Carbon trading mega project in Brazil
Brazil has struck the largest carbon trading deal to date with the Dutch government. Brazil has sold 5 million tonnes of carbon dioxide equivalent emissions to the Dutch government as part of a project, which will help reduce over 21 million tonnes of carbon dioxide equivalent emissions in the next 21 years. Under the project, the company Vallourec & Mannesmann do Brasil (v&m do Brasil) will manufacture steel using charcoal from tree plantations.
Investors include the International Finance Corporation (ifc), which is acting on behalf of the Dutch government, and Toyota Tsusho Corporation. The ifc has paid about us $3 per tonne of carbon dioxide equivalent emissions to v&m do Brasil.
The agreement was inked under the Clean Development Mechanism (cdm) of the Kyoto Protocol. cdm allows industrialised countries to meet their protocol commitments partly to reduce greenhouse gas (GHG) emissions by investing in clean energy projects in developing countries. Under the protocol, the Netherlands has to bring its GHG emissions to eight per cent below the 1990 level by 2012, while for Japan the target is six per cent. The project has been validated as per the cdm rules.