Brazil has secured the world's largest carbon trading deal to date by selling emissions 'credits', which developing countries can obtain — and sell — by reducing their carbon dioxide emissions.
The deal will lead to the reduction of over 20 million tonnes of carbon dioxide over the next two decades, with over 5 million tonnes of these savings being 'purchased' by investors — including the International Finance Corporation, on behalf of the Dutch government.
It been arranged under the Clean Development Mechanism of the Kyoto Protocol, which enables industrialised countries to meet some of their emission reduction targets by funding 'green' projects in developing countries.
The Brazilian project is being carried out by the steel manufacturer V&M do Brasil, and involves the production of steel using charcoal from sustainably managed tree plantations. Charcoal is already used in steel manufacturing, but risks being abandoned in favour of coal-based steel mills.
"We are very pleased that the carbon market is now at a point where meaningful transactions such as this can happen, supporting projects of this significance," says Pedro Moura Costa, managing director of EcoSecurities Group, the international greenhouse gas advisory firm that brokered the deal.
© SciDev.Net 2003
Related external links:
EcoSecurities press release
V&M do Brasil
Photo credit: NREL