Brazil, paradise for carbon credits ? But what about Indonesia and Papua New Guinea?

Brazil has become a reference in climate issues. Among the reasons is the great potential for generating carbon credits on a relatively low-cost scale, through natural solutions. And as the topic has definitely entered the agenda of companies, Boards of Directors and executives, the market for Mergers and Acquisitions (M&A) in Brazil is agitated. According to The Shift, the three main companies that work with carbon credits were recently acquired or invested: Biofílica was acquired by Ambipar, WayCarbon had its control acquired by Grupo Santander and CarbonNext received an investment from Shell. And other groups have also entered the carbon market such as Minerva Foods, which created MyCarbon. In addition, major international players such as SouthPole (recently invested by Salesforce) and Ecosecurities (Hartree's partner in a billion-dollar reforestation program) are increasingly turning their eyes to Brazil. Click here for the original article by The Shift (this is exclusive content for subscribers and you can register for free and have access to 5 content per month). But there is "another side of this coin", worth a warning: the recent restrictions in Indonesia and Papua New Guinea on the trading of carbon credits originated in the preservation of their tropical forests, known as REDD+. According to these countries, although these projects help with funds to protect forests, there is a relevant risk: of double counting of reductions, of simultaneous accounting of mitigations by the country of origin of the credit and by the country of destination. In other words, once the problem of double counting in the emission reductions account is confirmed, countries may eventually have to reduce emissions in their own economic sectors (in enough volume to offset what was sold!) or even have to buy carbon credits from other countries. Click on the image below to read more about this, article from S&P Global Commodity Insights (free registration).