Reforesting the Atlantic Forest, through Forest Credits, PES or Carbon Credits

Abstract

The Atlantic Forest (AF) biome has been impacted by deforestation over the years. Only 2-5% of the original forest is still in its original condition. In order to mitigate the deforestation efforts, the Environmental Reserve Quota (CRA) trading mechanism was introduced. This mechanism allows for the trade of legal reserves (LR) between landowners, with as goal to increase the forest cover in the Atlantic Forest biome. This study attempts to gain more insight into the CRA market and alternatives. A Scientific Literature Review (SLR) analyzed the financial mechanisms, carbon credits & Payments for Environmental Services (PES). These results were then compared to the outcomes of an Agent Based Modelling (ABM) model of the CRA market. Forest cover increases as a direct result of the CRA market. Reforestation to the 20% legal reserves threshold is observed. Carbon credits cannot exceed the opportunity costs of farms, under current regulations, and are unlikely to be eligible as additional financial incentive. The best results in terms of forest cover, revenue streams and land quality is likely to be observed under integration of PES schemes locally, with the CRA market nationally. More research should be performed in order to determine the integration possibilities of PES and CRA for future forest conservation policy.