NEWS

Clarissa Lins participates in Shell Talks panel about nature-based solutions

Engage
October 2021

NEWS

On October 5th, Clarissa Lins, founding partner of Catavento, participated in a Shell Talks panel entitled “Nature-based solutions and carbon markets”. The debate was moderated by Pedro Dória, columnist for GLOBO, and had the participation of Alejandro Segura, Shell’s General Manager Nature-Based Solutions for Latin America, and Eduardo Bastos, Head of Sustainability at Bayer Latin America. Below are some highlights of Clarissa Lins’s participation.

 

Nature-based solutions (NBSs) are an economical way to remove carbon from the atmosphere, strategy that is essential for hard to abate sectors. While the cost for NBSs projects for carbon capture (eg. reforestation) is around US$8/tCO2e [1], technological solutions for carbon capture prove to be considerably more expensive, such as CCUS (up to US$125/tCO2e ) and DAC (prices above US$300/tCO2e)[2].

Brazil can benefit from NBSs for several reasons that go beyond their role in combating climate change, such as improving air quality, increasing water availability, protecting biodiversity, in addition to generating a bioeconomy based on forest-compatible products, which studies indicate could generate up to US$2.3  bn in revenues (vs. current US$298 mn) to the country [3].

Brazil represents approximately 20%[4] of the global potential for the development of NBSs projects, mainly due to its natural forests vocation and territorial extension. One of the ways to leverage funding for these projects is via carbon markets.

A considerable increase in the demand for carbon credits is expected with the increase of net zero commitments, adopted by more than 1500 companies[5] and by countries that represent 70% of global GDP and CO2 emissions[6]. The Taskforce on Scaling Voluntary Carbon Markets (TSVCM) estimates that the annual demand for credits may grow approximately 15 times by 2030, reaching 2 GtCO2 and about 100 times by 2050, at about 7 GtCO2 and 13 GtCO2 [7]. Regarding the current situation of the voluntary markets, data from Ecosystem Marketplace[8] indicate that the voluntary market reached US$748m in transacted value in 2021. This value represents an increase of 58% compared to 2020 (US$473m) . Experts point out that the market value should reach $1 billion by the end of the year. In terms of transacted volumes, the year 2021 already presents a 27% growth compared to 2020, reaching around 240 MtCO2e.

Finally, Clarissa stated that to take advantage of the growing opportunities and position itself well in the global market for carbon credits, Brazil must, among other factors, eliminate illegal deforestation in its territory and move forward in meeting its NDC goal of reforesting 12 million hectares by 2030[9], in order to reposition itself in relation to the integrity of Brazilian carbon credits in front of the most demanding buyers.

 

References:

[1] ECOSYSTEM MARKETPLACE. State of Voluntary Carbon Markets 2021. 2021

[2] IEA. Is Carbon capture too expensive?. 2021

[3] AMAZÔNIA 2030. Como impulsionar o desenvolvimento econômica da Amazônia?. 2021

[4] RONALDO SEROA DA MOTTA. Oportunidades e Barreiras no Financiamento de Soluções Baseadas na Natureza. 2020

[5] DATA DRIVEN ENVIRONLAB AND NEW CLIMATE INSTITUTE. Accelerating Net Zero. 2020

[6] IEA. Net Zero by 2050 – A roadmap for the global energy sector. 2021

[7] TSVCM. Final Report.2021

[8] ECOSYSTEM MARKETPLACE. State of Voluntary Carbon Markets 2021. 2021

[9] MMA. REDD+ e a NDC do Brasil. 2016

Photo: Valor Econômico

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