By Marcelo Teixeira
NEW YORK (Reuters) – Numerous private Brazilian companies trying to slow the destruction of the Amazon forest are using a large climate conference in New York this week to lure investors to support preservation plans.
Investors are increasingly trying to develop carbon offset credits to help companies and government to meet targets for emissions reductions, which could be a benefit for Brazil.
The Amazon’s preservation is considered key for maintaining the planet’s climate balance, but wide swaths of the forest have been destroyed in recent years due to increased development and relaxed environmental protections.
“The idea is to try a different path, to offer solutions through private investment,” said Luciana Ribeiro, a partner at private equity eB Capital, who helped organize the Brazil Climate Summit at Columbia University, one of the events during the New York Climate Week.
Roughly 7,943 square km (3,066 sq. miles) of the Amazon, the world’s largest rainforest, was destroyed in the January-to-August period, according to deforestation tracking NGO Imazon. That is the most in 15 years, an area roughly the size of the island of Puerto Rico.
Private companies trying to slow the pace of deforestation are distancing themselves from Brazil’s President Jair Bolsonaro’s government, which has been heavily criticized for relaxing enforcement of environmental laws. Bolsonaro faces voters in next month’s election; polls show him currently down to rival and former President Luiz Inacio Lula da Silva.
“We are doing a roadshow here, we need to attract capital. Politics don’t define everything,” said Marina Cançado, chief executive at Future Carbon Group, which is seeking investors for a targeted purchase of 1 million hectares of forested area in the Amazon for preservation. Carbon credits would help finance the venture.
Brazil could generate 10% of nature-based global carbon offsets, or around 1 billion tonnes of CO2 per year, according to a study by Boston Consulting Group (BCG) released this week.
“Preserving forests used to be only about expenses. This is now changing, you can profit from it,” said Henrique Dantas, BCG’s climate and sustainability consultant.
He said the need for carbon offsets is going to soar around the world as corporations seek to neutralize emissions, and preserving and restoring forests constitutes a giant opportunity to generate those credits.
One of the companies, Re.Green, has already raised $80 million with private equity investors; they focus on forest restoration in the Amazon and in Brazil’s Atlantic forest.
Oil major Shell in July said it had invested $40 million into Carbonext, a Brazilian preservation-focused company.
Other companies working with the idea of preserving forest using carbon credits and sustainable management of local economic activities include Nemus Holdings, Biofilica and AYA Initiative, lead by French entrepreneur Alexandre Allard.
(Reporting by Marcelo Teixeira; Editing by Marguerita Choy)
