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World Soil Day: Celebrating the Support of Life

^{Author Marcos Siqueira-Neto, Specialist in Agriculture Carbon Projects}

Today (12/05) we celebrate World Soil Day, on this date we must remember the profound importance of this resource for life on Earth. Soil is essential for all forms of life; it is the true foundation of the planet. It supports vast forests or small urban gardens; in different environments and landscapes it is essential for the ecosystems and human well-being.

Soil: More Than Just a Surface Layer

Although “land” and “soil” are often used as synonyms, they have distinct meanings: According to the Food and Agriculture Organization of the United Nations (FAO)[1], land represents the territory, the solid mass or the physical portion that makes up the planet’s crust, with its rocks, minerals and other layers that physically support us.

Soil is much more than a surface, it is an active layer, result of natural processes of rocks transformation, called weathering. This process is influenced by climate, relief, source material (elements and minerals in rocks), organisms’ activity and time. The complex combination of minerals, organic matter, air, water and living organisms gives characteristics that differentiate soil types. Soil can also take on different meanings, depending on perspective:

Geologist: soil is the product of millions of years of geological processes of decomposition and sedimentation. It represents the layer resulting from the physical, chemical and biological interaction between rocks, climate and organisms, which connects the Earth’s crust with life on the surface.[2].

Agronomist: soil is a work tool, a living and productive resource, where seeds become crops, and harvests generate food and wealth. It provides nutrients, water and support for plant cultivation, and which must be conserved to ensure the sustainability of agricultural production.
Ecologist: soil is much more than a layer of mineral and organic material; it is an ecosystem. A matrix that houses enormous biodiversity, and a regulator of ecological processes that recycles nutrients, stores water and filters contaminants, in addition to contributing to climate regulation, especially through carbon sequestration.
Artist: soil is a sacred tissue, the Earth’s womb, a place of mystery and fertility. It is the guardian of stories, where seeds flourish, giving rise to man himself, a symbol of growth, belonging and rebirth.

Brazilian Soil Classes

Brazil has a vast territorial extension and has a great diversity of soil. Among the main Soil Classes, we can highlight:

Latosols cover about 39% of the territory, with extensive areas in the Amazon and Cerrado. These are deep, well-drained soils, mostly with low natural fertility, and occur in areas of slight slope, in flat to undulating relief. They are highly suitable for agricultural use, are favorable to mechanization, and can be highly productive with adequate management.
Argisols occupy about 24% of the territory and are common in the South and Southeast regions. These soils have a clayey texture in the subsurface and a medium texture on the surface. When this textural gradient is accentuated, this soil becomes more susceptible to erosion, requiring conservationist management practices.
Neossolos, which are found in 13% of the territory, are poorly developed soils, with a thin surface layer that is conditioned by their organic matter content. These soils are considered to have low agricultural suitability, as they have low water and nutrient retention. Management practices that maintain or increase the organic matter content can reduce this problem.

Other classes with lower occurrence include: Plinthosols[6] (6% of the Brazilian territory); Gleissolos[7] (4%); Luvisols[8] (3%); Cambisols[9] (2,5%); Spodosols[10] (2%); Planossolos[11] (2%); Vertisols[12] (2%); Nitosols[13] (1,5%); Chernosols[14] (0,5%); and Organosols[15] (dispersed occurrence).

Each soil class has characteristics that influence its use and management. In Brazil, zoning and land use suitability have their own legislation, which aims to align urban and rural development with environmental preservation and sustainability, ensuring conscious use of ecosystem services and the carrying capacity of each soil type.

^{Soil Map of Brazil}
^{Source: https://www.embrapa.br/tema-solos-brasileiros/solos-do-brasil}

^{Agricultural Use Potential Map}
^{Source: https://www.aen.pr.gov.br/sites/default/arquivos_restritos/files/documento/2022-12/0512mapa.pdf}

Ecosystem Services and Land Use

Soil is one of the main providers of ecosystem services, which are fundamental to human health and well-being. Among many, we can highlight soil as the support for the establishment of buildings and agricultural crops; the biogeochemical cycle of nutrients and carbon, the production of food, materials and bioenergy; source of minerals; purification and regulation of the water cycle; climate regulation; habitat for a vast diversity of organisms; and its value as landscape, recreation, cultural and spiritual resources. Given so many ecosystem services, it is correct to state that soil is a valuable economic resource.

Agriculture is a sector of great economic importance, generating jobs, income and exports. Thus, the appropriate use of soil through sustainable management practices ensures soil health, and its conservation generates economic value. On the other hand, intensive use without care causes the degradation of physical, chemical and biological attributes, leading to soil depletion and, consequently, the loss of productive capacity. Therefore, it is necessary to find a balance so that productive activity contributes to the economy without compromising soil health.

In addition, soil stores carbon in the form of organic matter, reducing carbon emissions for the atmosphere. When the soil is well managed, its organic matter is preserved and mitigates climate change. However, inadequate agricultural practices and deforestation can release stored carbon back into the atmosphere, contributing to global warming.

^{Soil Ecosystem Services}
^{Source: https://openknowledge.fao.org/server/api/core/bitstreams/eaecf793-d0cb-4ac4-a4fc-b98dbe0065f0/content}

Suitable Soil Management is a Nature-Based Solution

Soil is the largest terrestrial carbon reservoir, storing three times more carbon than the atmosphere and vegetation combined[16]. As such, it plays a central role in mitigating climate change and its proper management is considered a powerful Nature-Based Solution (NBS).

The conscious use of this resource as an NBS is associated with the adoption of management practices that aim to improve soil health[17], with an increase in organic matter, ensuring the sustainability of agricultural production. The adoption of conservation management practices that reduce surface layer movement and include permanent soil cover maximize carbon sequestration and increase its resilience.[18].

In this sense, we recommend management techniques such as no-tillage, crop rotation, organic/green fertilizer, and the adoption of integrated systems (e.g., crop-livestock-forestry) and/or agroforestry that enrich soil, promote carbon sequestration, and reduce atmospheric CO₂ while also favoring agricultural production[19]. In addition, the restoration of degraded soils, especially in pastures, is also a powerful strategy for capturing carbon, while restoring biodiversity and productivity[20], and with an indirect “forest-saving” effect.

Among the challenges we see is that the lack of standardized methodologies and the high cost of measuring and monitoring carbon in the soil make it difficult to implement initiatives such as agricultural carbon credits. Even so, new technologies for soil analysis are being developed to facilitate this process. We believe that a regulatory framework and adequate incentives, such as carbon credits and payments for environmental services, can encourage rural producers to promote soil as a strategic ally in climate mitigation, in addition to promoting food and economic security.[21].

^{Soil aggregate filled with organic material}
^{Source: https://brasil.mapbiomas.org/wp-content/uploads/sites/4/2023/08/MapBiomas_Solo_JUNHO_2023_21.06_OK_Alta__1_.pdf}

Final Considerations

Soil conservation is essential for food security and for maintaining ecosystems. Brazil, with its vast expanse and diversity of soils, has a strategic role in promoting sustainable agricultural practices, also taking advantage of the carbon credit market and payments for environmental services to offset conservation costs.
Biofílica develops NBS projects that advocate the conscious use of this valuable resource through the adoption of sustainable management practices that aim to improve soil health and generate carbon credits. To this end, we use the best certification methodologies and standards available on the market, which ensure the generation of positive impacts on the climate, society and the environment. Therefore, on this World Soil Day it is worth reflecting on the use and conservation of our soils, and we invite everyone to value and protect this vital resource for our future and that of the planet.

^{Map promotes more sustainable soil with programs for land management}
^{Source: https://www.gov.br/agricultura/pt-br/assuntos/noticias/mapa-impulsiona-solo-mais-sustentavel-com-programas-para-o-manejo-da-terra}

Do you have any questions or want to discuss the topic further?

Our team has highly experienced technical professionals
who are fully available to provide additional explanations.

^{[1] FAO (2021). The State of the World’s Land and Water Resources for Food and Agriculture – Systems at breaking point. Synthesis report 2021. Rome. DOI: 10.4060/cb7654en.}^{Birkeland, P.W. (1999). Soils and Geomorphology. New York: Oxford University Press. p. 430.}^{[3] Brady, N.C., & Weil, R.R. (2010). Elements of the Nature and Properties of Soils. Pearson. 614p.}^{[4] Wall, D. H., et al. [eds.] (2012). Soil Ecology and Ecosystem Services. New York: Oxford University Press, p. 424. DOI:10.1093/acprof:oso/9780199575923.001.0001.}^{[5] Plinthosols are found in flat and gently undulating relief, in depressed areas, alluvial plains, and situations involving slow water drainage from the soil. They are characterized by imperfect drainage and cycles of iron reduction and oxidation with the formation of plinthite and/or petroplinthite (concretion). These soils are poor in organic matter, frequently acidic, and have low natural fertility.}^{[6] Gleisosols are found in areas with drainage restrictions, such as near watercourses, floodplains, and lowlands. They are formed by clayey or very clayey material in a water-saturated environment, poorly drained (hydromorphic).}^{[7] Luvissols are found in the Northeast, distributed in the semi-arid zone. These are shallow soils with high natural fertility, characterized by a significant increase in clay content in subsurface horizons.}^{[8] Cambissols have wide distribution across all biomes. These are moderately developed soils, shallow, with wide variation in chemical and granulometric composition.}^{[9] Spodosols are typical of coastal zones, sandy, with organic matter deposits at depth, very acidic, and poor in nutrients.}^{[10] Planosols have a well-developed surface layer and a compacted, poorly drained subsurface layer.}^{[11] Vertisols are predominant in the northeastern semi-arid region. These clayey soils have a high water retention capacity but are prone to cracking in dry periods.}^{[12] Nitossols are deep soils with clayey or very clayey texture, well-drained, moderately acidic, and of variable natural fertility.}^{[13] Chernozems are highly fertile, characterized by a thick, dark surface layer with high organic matter content.}^{[14] Organosols are formed by high organic matter content, derived from the deposition and accumulation of plant residues, with or without mixing of mineral materials. They occur very sporadically, not constituting representative areas in Brazil.}^{[15] EMBRAPA. (2018). Sistema Brasileiro de Classificação de Solos − Brasília, DF: Embrapa, 2018. 356 p.}^{[16] IPCC (2019). Climate Change and Land: An IPCC Special Report on Climate Change, Desertification, Land Degradation, Sustainable Land Management, Food Security, and Greenhouse Gas Fluxes in Terrestrial Ecosystems. Intergovernmental Panel on Climate Change.}^{[17] Canisares, L.P., et al. (2024). Enhancing Soil Health in Brazilian Agroecosystems: Indicators and Management Practices. In: Ogwu, M.C., et al. [eds] Sustainable Soil Systems in Global South. Singapore: Springer, p. 768. DOI: 10.1007/978-981-97-5276-8_23.}^{[18] Siqueira-Neto M., et al. (2020). Impacts of Land Use and Cropland Management on Soil Organic Matter and Greenhouse Gas Emissions in the Brazilian Cerrado. Eur. J. Soil Sci. p. 1–16. DOI:10.1111/ejss.13059.}^{[19] Lal, R. (2004). Soil Carbon Sequestration Impacts on Global Climate Change and Food Security. Science, 304(5677), 1623–1627. DOI: 10.1126/science.1097396.}^{[20] UNEP (2019). The Global Environmental Outlook: GEO-6. Healthy Planet, Healthy People. Nairobi. DOI: 10.1017/9781108627146.}

REDD+ Mechanism: Analysis of Criticisms and Perspectives with Verra’s New Methodology

^{Authors Marcio Sales, Geostatistics Specialist and}^{Caio Gallego, Operations Intelligence Manager, at Biofílica}

Introduction

The high level of strictness required in meeting technical standards, such as additionality and baseline determination, is crucial for the voluntary carbon market. This strictness ensures that certified projects are genuinely contributing to reducing Greenhouse Gas (GHG) emissions and that these reductions are being calculated robustly, feasibly, and conservatively.

Over the past few years, REDD+ (Reducing Emissions from Deforestation and Degradation) projects, particularly those focused on Avoided Unplanned Deforestation (AUD), have been the subject of substantial criticism. The primary concerns revolve around additionality and the quantification of Reduced GHG Emissions, with claims that baseline emissions in most projects are overestimated, artificially inflating the effectiveness of their deforestation reduction actions.

Criticism intensified in January 2023, when the British journal “The Guardian” published an article describing these projects as practically “useless” and, worse, suggesting that they might even increase emissions¹. The article had a significant impact, causing distrust and intensifying public and market scrutiny of this category of projects. Consequently, there was a decrease in demand and prices for generated credits, along with a negative impact on supply, reducing the certification of new projects and the flow of credit generation.

In response to these criticisms, Verra, the leading certifying organization for REDD+ projects worldwide, initiated an in-depth review of the VCS (Verified Carbon Standard) program’s methodological framework. The update to its rules and methods for registering REDD+ projects aims to eliminate methodological distortions and increase the transparency and credibility of the projects. Verra’s new methodology, VM0048, directly addresses many of these criticisms, promising greater accuracy and alignment in Reduced Emissions accounting.

In this article, we will explore in detail the harsh criticisms directed at REDD+ AUD projects, examining the validity of the arguments and the relevance of the concerns raised. Additionally, we will analyze the changes proposed by Verra’s new methodology and how they aim to address the issues identified.

Existing Methodologies

Essentially, credits from a REDD+ project are determined by comparing emissions resulting from observed deforestation within the project areas to an estimate of what would be deforested if the project had not been implemented. This hypothetical deforestation estimate, therefore, represents the project’s baseline.

Verra, through its VCS standard, has developed different methodologies for REDD+ application, each establishing guidelines for baseline determination. Although they vary, these methodologies are similar in how they determine baselines. Future deforestation in the absence of a project is estimated using historical data, assuming that future annual deforestation rates will either fluctuate around the historical average or follow a trend (increasing or decreasing) observed over the past 10 years in a reference region that includes the project.

The primary weakness in this process lies in the fact that these methodologies require project developers to construct their own baselines. Criteria are provided to guide this process, which must later be audited by a third party. However, questions have arisen about the variations—and in some cases, overestimations—present in baselines across different projects due to the flexibility offered by the methodologies. According to studies, such methodological weaknesses affect additionality and the quality of reduced emissions quantification in projects.

Weak Additionality

The 2023 Guardian article was based on the findings of two independent scientific studies, one published in the Proceedings of the National Academy of Sciences from a plurinational research group, and the other in Conservation Biology, by researchers from the University of Cambridge, UK. The first study² analyzed 12 Verra-validated projects in the Brazilian Amazon, comparing their emission reductions calculated using Verra-approved VCS methodologies with an estimate based on an alternative approach called the “Synthetic Control Method”. In this method³, which differs completely from Verra’s methodologies, reductions are estimated by comparing a project’s emissions to an artificial counterfactual metric derived from data in areas with variables similar to those of the analyzed project (Figure 1).

^{Figure 1: *Figure 1: Emissions reduction estimation scheme using the synthetic control method.}^{Regions A and B represent the historical period and the post-project initiation period, respectively. SCU: Synthetic Control Unit*}

In summary, this method aims to create a sort of replica (Synthetic Control Unit – SCU) of the project area, but without emissions reduction activities, to represent the baseline scenario. The method assumes that the deforestation rates of the constructed synthetic unit represent the project rates after its initiation.

In the cited study, the selected control units exhibited deforestation levels below the baseline values reported by the projects, leading the authors to conclude that almost all projects failed to deliver the claimed emission reductions (Figure 2). At the time, this study received several criticisms, particularly from project developers, concerning flaws in the applied approach. Key criticisms included the selection of areas forming the synthetic unit, the representativeness of the target project universe, among others^{4 5 6 7 8}.

^{Figure 2: Result from the West et al. study. Blue points indicate estimated emissions reductions/increases

in non-project (placebo/synthetic) areas compared to project observations (red line) using the same method.}

The Cambridge study⁹, on the other hand, used a more representative selection of Verra-registered projects but also found a lower reduction in emissions compared to reported values. However, the study showed that the projects exhibited positive additionality, unlike the first study. The authors used the “matching” or “statistical matching” method, another approach for evaluating the impact of interventions, similar to the synthetic control method.

The difference between the two methods is that, while the latter evaluates each project individually, matching can be applied to a group of projects, allowing a broader assessment of intervention effects. The method selects one or more control areas with similar characteristics for each project in the intervention group, forming two “matched” groups. The impact of the projects on CO2 emissions is calculated as the difference between the average emissions in the two groups for each period following the start of each project. This second study indicated that the analyzed projects had additionality of approximately 47%, partially diverging from the first study, but still below reported values. Similar to SCU, matching shares the same assumption that control group areas continue to represent the project characteristics post-initiation.

Finally, it is worth noting that, unlike VCS methodologies, emission reductions calculated by SCU or matching methods are only calculated ex-post. This means that these procedures do not, at least directly, allow for ex-ante predictions of project emissions reductions and, consequently, its potential credit generation. Verra’s methodologies, on the other hand, project future deforestation based on recent historical patterns, allowing for feasibility analyses prior to project implementation, which is crucial for any endeavor requiring planning and upfront investment. Despite the differences and limitations of the two studies, both pointed to potential distortions that needed to be further analyzed and resolved if confirmed.

Finding the root of the problem

Regarding Verra’s VCS REDD+ methodologies, a fundamental aspect for this discussion is worth highlighting. It is known among project developers that, before consolidation, different methodologies could be applied to the same project. Thus, baseline estimates showed high sensitivity depending on the chosen methodology and the parameters and procedures each methodology allowed.

In 2024, a study titled “Methodological Issues with Deforestation Baselines Compromise the Integrity of Carbon Offsets from REDD+”¹⁰, with participation of some researchers of the plurinational group, went straight to the root cause of these distortions and illustrated the issues more assertively. While this recent study’s representativeness is insufficient to generalize the results, it is enough to demonstrate that the flexibility allowed in methodology choice and its parameters produces significant variation in estimated emission reductions. Since the choice of methodology and application of parameters has always been at the project developer’s discretion, this flexibility could (intentionally or not) facilitate the generation of baseline overestimations. As baseline distortions resulting from the variety and flexibility of rules did not necessarily violate methodological standards, auditing and certification standards could not disapprove. This methodological inconsistency has long-enabled distortions, such as similar projects within the same region having vastly different baselines.

Verra’s New REDD+ Methodology

As discussed, The Guardian article and the studies mentioned in the previous section significantly impacted the carbon credit market, raising serious concerns about the integrity of generated credits. In response, Verra began a detailed review of its methodological framework in 2023. All previous methodologies are being replaced by a new integrated methodology, VM0048, which will apply to all REDD+ approaches.

This new methodology is expected to ensure greater integrity of credits generated by REDD+ projects and restore market confidence. Adopting a more robust and transparent approach aims to ensure that carbon credits more accurately reflect the climate benefits generated, promoting greater credibility and confidence among stakeholders.

The new methodology does not adhere to the methods proposed by the critics’ studies, which have weaknesses as previously discussed. Notwithstanding, it introduces significant advancements as outlined below (Figure 3):

^{Figura 3: Principais mudanças com a metodologia VM0048}

These changes largely address previously highlighted issues. Primarily, they eliminate the flexibility allowed by previous methodologies, as activity data will be generated in advance and allocated to projects directly by Verra, as a new service provided by the Standard. Thus, estimates will be calculated using a universal method, ensuring consistency in emission reduction accounting and carbon credit generation at the jurisdictional level, regardless of the quantities allocated to projects.

Another improvement is the use of historical deforestation rate estimates based on statistical methods. Previous methodologies allowed direct use of land cover classification data to calculate deforested area during the historical period, a procedure known to generate biased estimates¹¹. Fortunately, this error can be reduced using original probabilities¹²or probabilistic sampling estimates¹³, which is the solution employed in the new methodology.

The new method also aims to increase the conservatism of future emission projections, limiting them to historical deforestation averages over the last 10 years in each jurisdiction (Figure 4). Some previous methodologies allowed projections based on observed trends of increasing or decreasing deforestation rates. However, this could overestimate future deforestation if, for example, a previously observed upward trend did not continue in the future. This measure is reinforced by reducing the baseline validity period from 10 to 6 years, requiring more frequent adjustments to activity data. This helps to avoid overestimations (or underestimations) at the jurisdictional level due to shifts in deforestation patterns between validation periods.

^{Figure 4: Example illustrating a case where a linear model fitted on historical data would overestimate future deforestation

due to a break in the past trend. Data (points) correspond to annual deforestation rate estimates from PRODES for the State of Acre. Historical (blue) and forecast (orange)

periods were arbitrarily selected to illustrate the example.}

Another remarking change with the new methodology is that historical deforestation averages for entire jurisdictions are allocated based on a spatial model of deforestation risk, so projects “get” a fraction of their jurisdictions’ activity data based not only in their size but also location in relation to deforestation hotspots. Currently, the allocation model uses only one variable, distance to forest edges, but has acceptable accuracy as this is one of the factors most correlated with the risk of deforestation¹⁴. Over time, this basic model should be enhanced or replaced with more complex and accurate ones but, most importantly, the initial model reduces the chance of overestimating the baselines for the jurisdiction as a whole.

Remaining Challenges

As shown above, the proposed changes in the new methodology are expected to significantly reduce baseline distortions across projects, enabling better evaluation of their additionality and aligning accounting at the jurisdictional level. However, despite ensuring consistency at the jurisdictional scale, the current simplified allocation model may lead to biases at the local scale, sometimes underestimating the additionality of high-deforestation-risk projects or, in other cases, overestimating those in low-risk areas. Moreover, as REDD+ AUD projects are viable only in regions with higher deforestation pressure, this effect may prevent project implementation in certain regions, reducing the conservation potential of the mechanism.

This issue will be mitigated as more sophisticated models are adopted by the methodology. Additionally, the methodology modules addressing unplanned degradation occurrence and Avoided Planned Deforestation (APD) still require further definition.

Future Perspectives

Despite remaining challenges and necessary adjustments to the new methodology, it represents a significant step forward in addressing the issues. REDD+ projects are certainly useful for reducing GHG emissions, and the enhancement of new methodologies should reinforce their effectiveness with more accurate measures of their additionality. This is expected to restore confidence in these projects and revitalize the market.

It is worth noting that credits from Nature-Based Solutions (NBS) projects remain the most sought-after in the market, with the highest transaction volumes and retirement rates in 2022 and 2023¹⁵. Additionally, REDD+ AUD projects account for approximately 50% of registered REDD+ projects and represent the majority of generated credits.

The preference for projects in this category can be explained by benefits beyond emissions reductions, such as biodiversity conservation and the socioeconomic development of local communities. The REDD+ projects developed by Biofílica contribute to the conservation of 2.5 million hectares of forests, home to dozens of endangered species of fauna and flora, impacting over 130 local communities.

There is a strong outlook for the restoration of the REDD+ market, given its crucial importance for climate change mitigation and biodiversity preservation. These projects, when well-executed, not only contribute to GHG emission reductions but also promote sustainable development in local communities and ecosystem conservation. With the continuous evolution of accounting methodologies and growing global recognition of the urgent need for effective climate actions, the forest conservation-derived carbon market is expected to continue expanding, attracting investments, and contributing to the achievement of global climate goals.

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Our team of technical and institutional experts is available to provide additional support and clarifications.

^{[1] Jornal “The Guardian”. “Revealed: more than 90% of rainforest carbon offsets by biggest certifier are worthless, analysis shows.”. Available at: https://www.theguardian.com/environment/2023/jan/18/revealed-forest-carbon-offsets-biggest-provider-worthless-verra-aoe}
^{[2] West, Thales A. P., Jan Börner, Erin O. Sills, e Andreas Kontoleon. 2020. “Overstated Carbon Emission Reductions from Voluntary REDD+ Projects in the Brazilian Amazon”. Proceedings of the National Academy of Sciences 117 (39): 24188–94. https://doi.org/10.1073/pnas.2004334117.}
^{[3] Abadie, Alberto. 2021. “Using Synthetic Controls: Feasibility, Data Requirements, and Methodological Aspects”. Journal of Economic Literature 59 (2): 391–425.}
^{[4] Malan, M., Carmenta, R., Gsottbauer, E., Hofman, P., Kontoleon, A., Swinfield, T., & Voors, M. (2024). Evaluating the impacts of a large-scale voluntary REDD+ project in Sierra Leone. Nature Sustainability, 7(2), 120-129.}
^{[5] Study analysis of “West et al. (2020): Overstated carbon emission reductions from voluntary REDD+ projects in the Brazilian Amazon” available at: https://www.climatepartner.com/en/knowledge/insights/study-analysis-of-west-et-al-2020.}
^{[6] Our analysis of The Guardian’s criticism of Verra. Systemicka Team. Available at: https://systemica.digital/en/nossa-analise-sobre-critica-do-the-guardian-a-verra/}
^{[7] Technical Review of West et al. 2020 and 2023, Guizar-Coutiño 2022, and Coverage in Britain’s Guardian. Verra. Available at: https://verra.org/technical-review-of-west-et-al-2020-and-2023-guizar-coutino-2022-and-coverage-in-britains-guardian/}
^{[8] Carbonext-Response to West at al’s (2020) Study. Available at: https://www.documentcloud.org/documents/20475770-response-to-west-et-al-from-carbonext_8-technical-audience}
^{[9] Guizar-Coutiño, Alejandro, Julia P. G. Jones, Andrew Balmford, Rachel Carmenta, e David A. Coomes. 2022. “A Global Evaluation of the Effectiveness of Voluntary REDD+ Projects at Reducing Deforestation and Degradation in the Moist Tropics”. Conservation Biology 36 (6): e13970.}
^{[10] Stuart, Elizabeth A. 2010. “Matching methods for causal inference: A review and a look forward”. Statistical science : a review journal of the Institute of Mathematical Statistics 25 (1): 1–21. https://doi.org/10.1214/09-STS313.}
^{[11] West, Thales A.P., Barbara Bomfim, e Barbara K. Haya. 2024. “Methodological Issues with Deforestation Baselines Compromise the Integrity of Carbon Offsets from REDD+”. Global Environmental Change 87 (julho):102863. Disponível em https://www.sciencedirect.com/science/article/pii/S0959378024000670}
^{[12] Sales, Marcio H. R., Sytze de Bruin, Carlos Souza, e Martin Herold. 2021. “Land Use and Land Cover Area Estimates From Class Membership Probability of a Random Forest Classification”. IEEE Transactions on Geoscience and Remote Sensing, 1–11. https://doi.org/10.1109/TGRS.2021.3080083.}
^{[13] Sales, Marcio H. R., Sytze de Bruin, Carlos Souza, e Martin Herold. 2021. “Land Use and Land Cover Area Estimates From Class Membership Probability of a Random Forest Classification”. IEEE Transactions on Geoscience and Remote Sensing, 1–11.}
^{[14] Olofsson, Pontus, Giles M. Foody, Martin Herold, Stephen V. Stehman, Curtis E. Woodcock, e Michael A. Wulder. 2014. “Good Practices for Estimating Area and Assessing Accuracy of Land Change”. Remote Sensing of Environment 148 (maio):42–57.}
^{[15] Jaffé, Rodolfo, Samia Nunes, Jorge Filipe Dos Santos, Markus Gastauer, Tereza C. Giannini, Wilson Nascimento Jr, Marcio Sales, Carlos M. Souza, Pedro W. Souza-Filho, e Robert J. Fletcher. 2021. “Forecasting Deforestation in the Brazilian Amazon to Prioritize Conservation Efforts”. Environmental Research Letters 16 (8): 084034. https://doi.org/10.1088/1748-9326/ac146a.}
^{[16] Forest Trends’ Ecosystem Marketplace. 2024. “State of the Voluntary Carbon Market 2024”. Washington DC: Forest Trends Association.}

🌎 Biofílica celebrates the approval of the bill that establishes the national regulated carbon market. 🌱

The bill was approved by the National Congress. After implementation, Brazil will have the largest emissions trading system in Latin America.

After years of discussion, Brazil is close to creating its regulated carbon market, a decisive step toward the country’s sustainable development. Biofílica, the leader in environmental management, celebrates the approval of this bill by the National Congress, which will encourage companies and sectors to reduce their emissions, actively contributing to environmental protection and providing rules to enhance the integrity and socio-environmental impact of carbon credits in the Voluntary Market.

According to Plínio Ribeiro, co-founder at Biofílica, the approval of Bill No. 182/2024 demonstrates the unity of our leaders in creating a favorable regulatory environment.

“This bill represents an important progress for Brazil to achieve the goals set by the Paris Agreement. At the same time, the interoperability between the Regulated Market, focused on public sector initiatives, and the Voluntary Market, aimed at private initiatives, as outlined in the text, is the solution to address the main source of greenhouse gas (GHG) emissions in Brazil: illegal deforestation,”, said the executive.

Under the proposed regulation, companies that emit more than 10,000 tons of carbon dioxide equivalent (CO2E)¹ per year will be required to establish an emissions monitoring plan and submit periodic reports, while companies emitting more than 25,000 tons of CO2E per year will need to not only report and monitor their emissions but also offset them through emission permits distributed either free of charge or for a fee by the government. It is estimated that around 5,000 companies in Brazil emit more than 25,000 tons of CO2E. Therefore, the Brazilian Regulated Market, when implemented, will become the largest carbon market in Latin America.

Another important aspect of the bill is the establishment of sectoral emission limits.

“One of the most relevant points of the document is setting sectoral caps. The regulator generally starts with the most emission-intensive sectors. This is the great challenge of public policy, where you set this limit (cap). Civil society must be very attentive to ensure these numbers are feasible, but not so high as to negatively impact the competitiveness of these sectors,”, he explains.

The regulatory framework also sets key points to ensure legal security and increase the integrity of the Voluntary Carbon Market in Brazil. It defines clear rules on the ownership and taxation of credits, preventing double counting, and ensuring the rights of traditional communities, landowners, and indigenous peoples. It also includes a public project registry and grants states the freedom to create their own programs, while protecting the right to exclude private areas from public accounting. Lastly, it aligns Brazilian legislation to enable the commercial trading of credits in the global market.

Since the start of the debate on the creation of a regulated carbon market in Brazil, Biofílica has been actively involved, sharing its technical expertise with Parliament, the Federal Government, States, and civil society.

“We will continue to work to strengthen this market in Brazil and ensure that the regulation meets the expected needs. By 2030, between 35% and 50% of emission reductions must come exclusively from Nature-Based Solutions. That’s why we are developing projects that promote emission reductions through forest conservation and emission sequestration through reforestation, and we are ready to supply the new Brazilian Regulated Market with carbon credits of high socio-environmental integrity,” Ribeiro concludes.

Plínio Ribeiro
^Co-founder^Biofílica

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^{1) Carbon dioxide equivalent (CO2e) is a metric used to compare the emissions of various greenhouse gases based on their global warming potential relative to carbon dioxide (CO2). For example, the global warming potential of methane is 21 times greater than that of carbon dioxide (CO2). Therefore, we say that the CO2 equivalent of methane is 21.}

^{2) Griscom et al (2017), BCG analysis}

Brazilian Agriculture, a potential Nature-Based Solution

^{by Caio Gallego, NBS Intelligence Manager}^{and Marcos Siqueira-Neto, ALM Specialist (Agricultural Land Management)}

Planting and livestock raising are among humanity’s oldest activities. Agriculture allowed the emergence of cities, productive diversification, and commercial activities. Altering landscapes and utilizing natural resources, agriculture is the greatest human endeavor on Earth.

to provide feed, fiber, and bioenergy for the 10 billion people estimated to occupy the planet in 2050, and without increasing impacts on natural ecosystems, the rise of agricultural production must be made possible not only by increasing productivity, but also through recovery of degraded areas.

In this 2^nd technical positioning of Biofílica, we intend to address the importance of Brazilian agribusiness for socioeconomic development and its decisive role as a potential Nature-Based Solution. We also highlight the need to face the challenges of food and energy security against climate change, guaranteeing human health and well-being, while also helping to reduce environmental degradation.

The growth of Brazilian agriculture and its environmental impacts

The success of Brazilian agriculture was due to the presence of areas with favorable environmental conditions, abundant water, and a mechanized production, combined with technological innovations and tropicalized management practices, resulting in both increased productivity and the expansion of production frontiers, especially in the Amazon and the Cerrado.

Family agribusiness, which accounts for 77% of rural properties, is important for supplying the domestic market and controlling food prices. Corporate agribusiness accounts for around 50% of the export basket, with emphasis on the soybean and sugar-alcohol complexes, cereals, meat, and forestry products.

The productive rise of Brazilian agriculture began in the 1960s, a period known as the “Green Revolution”. Its modernization was based on scientific research and technological innovations, with emphasis on the creation of the Brazilian Agricultural Research Corporation (Embrapa). However, this growth brought deep changes to the production model and rural landscape, and consequences for traditional farmers, such as:

Need to adapt to the new production model
Need for credit to purchase equipment and inputs
Need for technical assistance for technological transition
Dependence on technology and inputs external to the properties.

Which also reflected in Brazilian territorial planning, such as:

Unemployment in the countryside
Rural exodus
Increase in large estates
Migratory movements
Territorial occupation and the need for infrastructure.

As for the environment, the biggest impacts caused by the growth of the agricultural sector are related to two factors:

intensive change in land use, which is one of the main vectors responsible for deforestation, and,
after conversion, degradation of cultivated areas and pastures, caused by inadequate management practices or lack thereof.

These factors, added to the burning of plant residues, flooded rice production, the excessive use of fertilizers (especially nitrogen) and agrochemicals, in addition to enteric fermentation and the decomposition of animal waste are responsible for environmental degradation and increased greenhouse gas emissions (GHG), worsening climate change, of which feed back into impacts on production, such as changes in territorial zoning and agricultural suitability, increased desertification risk and extreme weather events.

Regulatory actions for sustainable development in Brazilian agriculture

Historically, Brazilian agricultural policies have encouraged commodity production and deforestation focused exclusively on increasing production. However, more recently, international pressure, markets and civil society have been demanding that various sectors, including agribusiness, establish clear goals and implement effective actions to reduce environmental degradation, mitigate climate change, biodiversity losses, eradicate work analogous to slavery, and promote fair labor relations.

In addition to changing legislation to protect the environment, voluntary initiatives seek to reconcile environmental preservation and economic development to encourage responsible agricultural production, for example, the ‘Soy Moratorium‘. This initiative marks the companies’ commitment not to sell soy from deforested areas of the Legal Amazon. In 2020, the ‘Brazil Climate, Forests, and Agriculture Coalition‘ brought together representatives from agribusiness and other entities, and presented six measures to quickly reduce illegal deforestation in the Amazon, these being:

Intensify supervision
Suspend the CAR for areas in public forests
Designate areas for protection and sustainable use
Grant financing under socio-environmental criteria
Provide transparency in vegetation suppression authorization data
Suspend land regularization processes for properties with deforestation found after July 2008.

Recently, the European Union published Regulation 2023/1115 – EU Deforestation-Free Regulation, imposing due diligence requirements on imports of agricultural products that may be associated with deforestation. In fact, this regulation worked as a catalyst to accelerate initiatives aimed at traceability of value chains, e.g., the ‘Soja na Linha’ initiative, which presents criteria for soy traceability. In livestock, the most recent initiative was the ‘Protocolo de Monitoramento Voluntário de Fornecedores de Gado no Cerrado‘, presenting the socio-environmental monitoring criteria for the purchase of products of bovine origin.

In this context, it becomes evident that the search for sustainable development in Brazilian agribusiness goes beyond responsible production, respect for land, labor, and environmental legislation. It is also influenced by regulatory frameworks, agreements, and guidelines on international markets, which has reputational consequences, including sanctions and embargoes. These factors affect both the demand and the prices of Brazilian agricultural products, directly impacting the income of rural producers.

Agriculture as a Nature-Based Solution

As defined by the United Nations Environment Programme (UNEP), Nature-Based Solutions (NBS) are actions to conserve, restore or sustainably use of natural or modified ecosystems, which address social, economic, and environmental challenges, while time that provides human well-being, quality ecosystem services, climate resilience, and benefits for biodiversity.

Based on this definition, the NBS goes beyond environmental issues, and points to the need to promote actions to support rural populations, especially smallholders, women, and traditional populations in vulnerable situations, through the provision of credit and financing services, market access, land ownership, health, social services, education, training, knowledge, and environmentally appropriate and accessible productive technologies.

For Brazilian agriculture to be seen as an NBS, it is necessary to encourage changes in the approach to the current production model. This transformation must occur both on rural properties and in productive activities. This will only be possible through the involvement of public authorities, international organizations, universities, private sector, and civil society, especially rural producers, and environmentalists.

Changes to the production model initially occur in the administrative and financial management of rural properties and extends to its productive activities. Best management practices with a NBS bias operate in synergy with natural processes, enhancing ecosystem services. In addition to the benefits for production, improved soil health and the productive environment, these practices effectively promote the recovery of degraded, unproductive, or low-productivity areas. Some examples of best management practices are no-tillage, cover crops, crop rotation and diversification, rotational pasture management, agroforestry, among others.

Adoption of best management practices also guarantees a more resilient agricultural environment, both to financial and environmental risks, helping producers to adapt productive activity to increasingly varied climatic conditions, as well as directly contributing to the mitigation of climate change, through sequestration carbon in soil and vegetation and reducing GHG emissions into the atmosphere.

In this sense, the necessary actions for the transition from current production models to the sustainable development of Brazilian agriculture must occur through the adoption of best management practices with a NBS bias that provide i) socioeconomic benefits, such as increased productivity and agricultural profitability, with improved living conditions in rural communities and new sources of income; ii) adaptation and resilience of productive activities to climate risks, guaranteeing food and energy security and, iii) the reduction and removal of GHG emissions.

Challenges and Perspectives

If, on the one hand, the sustainable development of agriculture is a potential SNB and can leverage the global sustainable development, on the other hand, given the size of the country, Brazilian agriculture is marked by the heterogeneity of production models that differ in terms of scale, production systems, use of production factors and inputs, and presents different technical and technological levels.

In most cases, this discrepancy is related to regional diversity and the knowledge of rural producers, as well as their different capabilities to make investments in the property and in its productive activities. In general, the barriers that prevent the transition from the current production model to a sustainable approach in agriculture are related to:

producers’ resistance to adopting new models of property management and their productive activity (cultural barrier)
lack of knowledge of the impacts of the exhaustion of natural resources, loss of quality of ecosystem services and climate risks on production (institutional barrier)
lack of capacity and/or financial strategy to make improvements in productive activity (financial barrier)
lack of technical assistance and qualified labor force to implement sustainable production (technical barrier)

Facing these challenges reinforces the synergy between agriculture and NBS through meticulous engagement of rural producers with the sustainable development of production. Thus, providing rural producers with knowledge, training, and technical assistance to adopt best management practices in the property and productive activity, demonstrating their benefits in productivity and profitability.

It is known that to make changes in management practices, it normally requires investments in equipment, infrastructure, inputs, and labor. Therefore, rural producers need access to credit lines with sustainability criteria that can be public (RenovAgro and Fundo Clima), private (green bonds) or mixed (blended financial), in addition to other financial incentives such as payments for environmental services and the carbon market.

Currently, in addition to the potential benefits to society and the environment, the adoption of best management practices with a NBS bias also makes it possible to implement projects to generate carbon credits, which can be certified in the Voluntary Carbon Market (VCM). The entry of the agricultural sector into the carbon market represents yet another paradigm shifts in history, directing real financial incentives towards the development of the sector towards sustainable production.

In this way, Brazilian agriculture can take a leading role in leveraging the Sustainable Development Goals, as it guarantees food security and improved nutrition (SDG2), becomes the largest supplier of biofuels, influencing the global energy matrix (SDG7), boosts the agro-industrial chain and responsible consumption (SDG 12), contributes to the empowerment of small farmers and women (SDG5), and contributes to the poverty eradication (SDG1). Furthermore, the sustainable intensification of agricultural production has a direct effect on forest conservation, reducing pressure on deforestation and mitigating climate change (SDG13).

Brazilian agriculture has a lot to gain by aligning itself with the principles of Nature-Based Solutions. However, for this to happen, it is essential to create, encourage and disseminate export policies, credits, and socio-environmental incentives, as well as markets for carbon credits, low carbon/net zero products, and fair trade. At the same time, agribusiness, both family and business, needs to adapt, transform, and commit to continuous improvement in the management of rural properties and their productive activities. These actions must aim to increase productivity, productive diversification, and financial benefits, advancing the sustainable development agenda, reducing environmental depletion, and increasing resilience to climate risk.

For more:

^{Denny, D.M.T., Cerri, C.E.P., Cherubin, M.R., & Burnquist, H.L. (2023).

Carbon Farming: Nature-Based Solutions in Brazil.}