Financial Feasibility of Carbon Sequestration in Serra de Baturité, Ceara state, Brazil in 2012

ABSTRACTThe aim of this study was to estimate the biomass and CO2 sink and evaluate the economic viability of the generation of carbon credits in the Environmentally Protected Area (EPA) of Serra de Baturité, Ceara state, Brazil. The assessment of aboveground biomass was estimated by the non-destructive method, and the economic criteria used to evaluate were the Net Present Value (VPL), Equivalent Annual Value (EAV) and Internal Rate of Return (IRR). The results show that the rainforest of the Serra de Baturité EPA sequestered 84.63 MtCO2e and that, according to market prices and costs in 2012, forestry projects for carbon sequestration can generate an EAV of R$ 1,336 (IRR: 21%) per hectare if it is sold in the New Zealand Emissions Trading Scheme (NZ ETS) market, R$ 2,138 (IRR: 18%) if it is sold in the Verified Carbon Standard (VCS) market, and R$ - 702.5 if it is sold in the Clean Development Mechanism (CDM) regulated market. In short, the project is viable if carbon credits are sold in the voluntary markets, otherwise it is unviable.