Unprecedented estimate may serve as a reference for the voluntary carbon market and for payment for environmental services, as well as other sustainability initiatives Pricing indicates how much should be paid for greenhouse gases that are not emitted by the activity, in order to cover the associated economic, social, and environmental costs. The value also helps to reference government emission reduction programs. Study considered 297 municipalities in the Brazilian citrus belt, in the Southeast region. Each hectare of citrus groves stores about two tons of carbon per year. The price of carbon in Brazilian citrus farming has been estimated at US$ 7.72 per ton of carbon dioxide equivalent (tCO2e).This is the first time an estimate has been determined for orange production. This indicator can serve as a reference for the voluntary carbon market, as well as for other sustainability initiatives, such as payments for environmental services. The price was estimate by a team from Embrapa Territorial, in a study presented at the 62nd Congress of the Brazilian Society of Rural Economics, Administration, and Sociology (Sober). Daniela Tatiane de Souza, an analyst at Embrapa, states that there are few scientific studies in Brazil to price carbon in agriculture, and none focused on the citrus sector, one of the most prominent among the national agribusiness export chains. Additionally, there is not yet a regulated carbon market in agriculture that would allow effectively practiced values to be measured. "What we are doing is proactive work to outline perspectives and establish references based on internationally adopted methodologies," she explains. Carbon dioxide as the standard unit Because carbon dioxide is the most emitted greenhouse gas (GHG) in the atmosphere since the beginning of industrialization, it has become an environmental indicator. For comparative purposes and market standardization, the generation of other GHGs and environmental impact agents are converted into tons of CO2 equivalent for measurement and valuation. Estimating the price of carbon for an economic activity creates a financial incentive to invest in more sustainable technologies and practices. For example, improving fertilization practices to reduce the use of nitrogen and the emission of nitrous oxide - another significant GHG - into the atmosphere. "Since reducing GHG emissions and removing CO2 from the atmosphere have a cost (social, economic, and environmental), pricing is necessary to know how much to pay for a ton of CO2 equivalent that was not emitted or that was removed from the atmosphere by an activity or project. Carbon pricing serves as a reference for those who will receive and for those who will pay for it. Of course, it is just a reference because when you already have a certified emission reduction (CER), you can negotiate higher values than those who are just starting a project," details researcher Lauro Rodrigues Nogueira Júnior. "This value also serves for government programs aimed at reducing emissions and in need of references, as well as for payment programs for environmental services that are being implemented in Brazil," he adds. The estimated value is close to what is observed for the agricultural sector in the international voluntary carbon market. In the last three years, the average price of carbon in the voluntary agricultural market worldwide, collected by Eurosystem Marketplace, ranged from US$6.61 to US$11.02 per tCO2e. Since there are no estimates in Brazil, for comparative purposes, the Embrapa team relied on a previous study that provided an average value for the price of carbon in national agriculture and livestock. Considering monetary updates, it would be US$7 per tCO2e – very close to the US$ 7.72 per tCO2e estimated for the citrus sector. Photos: Carlos Ronquim Calculations The calculations for the citrus sector were made based on socio-economic and environmental data, combining two sets of determinants: the "social cost of carbon" and the "marginal abatement cost." The first assigns a monetary value to the environmental and social consequences of greenhouse gas emissions and climate change. The second includes the technological cost of reducing these emissions. "We produced a model, a simulation of what the price of carbon in Brazilian citrus farming could be based on a set of determinants that impact the price of carbon in agriculture", Souza detailed. For the estimate, 297 municipalities in the citrus belt, which includes the state of São Paulo and the Southwest/Triangle of Minas Gerais, were considered. The team used data such as municipal Gross Domestic Product (GDP) and the agricultural share in this indicator, per capita CO2 emissions, municipal area and its portion allocated to native vegetation preservation. The higher the GDP of a locality, the higher the carbon value, since a more dynamic economy tends to generate higher GHG emissions. Carbon and wildlife in citrus farming The work is part of a research project by Embrapa and the Fund for Citrus Protection (Fundecitrus), which evaluates the dynamics of carbon stocks and wildlife biodiversity in citrus areas in São Paulo and Minas Gerais. The project was selected by the British company innocent drinks' Farmer Innovation Fund, which provides funding to its ingredient suppliers in initiatives that support the transition to low-carbon agriculture, higher biodiversity and fairer farming practices. The research estimated the carbon stocks in the citrus belt at 36 million tons, in groves, soil, and areas with native vegetation within producing farms. "Today we know that one hectare of citrus stores approximately two tons of carbon per year, which is equivalent to 7.32 t/CO2," says Nogueira Jr. It was an unprecedented work that collected data to estimate the volume of carbon stored in Brazilian orange trees and reached an average of 50 kilograms of carbon per tree. The same project identified 314 species of wild animals in the Brazilian citrus belt. They spotted or found traces of 268 birds, 28 mammals, and 18 amphibians and reptiles. The puma, ocelot, and maned wolf were some of the large animals caught by sensor cameras at night. Others were seen and photographed or identified by their tracks, feces, nests, and other traces. Photo: Embrapa/Fundecitrus The world's largest orange juice producer Brazil is responsible for 35% of the world's orange production and 75% of the international orange juice trade. In the last harvest, production reached 307.22 million boxes, and juice exports exceeded 2.8 million tons. There are 463,000 hectares of groves just in the citrus belt, the main producing region, where the juice processing and coproduct industries are also concentrated. The sector moves about US$14 billion a year.
Photo: Carlos Ronquim
Estimate for orange production can serve as a reference for the voluntary carbon market.
Unprecedented estimate may serve as a reference for the voluntary carbon market and for payment for environmental services, as well as other sustainability initiatives
Pricing indicates how much should be paid for greenhouse gases that are not emitted by the activity, in order to cover the associated economic, social, and environmental costs.
The value also helps to reference government emission reduction programs.
Study considered 297 municipalities in the Brazilian citrus belt, in the Southeast region.
Each hectare of citrus groves stores about two tons of carbon per year.
The price of carbon in Brazilian citrus farming has been estimated at US$ 7.72 per ton of carbon dioxide equivalent (tCO2e).This is the first time an estimate has been determined for orange production. This indicator can serve as a reference for the voluntary carbon market, as well as for other sustainability initiatives, such as payments for environmental services. The price was estimate by a team from Embrapa Territorial, in a study presented at the 62nd Congress of the Brazilian Society of Rural Economics, Administration, and Sociology (Sober).
Daniela Tatiane de Souza, an analyst at Embrapa, states that there are few scientific studies in Brazil to price carbon in agriculture, and none focused on the citrus sector, one of the most prominent among the national agribusiness export chains. Additionally, there is not yet a regulated carbon market in agriculture that would allow effectively practiced values to be measured. "What we are doing is proactive work to outline perspectives and establish references based on internationally adopted methodologies," she explains.
Carbon dioxide as the standard unit
Because carbon dioxide is the most emitted greenhouse gas (GHG) in the atmosphere since the beginning of industrialization, it has become an environmental indicator. For comparative purposes and market standardization, the generation of other GHGs and environmental impact agents are converted into tons of CO2 equivalent for measurement and valuation. Estimating the price of carbon for an economic activity creates a financial incentive to invest in more sustainable technologies and practices. For example, improving fertilization practices to reduce the use of nitrogen and the emission of nitrous oxide - another significant GHG - into the atmosphere.
"Since reducing GHG emissions and removing CO2 from the atmosphere have a cost (social, economic, and environmental), pricing is necessary to know how much to pay for a ton of CO2 equivalent that was not emitted or that was removed from the atmosphere by an activity or project. Carbon pricing serves as a reference for those who will receive and for those who will pay for it. Of course, it is just a reference because when you already have a certified emission reduction (CER), you can negotiate higher values than those who are just starting a project," details researcher Lauro Rodrigues Nogueira Júnior. "This value also serves for government programs aimed at reducing emissions and in need of references, as well as for payment programs for environmental services that are being implemented in Brazil," he adds.
The estimated value is close to what is observed for the agricultural sector in the international voluntary carbon market. In the last three years, the average price of carbon in the voluntary agricultural market worldwide, collected by Eurosystem Marketplace, ranged from US$6.61 to US$11.02 per tCO2e. Since there are no estimates in Brazil, for comparative purposes, the Embrapa team relied on a previous study that provided an average value for the price of carbon in national agriculture and livestock. Considering monetary updates, it would be US$7 per tCO2e – very close to the US$ 7.72 per tCO2e estimated for the citrus sector.
Photos: Carlos Ronquim
Calculations
The calculations for the citrus sector were made based on socio-economic and environmental data, combining two sets of determinants: the "social cost of carbon" and the "marginal abatement cost." The first assigns a monetary value to the environmental and social consequences of greenhouse gas emissions and climate change. The second includes the technological cost of reducing these emissions. "We produced a model, a simulation of what the price of carbon in Brazilian citrus farming could be based on a set of determinants that impact the price of carbon in agriculture", Souza detailed.
For the estimate, 297 municipalities in the citrus belt, which includes the state of São Paulo and the Southwest/Triangle of Minas Gerais, were considered. The team used data such as municipal Gross Domestic Product (GDP) and the agricultural share in this indicator, per capita CO2 emissions, municipal area and its portion allocated to native vegetation preservation. The higher the GDP of a locality, the higher the carbon value, since a more dynamic economy tends to generate higher GHG emissions.
Carbon and wildlife in citrus farming
The work is part of a research project by Embrapa and the Fund for Citrus Protection (Fundecitrus), which evaluates the dynamics of carbon stocks and wildlife biodiversity in citrus areas in São Paulo and Minas Gerais. The project was selected by the British company innocent drinks' Farmer Innovation Fund, which provides funding to its ingredient suppliers in initiatives that support the transition to low-carbon agriculture, higher biodiversity and fairer farming practices.
The research estimated the carbon stocks in the citrus belt at 36 million tons, in groves, soil, and areas with native vegetation within producing farms. "Today we know that one hectare of citrus stores approximately two tons of carbon per year, which is equivalent to 7.32 t/CO2," says Nogueira Jr. It was an unprecedented work that collected data to estimate the volume of carbon stored in Brazilian orange trees and reached an average of 50 kilograms of carbon per tree.
The same project identified 314 species of wild animals in the Brazilian citrus belt. They spotted or found traces of 268 birds, 28 mammals, and 18 amphibians and reptiles. The puma, ocelot, and maned wolf were some of the large animals caught by sensor cameras at night. Others were seen and photographed or identified by their tracks, feces, nests, and other traces.
Photo: Embrapa/Fundecitrus
The world's largest orange juice producer
Brazil is responsible for 35% of the world's orange production and 75% of the international orange juice trade. In the last harvest, production reached 307.22 million boxes, and juice exports exceeded 2.8 million tons. There are 463,000 hectares of groves just in the citrus belt, the main producing region, where the juice processing and coproduct industries are also concentrated. The sector moves about US$14 billion a year.
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Carbon dioxide as the standard unit
