Reforestation projects are having a moment. Last week, The New York Times ran a comprehensive piece about a handful of companies racing to buy up land near the Amazon rainforest in an effort to reforest it and convince cattle farmers and the world that the value of standing trees and their carbon sinking abilities outweighs the ranching business. While it offers a glimmer of hope for the future of reforestation projects, there’s still a long way to go, and a number of forest management and carbon offset complexities to manage.
Why the Amazon Forest Matters
The Amazon stretches from Western Peru to the coast of Brazil on the Atlantic Ocean in South America, and is frequently referred to as the “lungs of the planet.” It spans roughly 6.7 million square kilometers (roughly 2.6 million square miles) and spans nine countries. A majority of it is located in Brazil. Brazil is also the largest exporter and the second-largest producer of beef in the world. Cattle and forests don’t mix. Cattle ranching is, according to the Union of Concerned Scientists, the largest driver of deforestation around the world because cattle need grass to graze. While there are some ranching practices like silvopasture that can allow cattle and forests to coexist, scientists estimate that 550 million hectares globally. Only about 1.5% of ranchers use the practice in the U.S.
According to the Times, about one-fifth of the rainforest is already gone, thanks in large part to slash-and-burn practices used by cattle ranchers to clear the forest. Globally we consume around 350 million tons of beef each year. That demand is expected to remain relatively flat in 2024 thanks to a variety of economic and inflationary headwinds, as well as demand.
According to the World Wildlife Federation, deforestation alone releases 340 million tons of carbon into the atmosphere each year. As the Times reports, scientists warn that rising global temperatures could push the Amazon ecosystem to “collapse in the coming decades unless deforestation is halted and an area the size of Germany is restored.”
The relationship between the Amazon and cattle ranchers is complex. While it may seem that cattle ranchers are just in it for the profits, in truth, a study published in 2017, showed that ranchers in Brazil stay in the low-profit, environmentally damaging trade because it provides a number of perceived social benefits including (as, The Information reported) “a quiet lifestyle, safety, and social status.”
The profitability of forests compared to cattle ranching is a complex issue that can also vary greatly depending on geographic location, local economic conditions, environmental considerations, and management practices. Both forest management and cattle ranching have their economic benefits and challenges, and the scale can tip in favor of either depending on several factors. One factor, however, that’s increasingly tipping in favor of preserving and even reforesting large swaths of the Amazon, however, is the growing appeal of carbon credits. This is all heavily dependent on effective forest management, local conditions, and the integration of markets for carbon credits, of course.
While carbon credits are fraught – especially those related to the Amazon rainforest, The New York Times reports that there are a growing number of climate tech companies looking to find a way to reforest the Amazon while offering carbon offsets as a way to improve the climate and what’s known as forest governance. In short, by offering landowners a way to make more money by reforesting their land and selling those carbon credits back to corporations, these companies hope to do good both for the planet and the local community.
As the Times points out, “The bet hinges on the success of a system that’s being built from scratch and comes with some big challenges. Measuring the carbon held in trees and soil is complex. And, many conservationists worry that carbon credits could easily be abused by companies that want to appear environmentally conscious while sticking with fossil fuels.”
In fact, one thing that the Times piece doesn’t go into is the very complex dynamics of international (and local) forest governance. Recently, the International Union of Forest Research Organizations (IUFRO), released a report that shows that the shift towards more diverse forest governance frameworks has introduced a new layer of complexity into the system.
These frameworks increasingly recognize the financial value embedded in forest ecosystem services, which may exceed traditional revenue from agriculture and livestock, such as beef production. The complexity of international forest governance has increased significantly, involving a broader range of actors and financial instruments that support both sustainability and economic interests–at least on paper.
Recent reports, however, critique traditional approaches to forest governance, noting that they often fall short in terms of effectiveness, particularly with respect to combating deforestation and biodiversity loss. There is a growing recognition that enhancing forest governance can lead to better economic outcomes by integrating sustainable practices that align with global climate goals and biodiversity conservation, thereby making forests a more lucrative and sustainable investment than conventional agriculture practices like cattle ranching.
While this all sounds beneficial to stemming the tide of climate change, the 2024 report by the IUFRO, notes that as forest-related finance (known as IFG) increases in complexity, more institutions and actors with interests in short-term gains over sustainability get into the space, which can be problematic for sustained change. The report also notes that IFG has “limited effectiveness” when it comes to addressing deforestation, biodiversity loss, and forest emissions, which has resulted in a sort of arms race of various pledges and targets set by governments and corporations.
Carbon credits are one factor in IFG that have been fraught–and, as the IUFRO points out, “complex forest problems require synergistic approaches involving a wide range of policy instruments,” as well as financial ones.
There’s hope that efforts by companies like Re.green and Momback, detailed in the New York Times story, have a positive impact on reforestation in the Amazon, real carbon offset, climate change, and rancher’s livelihood–but it will take a lot of time, and much more considered thinking about how IFG, and carbon offsets work, and a much more unified policy approach to get there.
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