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Contribution of carbon credits in the economic viability of forest promotion contracts in southern Bahia

The region in the extreme south of Bahia is characterized by its extensive production of eucalyptus. Large enterprises of the pulp and paper industry play an important role in the economy of the region through forest promotion programs. Added to that, some producers encouraged, by these companies, have interest in increasing the financial return of their forestry promotion contracts through the carbon credit receipt. In this context, this work aims to assess the contribution of carbon credits in the economic viability in forest promotion contracts in the region. The Net Present Value (NPV), Internal Rate of Return (IRR) and Equivalent Annual Value (EAV) were the indicators used in the financial evaluation, using a discount rate of 10% per year for 45 promotion contracts distributed in eleven municipalities in the region and the potential carbon stocking was estimated using data carbon stock at the moment the contracts reached a mature cutting technique. Forestry producers reported data concerning production, productivity and profitability of eucalyptus plantations in their contracts. The search results show that the sale of carbon credits may significantly increase the financial viability of the contract. In this way, it can be concluded that the trade in carbon credits is a viable activity in the region and encourages increases in producers' gains..

Forest promotion; Carbon credits; Economic analysis


Sociedade de Investigações Florestais Universidade Federal de Viçosa, CEP: 36570-900 - Viçosa - Minas Gerais - Brazil, Tel: (55 31) 3612-3959 - Viçosa - MG - Brazil
E-mail: rarvore@sif.org.br