title: Brazil's Market for Trading Forest Certificates.
abstract: Brazil faces an enormous challenge to implement its revised Forest Code. Despite big losses for the environment, the law introduces new mechanisms to facilitate compliance and foster payment for ecosystem services (PES). The most promising of these is a market for trading forest certificates (CRAs) that allows landowners to offset their restoration obligations by paying for maintaining native vegetation elsewhere. We analyzed the economic potential for the emerging CRA market in Brazil and its implications for PES programs. Results indicate a potential market for trading 4.2 Mha of CRAs with a gross value of US$ 9.2±2.4 billion, with main regional markets forming in the states of Mato Grosso and São Paulo. This would be the largest market for trading forests in the world. Overall, the potential supply of CRAs in Brazilian states exceeds demand, creating an opportunity for additional PES programs to use the CRA market. This expanded market could provide not only monetary incentives to conserve native vegetation, but also environmental co-benefits by fostering PES programs focused on biodiversity, water conservation, and climate regulation. Effective implementation of the Forest Code will be vital to the success of this market and this hurdle brings uncertainty into the market. Long-term commitment, both within Brazil and abroad, will be essential to overcome the many challenges ahead.
authors.affiliation: Centro de Sensoriamento Remoto, Universidade Federal de Minas Gerais, Belo Horizonte, Brazil.
authors.forename: Britaldo
authors.initials: B
authors.lastname: Soares-Filho
authors.affiliation: Laboratório de Gestão de Serviços Ambientais, Universidade Federal de Minas Gerais, Belo Horizonte, Brazil.
authors.forename: Raoni
authors.initials: R
authors.lastname: Rajão
authors.affiliation: Department of Forest Resources and Environmental Conservation, Virginia Tech, Blacksburg, Virginia, United States of America.
authors.forename: Frank
authors.initials: F
authors.lastname: Merry
authors.affiliation: Centro de Sensoriamento Remoto, Universidade Federal de Minas Gerais, Belo Horizonte, Brazil.
authors.forename: Hermann
authors.initials: H
authors.lastname: Rodrigues
authors.affiliation: Centro de Sensoriamento Remoto, Universidade Federal de Minas Gerais, Belo Horizonte, Brazil.
authors.forename: Juliana
authors.initials: J
authors.lastname: Davis
authors.affiliation: Centro de Sensoriamento Remoto, Universidade Federal de Minas Gerais, Belo Horizonte, Brazil.|IRI-THESys, Humboldt-Universität zu Berlin, Unter den Linden 6, Berlin, Germany.
authors.forename: Letícia
authors.initials: L
authors.lastname: Lima
authors.affiliation: Woods Hole Research Center, Falmouth, Massachusetts, United States of America.
authors.forename: Marcia
authors.initials: M
authors.lastname: Macedo
authors.affiliation: Woods Hole Research Center, Falmouth, Massachusetts, United States of America.
authors.forename: Michael
authors.initials: M
authors.lastname: Coe
authors.affiliation: Agroicone, Av. General Furtado do Nascimento, São Paulo, Brazil.
authors.forename: Arnaldo
authors.initials: A
authors.lastname: Carneiro
authors.affiliation: Laboratório de Gestão de Serviços Ambientais, Universidade Federal de Minas Gerais, Belo Horizonte, Brazil.|Copenhagen Business School, Solbjerg Pl. 3, Frederiksberg, Denmark.
authors.forename: Leonardo
authors.initials: L
authors.lastname: Santiago
mesh_terms: D001938:Brazil; D003247:Conservation of Natural Resources; D065928:Forests; D008962:Models, Theoretical