Rainforest protection drives 34% growth in voluntary carbon market
The world’s leading voluntary carbon market report, produced by Ecosystem Marketplace and Bloomberg Energy Finance, showed a 34% increase in the voluntary carbon market volume in 2010. Despite the closing of the Chicago Climate Exchange (CCX) in 2010, an increase in the voluntary market overall was driven by continued CSR and specifically by projects aimed at saving endangered rainforest and capturing carbon in trees; a mechanism known as “Reduced Emissions from Deforestation and Degradation” (REDD).
In 2010, REDD accounted for almost 30% of all emissions reductions documented, thanks in part to new REDD methodologies published by the “Verified Carbon Standard” (VCS) which provided guidance for almost a third of all credits. As a result there was a surge of activity with REDD projects especially in Brazil and Latin America where there was a doubling of credits from the previous year. Read more at Greenbiz.com here.
Brazil deforestation increases 473%
New data from the Brazil government shows that there has been a huge increase in deforestation within the Amazon during the past few months. Brazil’s National Space Research Agency (INPE)’s rapid deforestation detection system (DETER) recorded 593 square kilometers of forest was cleared during March and April 2011, an area of rainforest 10 times the size of Manhattan and a 473% increase over 2010 figures for those two months. Over 80% of this occurred in the southern-most state of Mato Grosso where most of the land ends up as cattle pasture or agricultural land.
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Amazon Hydro Project now full steam ahead
Following much resistance from local campaigners and negative publicity and fines due to illegally de-foresting beyond the necessary limits, the “Energia Sustentavel do Brasil” have finally been awarded the environmental licence to complete the 3.3 GW Amazonian hydro plant.
Energia Sustantavel do Brasil won the rights to the R$9bn dam on the Madeira river after offering to sell electricity at just over R$71 per MWhr. Having won the project however they then tried to move the site 9km downstream and the projects environmental license had to be re-assessed.
The State of Rondonia will receive R$90m in environmental compensation funds, including a land swap for alternative existing forest and also R$69m to go to Porto Velho some 120km from the dam, to go toward schools and public housing.
The dam is expected to start producing energy in 2012.
Brazil wind potential for 140m homes
Brazil’s current installed wind turbines delivers just 341 MW, a tiny fraction of the global wind output of over 100GW and miniscule compared to Spain the World’s 3rd largest producer with a 17GW capacity. However things look set to change.
In the north-east states of Ceara and Rio Grande do Norte the windswept coastlines provide the perfect opportunity for wind farm development. Previously the costs related to storage and transportation from more remote locations have hindered progress, however the long-term benefits from this free renewable energy source are now finally appreciated.
This November the Brazilian government will hold its first wind power auction in which it is expected to buy around 1GW of generating capacity from competing firms …. enough to power 1m average Brazilian homes. With over 4500 miles of blustery coast, Brazil has the potential to deliver up to 140 GW of wind energy – enough to power 140m homes. Considering Brazil’s population is a “mere” 190m at the moment, wind energy production on this scale would have a significant influence on the grid.
The government intend on delivering 1GW per annum taking it to 10GW within the decade, making it 5% of national energy supply and a significant step towards their climate change plans. Whilst Brazil has no formal target of renewable energy supply by 2020, Brazil does have the significant advantage of having enormous solar power, hydro power and bio-fuel projects and ongoing potential, so we expect to see Brazil taking a leading role in renewable energy development over the years to come.
Brazil Energy Industries Boom
In the past decade Brazil has succeeded where most of the industrialized world has failed, in producing a fully-deployed cost-effective alternative to fossil-fuels for the automotive industry. Being the 5th largest land mass in the World, in an unequalled eco-system with good soil, warm climate and plenty of rain, Brazil is perfect for mass production of ethanol from sugar-cane. As a result ethanol can be produced and consumed cheaper/mile than gasoline, and so by 2009 the majority of “petrol stations” in Brazil are now “fuel stations” providing ethanol for flex-fuel cars.
Despite the abundance of land in Brazil, and the extremely agreeable climate, the fight for food and ethanol crops have until recently affected an otherwise rapid progress in both solar and wind energy developments. This year things are set to change with the governments first renewable energy auction on November 25th. Some projects include the Rio do Fogo wind farm in Rio Grande do Norte by Iberdrola, four wind parks in Ceara by Citigroup to generate 342MW, Ventania plan to offer another 10 projects with a capacity of 350MW and Brazilian firm Bioenergy plan to invest $1bn to deliver 4 more wind farms of up to 530MW in the north east.
Despite all the above, Brazil’s economic wealth continues with the oil industry itself still growing - having recently successfully extracted oil from what is considered potentially the largest offshore oil field ever discovered, the Tupi oil-field off Rio do Janeiro. Petrobas, the state-run company, is now drilling in over 2km of water and will continue test new holes for 15 months, whilst commercial production of up to 15,000 barrels/day is expected to commence imminently, reaching 1m barrels/day once all Tupi’s fields are up and running. Not only a further significant boost to the Brazil economy, one still strengthening despite the global crisis, Brazil will also re-inforce the oil industry with heavy future demands on drillships and drill equipment.
Knight Frank’s Wealth Report 09
Knight Frank’s “Wealth Report 2009″ in conjunction with Citi Private Bank rates Brazil in the World’s Top 10 for current real estate investment. According to survey’s conducted via Citi Private Bank’s wealth managers acting for 2000 of the world’s wealthiest individuals globally, over 54% of global HNWI’s plan to INCREASE their exposure to residential property in the next 2 years. This shows a large amount of confidence by the savviest of the worlds investors in residential real estate, in sharp contrast to equities of which 55% HNWI’s already decreased their equity exposure in 2008. These results show that when times get tough, even the wealthiest still take the view that you should only invest in things you understand… property, we can see it, we can touch it, and we still want it!
As to where they would invest, Knight Frank and Citi Private Bank also reveal the top ten Worldwide sectors forecast as the wisest real estate investments of 2009. Unsurprisingly following the credit crunch distressed real estate (struggling developers and owners) in the US and UK are both highly recommended, with the best discounts over 50% below their 2008 peak. In the luxury lifestyle markets Knight Frank forecasts best opportunities in marina projects such as Porto Montenegro in Kotor Bay, Tuscany Italy, and Northern Brazil due to Brazils improving infrastructure, booming tourism, shortage of luxury resort projects and also the strong economy most recently boosted by the Tupi offshore oil-field and surging bio-fuel markets.
Brazil, Rio Olympic Bid
Already revelling in the glory and honour of hosting the 2014 FIFA World Cup, Brazil is now one step closer to fulfilling its last great dream – of hosting the Olympics. The 13 members of the International Olympic Committee visited Rio do Janeiro last week and left with a resounding nod of confidence to the Latin American hotspot. “Everything we saw here was positive” said Nawal El Moutawakel.
Escorted by footballing legend Pele and Brazil President Lula da Silva, the Olympic committee only have Madrid left to visit before casting their deciding votes in the next few months.
For Brazil it would be the greatest achievement and honour to host the two most prestigious global sporting events within 2 years; the FIFA World Cup and then the Olympics. More than this, success will only finally prove to the World that not only is Brazil now capable of handling such major events, but more importantly will give proof of the country’s continually surging popularity, importance and power on the global stage.
Brazil’s time as a leading global player certainly seems to be coming.
Brazil and China primary trading partners
Brazil is the World’s leading exporter in many extremely vital goods such as coffee, soya and iron ore. Due to being the Worlds 5th largest land mass and with a moderate climate apt for agriculture, these and other natural resources have increased Brazil’s trading relationship with China.
Total trade with China for April 2009 reached an all-time high of $3.2bn, topping Brazil’s trade with the US for the first time. China’s demand for soya beans, iron ore and also now fuel are expected to continue this excessive trade increase over the coming years. It is now truly evident that the “global credit crunch” is affecting these two future super-powers far less than more “developed” economies.
Indeed following the recent primary drilling by Petrobas, the Brazil state-owned petroleum company, in to what is believed the largest off-shore oil field, China’s demand for fossil fuels from Brazil is expected to rally also. President Lula de Silva visits Beijing this month to meet the Chinese Premier in the hope of acquiring funding for further solar and wind projects, with oil exploration in the Brazilian Santos Basin is expected sure to be high on Mr Lula’s agenda.
Either way the future trading relationship between Brazil and China is now secured and the countries are now certain to grow together with increased trade over the coming years.
Brazil’s profitable real estate investment - luxury and affordable
Brazil’s leading position for real estate investment is unquestioned, as Knight Frank has named Brazil as one of 10 emerging global opportunities in real estate this year, however where best to put your funds is a tough decision.
With stunning coastlines, diverse eco-systems and increasing flight patterns from Europe and the US to over 40 major airports, the Luxury Real Estate market is set to boom. With the Brazilian governments $1.7bn PRODETUR infrastructure investment program focused on Rio Grande do Norte, the state closest to both Europe and the US and 4 hours closer than Rio, improving roads, bridges and building the Worlds 7th largest airport, this is a prime zone for future tourism growth. Already highlighted by the World Travel and Tourism Council, the rapid development of the luxury real estate and resort market is a certainty. With a few luxury resort projects finally now under construction to the north of Natal City, some endorsed by international football and formula 1 stars bringing athletic academies to the area as well, the luxury real estate market in this “European corner” of Brazil is undoubtedly a great investment.
For those less interested in enjoying their investments from a personal perspective, Brazil has many opportunities with Sao Paulo the powerhouse of South America still delivering high rental yields to owners, although investments here need to be all cash as the mortgage market has not yet developed. Brazil also has a severe affordable housing shortage, something which President Lula has been attacking head on including a $15bn stimulus package. The ambitious “My House My Life” program aims to deliver one million houses to the poorest families in the country over the coming years, with special funds allocated to support any repayment defaults also. Willow Rivers are investigating how international investors can become involved through sensible, relevant and profitable investments.
REDD in Action from Brazil to Kenya
Companies like ImageTree and centres like Woods Hole Research Centre in the US are providing two of the Worlds largest populations, Indonesia (4th) and Brazil (5th), with hope for reaching their carbon reduction goals. As two of the largest Green House Gas emitters, ranked 3rd and 4th respectively in the World, Indonesia and Brazil both have serious deforestation problems which cause the majority of their carbon emissions. Whilst we still have until Dec 09 in Copenhagen to find out what the COP decide to do with regards to any implementation of REDD policies, it is at least certain that some REDD activities and incentives will commence soon. Once the best form and methods of REDD implementation is decided, whether at a project or government-level and whether via the carbon market or an incentivized fund method, it will only be a matter of time before REDD activities become the norm. Very soon the REDD-related technologies behind forest carbon level analysis and deforestation rate assessment, protection and prevention, as such developed by ImageTree and Woods Hole Research Centre, are sure to be in high demand by global governments in the future.
Meanwhile in other areas of the World some countries are ploughing ahead with their REDD plans despite the certainty of the final outcome. In Kenya for example the Kenya Forest Service (KFS) have now signed a deal to protect their 80,000 acre natural wildlife area, with the entire project funded by sale of the land’s carbon credit values in the Voluntary Carbon market, as certified by the Voluntary Carbon Standard (VCS). For many of the twelve nations to originally receive funds from the World Bank’s Forest Carbon Partnership Facility the time to act is now!
Brazil’s Resilient Economy
Brazil has long been a country of immense attractiveness to Willow Rivers for its investment opportunities in real estate and renewable energy. Here are just a few significant facts outlining why Brazil’s economy has fared much better during the recent economic crisis;
- Current account deficit to remain low at 2% of GDP throughout 2009 and over $200bn in cash reserves
- Less than 15% of trade with the US, ensuring minimum credit crunch fall-out
- Less than 15% of the real estate market value is mortgaged or geared, resulting in no toxic debt and much less volatile real estate pricing
- FDI in 2007 doubled to $34.7bn, eclipsing both India and Japan
- 9th largest economy with $1.3trn GDP, predicted 5th by 2030 by Goldman Sachs
- Leading exporter in sugar, coffee, beef, aircraft, mobile phones, vehicles, footwear and iron ore
- Brazil is completely self-sufficient in oil and bio-fuels and as the 5th largest land mass has enormous resources for alternative energies
- A recent discovery of what is believed to be the world’s largest offshore oilfield “Tupi”, where Petrobas recently started drilling
- Unemployment down to 8% over the past 6 years
- Tourism is a major contributor to the economy, with some 5.2 million visitors arriving in 2008 alone, and host of the 2014 FIFA World Cup will continue to help things
