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Carbon & biodiversity credits: the role of Latin America

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By Patricio Lombardi

· 6 min read

In the face of the unprecedented challenges posed by the ecological crisis, our world stands at a critical crossroads where decisive climate action becomes imperative for survival. Not too long ago, in January 2020, the World Economic Forum in Davos released a report in partnership with PwC UK, which found that 55% of the global GDP is highly dependent on nature.

Two weeks after that statement, the whole world economy came to a halt and every single city in the world experienced the deep silence of empty streets. It is very difficult to follow the thesis that only half the world economy depends on nature.

The pandemic came to show us that we all live under the same roof and if we continue to damage the health of our planet, we will face consequences in our own health. A holistic approach is needed, bringing climate change, biodiversity loss, pollution and global health into the equation.  

Earth Overshoot Day marks the date when humanity's demand for ecological resources and services in a given year exceeds what Earth can regenerate in that year. In 2023, it fell on 2 August.

We consume 1.6 planets a year, which puts us in a clear environmental default. With each passing year, we use the planet's resources at a faster rate than they can recover.

the economic system promoted after the last industrial revolution prioritised economic growth over human well-being, leading to unsustainable development and the global environmental crisis we face today.

GDP is not real because nature is a blind spot in economics. The most widely used indicator for governments, economists and investors around the world is GDP. Yet, it is not a truthful reference because it doesn't consider nature or natural capital, among other key indicators that are not considered. 

We are taking nature for granted

If nature is not considered in the official statistics, how can it survive human action? Who defends biodiversity? How much more pollution and extreme heat can the planet withstand?

The year 2015 was very important for the planet. The announcement by the United Nations of the SDGs (Sustainable Development Goals) was released. The SDGs comprise 17 targets and objectives to be achieved, for all of us living under the same roof. However, after 8 years of that announcement, only 12% of the SDGs are on the right track according to the United Nations as of May 2023.

Should we continue to talk about Agenda 2030 and turn a blind eye to the issues? It is as if we are avoiding the discussion of something that we are all aware of, but it's politically incorrect. In other words, the UN has officially confirmed that 88 percent of the targets are off track and more than half of the deadline has passed.

In the same year, the Paris Agreement was signed by 196 countries, where articles 6.2, 6.4, and 6.8 offered opportunities for collaboration among countries, the private sector, and local communities in the fight against climate change and environmental protection. By facilitating the implementation of conservation and sustainability projects, the right implementation of these articles can have significant benefits for nature.

The Lancet Planetary Health is a key resource for comprehensive solutions. According to their research, the Global North is responsible for 92% of excess global carbon emissions.

Leadership and commitment are crucial to enable an inclusive and ambitious development agenda, showcasing that transformation is possible. Businesses can play a vital role in achieving emission reduction and removal targets by participating in the carbon market. Such collaborations can lead to powerful alliances benefiting both the environment and the economy

Every single business, everywhere in the world, depends on nature in some way. Biodiversity and primary forests are the operating systems of nature.

The drivers of good environmental practices in the private sector are driven by consumers rather than regulation. These kinds of short-term outcomes will not solve the climate crisis. That is why government regulations and deep commitment is key to achieving a sustainable positive impact.

Every year more governments around the world recognized that the climate, planetary health and natural loss agendas are inextricably intertwined. One cannot be solved without the other.

In this scenario, Latin American leaders have a great opportunity to play a key and active role in climate justice, protecting the planet's last reservoir and source of life called biodiversity.

Hard data from the Global South 

We cannot overlook the leading role of Latin America in facing the ecological crisis.

10 out of the 12 most biodiverse countries in the world are located in the Global South. 6 are in Latin America, 2 are in South Asia, 1 is in Oceania, and 1 is in Africa

Recently, a remarkable number of Latin American governments have taken decisive steps to establish a framework for developing carbon markets in their jurisdictions.

Colombia and Mexico have both led the development of carbon project schemes in the region; Uruguay and Peru have signed agreements with Switzerland; Ecuador is releasing its national framework for carbon markets, and has secured a record-breaking debt-for-climate swap agreement to protect the Galapagos islands; Brazil could generate more than $100 billion from the carbon market, according to the country's ministry of economy, and the parliament is expected to regulate the Brazilian emissions reduction market by the end of 2023.

Likewise, Argentina's national carbon market strategy is expected to be launched by 2024. While the national government is currently building consensus to finalise the document that will set the guidelines for the implementation of carbon markets in its own territory, in recent years there have been local developments from subnational states and private actors that are advancing in voluntary carbon market schemes.

A 21st century regional movement is needed: the OPEC case 

The OPEC, which stands for Organization of the Petroleum Exporting Countries, was created in the 20th century in the Middle East where five founding member countries signed an agreement more than 60 years ago to coordinate policies and ensure a unified voice in the international oil market.

Though this example may sound extreme, it allows for a better understanding of the immense opportunities offered by natural capital in Latin America and the ecosystem services provided by its biodiverse biomes and the key role of international cooperation in ensuring their protection and sustainable management. 

In a similar vein, the Latin American region can follow OPEC's example by creating an organization of biodiversity-rich countries. By joining forces, they can protect and preserve valuable ecosystem services, exactly what the 21st century needs today. 

By using environmental or carbon markets with fairness, the region can make a huge contribution to the current ecological crisis, receiving international funding rather than increasing debt, while protecting and preserving primary forests, sources of biodiversity and home of ancestral and local knowledge.

Final thoughts

With the United Nations Secretary-General's stark warning about the era of global boiling, the urgency for action has never been more evident. The time is now, and we need a collective mindset. 

Ambitious words must be matched by resolute actions. There's no room for complacency. We have all the information needed — now, it's our responsibility to act decisively.

illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability & Energy writers, their opinions do not necessarily represent those of illuminem.

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About the author

Patricio Lombardi is the Executive Director of the Environmental Markets Fairness Foundation, a strategic alliance forged between regions, governments and civil organizations from the Global South. Patricio was the first ever appointed climate minister in the Americas, as Secretary of Climate Change of Argentina.

Patricio is a confirmed keynote speaker at Terra Tuscany, the sustainability leaders offsite powered by illuminem.

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