest protection is not easy: it demands rigorous oversight, transparent benefit-sharing, and unwavering community engagement. But when done right, it can unlock significant climate finance, catalyse private-sector participation, and drive sustainable development. The Race to Belém initiative, of which I am CEO, aims to make the most of this potential by mobilising a huge amount of private-sector investment for forest protection in advance of COP30. But protection is only the first pillar. Brazil is also making strides in nature restoration and sustainable land management. It has set a number of ambitious goals, including restoring 12 million hectares of forested areas by 2030; converting 40 million hectares of degraded pastureland into productive systems for food, biofuels, and high-productivity forests over the next decade; and promoting a bioeconomy that respects nature and people. The Brazil Restoration and Bioeconomy Finance Coalition, which seeks to mobilise $10 billion in private investment by 2030, underscores the growing role of the business sector in this process. Far from just another diplomatic gathering, COP30 is shaping up to be a defining moment for climate action – and, in particular, forest preservation, restoration, and management. With Belém located on the edge of the Amazon, delegates will be immersed in the landscape they seek to protect. More importantly, their host will present them with a menu of proven nature-based solutions – behind which political momentum and private-sector support are already building – that address the many causes of forest loss. The foundations for transformative action are already in place. The challenge will be for Brazil to build on its success in harnessing national policy, sub-national action, and private-sector engagement to accelerate progress and spearhead a new global model of climate action. Copyright: Project Syndicate, 2025. Keith Tuffley, Tuffley, a former head of investment banking, partner, and board member at Goldman Sachs Australia, is CEO of Race to Belém, a group campaigning to raise finance for forest protection in Brazil.
Express Tribune
11-05-2025
- Business
- Express Tribune
Earning carbon credits in Pakistan
Listen to article Pakistan, being a Non-Annexe country party to the United Nations Framework Convention on Climate Change (UNFCCC), qualifies to earn carbon credits for various eligible activities. The carbon financing and Reducing Deforestation and Degradation (REDD+) are new and emerging areas that Pakistani experts have yet to understand and exploit. Therefore, enabling initiatives such as the REDD+ activities were established at the international level, which Pakistan has also benefited from in terms of establishing an enabling environment and capacity building. Other initiatives include, Methane Pledge led by the USA and also joined by Pakistan, the National Adaptation and Mitigation Actions (NAMA) facility and similar other initiatives that are aimed at supporting Pakistan to understand and embark on earning carbon credits. Pakistan, with around 5% of the total land area under forests, initiated REDD+ activities in 2010 to mitigate climate change through reduced carbon emissions from the forestry sector. Pakistan received REDD+ Readiness financial support from the Forest Carbon Partnership Facility (FCPF) of the World Bank for readiness preparations. In Pakistan, REDD+ is an important component supporting the National Climate Change Policy, National Development Vision 2025, and the National Forest Policy. These components, and specifically the preparation of the National REDD+ Strategy (NRS). Pakistan has gone through the REDD+ readiness process and is set to undertake carbon sequestration projects. Pakistan, with a very limited contribution of only 0.28% of the CO2 emissions, is the 7th most vulnerable country to the impacts of climate change. Floods, droughts, Glacial Lake Outburst Flood (GLOF), and other climate-triggered disasters are more common now than ever before. As carbon credits can be earned in two major ways, such as carbon credits that are bought and sold via a cap-and-trade system (Compliance market), and secondly, the Voluntary market, where carbon offsets can be traded by anyone under a voluntary market mechanism. The voluntary market is open to any entity, and even individuals, to earn carbon credits for eligible activities. It includes all businesses and people who aim to decrease their carbon footprint. One of the main challenges in the voluntary carbon markets is the lack of standardisation, integrity and transparency. Without clear standards for carbon credits, it can be difficult for companies or individuals to know whether they are truly reducing their emissions. The most prominent reason why carbon projects fail is that they are not additional to the business as usual, meaning that the project does not contribute to achieving additional climate benefits, compared to if the project had not existed. This can happen when carbon credits are issued by protecting forests which were never in danger. In addition, Pakistan lacks capacity, technical experts and resources to develop the carbon credit proposal as per the international standards and requirements. Article 6 of the Paris Agreement to the UNFCCC permits countries to collaborate voluntarily, utilising carbon markets as a means to fulfil their NDCs and raise their ambition level, while ensuring environmental integrity and promoting sustainable development. Articles 6.2, 6.4, and 6.8 provide guidelines for the creation and verification of carbon credits and safeguards against double counting. COP26 committed to establishing international standards for such markets. One of the good news for Pakistan is that it has developed Policy Guidelines for Trading in the Carbon Market; however, most of the proponents still lack technical skills to fully harness the benefits of such opportunities. These new and emerging areas require technical support, which is not only lacking but may require a great deal of financial resources. In addition, the voluntary carbon market is also loaded with an increased quantity of taxes on such earnings from carbon markets as envisaged in the Policy Guidelines for Trading in Carbon Market, which are given below: 5% of the credits generated by the project shall be deducted at source, in the form of credits, preferably to be adjusted towards Pakistan's voluntary NDCs. Corresponding Adjustment Fee (CAF) calculated at 12% of net revenues generated from the sale of carbon credits. 50% of the CAF shall be directly transferred to the province where the project is based. Remaining portion (50%) of the CAF will be credited in Pakistan Climate Change Fund, to be used for climate change initiatives across the country, in consultation with the province where the credits are generated, giving preference to initiatives within the province, barring climate induced emergencies/exceptional circumstances to be determined by the Pakistan Climate Change Council. Administrative Costs, equating to 1% of gross revenues generated from the sale of carbon credits, will go to the Federal Government. The utilisation of CAF will be guided by the principles of sustainability, equity, and effectiveness in reducing greenhouse gas emissions while advancing sustainable development. In the presence of such huge taxation and fees, the Voluntary Carbon Market would not be able to claim any carbon credit. Instead of facilitating the development and submission of carbon credit proposals, the newly approved Policy Guidelines for Trading in the Carbon Market have imposed very high taxes that the proponents are not able to pay, coupled with increased cost of hiring international experts for developing the carbon credit proposals. This will certainly block the way to earn carbon credit for Pakistan and therefore, unlike other developing and non-Annexe parties to the UNFCCC, Pakistan may not avail the benefit from the carbon trade market. Way forward The Designated National Authority (DNA) of the UNFCCC and Carbon Financing in Pakistan, that is the Ministry of Climate Change and Environment Coordination, shall focus on the following points, aiming at developing and submitting successful carbon credit proposals: Review and remove all the taxes proposed in the Policy Guidelines for Trading in the Carbon Market. An invitation calls for registration and expression of interest in earning carbon credits from forestry, solar, brown energy, biogas, wind, hydropower, and other such renewable resources. Develop a database of voluntary and compliance market carbon credit registration in Pakistan at the individual, company, and corporate levels and facilitate them. Develop the capacity of the concerned agencies and the private sector for developing and processing carbon credit proposals. Connect the private sector overseas buyers and sellers from Pakistan under a voluntary market and display all such listings of international carbon credit buyers on the DNA website. Provide all the required services and expertise to the carbon credit-earning entities in Pakistan. The writer holds Ph.D in Forestry and is a climate change, forestry and environment expert
