331: Inside COP: The fight for the Amazon
In this episode, we’re looking at one of the biggest themes of the COP30 Action Agenda: protecting the Amazon forests: crucial ecosystems, carbon sinks and centres of cultural and biodiversity.
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About this episode
As ministers arrive in Belém for the crucial second week of COP30, forests move from the backdrop of the summit to the main stage. Protests began at dawn on Friday and have continued through the weekend - among them, several activists carried a giant Brazilian flag, emblazoned with the words “Amazȏnia Protegida” (“Protected Amazon”).
From the streets outside to the plenary halls in the Blue Zone, trees, land and Indigenous stewardship are shaping this summit’s conversation. In this episode, Paul Dickinson and Fiona McRaith dig into this moment of forest urgency and turn their attention to one of the biggest themes of the COP30 Action Agenda: protecting these crucial ecosystems, carbon sinks and centres of cultural and biodiversity.
Paul speaks with some of those behind the Race to Belém initiative - a real-world case study in how one Brazilian state, Tocantins, is rewriting the rules of forest protection. We hear Christiana Figueres and Mindahi Bastida, Convenor of the Earth Elders Council, on what genuine stewardship means and why so many Indigenous communities are the best equipped to care for their native lands. And Fiona reports to us from a project in the Amazon rainforest itself, where she met local producers building a sustainable bio-economy from the forest’s living wealth.
The Brazilians have brought the world to the Amazon and put forests at the heart of this COP. What will be the legacy of COP30 for the forests of Brazil and beyond, that so desperately need protecting?
Learn more:
🌴 Read about the Tropical Forests Forever Facility
📊 Explore the Forest Declaration Assessment and its 2025 report
🌍 Check out the official COP30 website for background and announcements
🎤 What do you want to hear on Inside COP? Ask us on SpeakPipe or on our socials where you can also see more behind the scenes moments and to watch our videos:
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Or via this form.
Lead Producer: Ben Weaver-Hincks
Planning Producer: Caitlin Hanrahan
Edited by: Miles Martignoni
Exec Producer: Ellie Clifford
With thanks to Groundswell and Global Optimism.
This is a Persephonica production for Global Optimism and is part of the Acast Creator Network.
Full Transcript
Transcript generated by AI. While we aim for accuracy, errors may still occur. Please refer to the episode’s audio for the definitive version
Paul Dickinson: [00:00:03] Hello and welcome to Inside Cop. I'm Paul Dickinson.Fiona McRaith: [00:00:07] And I'm Fiona McRaith.
Paul Dickinson: [00:00:08] Today we're going to talk about the centrality of forests to this whole process, because they're absolutely the heart of it. And here we are in the Amazon. Thanks for being here. Sophie, Tom and Cristiano have left us here. How are you feeling now? It's a very it's like halfway through this whole extraordinary process. I've arrived yesterday, so I'm kind of like, haven't got my head around it. Although I've actually been to the incredible buildings and seen the sort of vastness of it all. And I've met lovely people who I've worked with for years and had that whole kind of like, oh, wow, you know, the world's here moment. But how has it been for you when you think about the last week? It was recording Saturday, so it's kind of like a weekend juncture point coming out on Monday. What's in you about the last week?
Fiona McRaith: [00:01:02] You know, the the in-between weekend of cops are always these collective inhales. Um, Sunday is the day of rest tomorrow. And all of us, I think, will be observing that, including the negotiators. And it typically signals the shift from when ministers begin to arrive. Listeners who have been following along inside Cop will remember that this is when the high level segments have traditionally been. So, um, this is when the signals from heads of state typically would come in to kind of galvanize and reinfuse more energy. So I'm curious to see how that comes up in the second week of Cop. People will be listening to this on Monday morning, and I know I was in Rio. I know many delegates who I've met have been in Sao Paulo or Rio beforehand, so this feels like a longer sprint. So I'm curious to see how. And I think that's one of the reasons I'm really anchored and buoyed by one thing in particular. This weekend, though, I know there are many field visits. I joined one in the Amazon, which we'll talk about in a little bit, but there was also a major march.
Paul Dickinson: [00:02:04] Yeah, I heard about that today.
Fiona McRaith: [00:02:05] Actually. Saturday, thousands of marchers hit the streets of Belém calling for climate action. This is exciting. The past few cups, we haven't seen this partially because of the countries where the cops were hosted, didn't support it.
Paul Dickinson: [00:02:19] Kind of authoritarian.
Paul Dickinson: [00:02:20] Regime. Like, you know, we don't do demonstrations, right?
Fiona McRaith: [00:02:22] Yeah. And there wasn't a major demonstration in New York this year for sadly similar reasons. So I think that in itself, just seeing those images, the the stubborn optimism, the collectiveness is exactly what you were just saying. There's a sense of community here and buoyancy from that. Despite a lot of challenges that lay ahead and the centrality of forests. I mean, Christiana noted it a number of times, but we have the immense privilege and responsibility that this cop is taking place in the Amazon rainforest, one of the global tipping points. And we are at where the Amazon River and forest meet the ocean, this historic place of melting and mixing of cultures and trade. And I think we are seeking very hard, as are the delegates, to honor that history with these negotiations. So I'm fingers are crossed for some breakthroughs this week.
Paul Dickinson: [00:03:14] I think President.
Paul Dickinson: [00:03:14] Lula would be delighted to hear your analysis there. And it's true. It kind of, you know, it works. You know, there is something about like, you can't change the world with the tools that you built it with. If you go to a sort of an identical conference center in an identical city, in an identical country, you're not going to be able to think differently. And so we've been brought here for a reason. I do believe that environment has an enormous effect on people. I was interviewing someone today for the pod. We'll hear that next week. And he was talking about being in that demonstration, and he talked about tearing up, actually crying to see so many different voices, but kind of woven together. And yeah, there is something about peaceful protest which has great honor and dignity. And I think it's, it's it's a lessening of a cop that doesn't have that.
Fiona McRaith: [00:04:05] Yeah. Yeah. I and I think there are so many folks who would feel similarly or for whom that would resonate. And I know I'm certainly one of them. Yeah. Beautiful. Should we talk a little bit about forests, Paul?
Paul Dickinson: [00:04:19] Well, I mean, we talk a lot, you know, this extraordinary. I think it was probably like 26 years ago. I think I read some article in the paper about how much forest was being cut down, and I think it pushed me towards moving into working in kind of environmental protection, for want of a better word. But in 2024, 8.1 million hectares of forest were lost globally, according to the Forest Declaration assessment, 63% worse than the pace needed to meet the global Halt Deforestation 2030 goals. So what can you say about such gigantic loss of the sort of system condition that supports us? It's unbelievably shocking.
Fiona McRaith: [00:05:00] Yeah. So deforestation is still a major issue, and listeners will know well that forests alongside oceans play a especially tropical forests, absorbs huge amounts of CO2, set approximately 7 billion tonnes of CO2 each year. And that's not even to mention the water sequestration, the biodiversity and all the livelihoods that they support within them. Of course, there's still a huge, huge, massive gaping mismatch between money going into forest protection and restoration and money flowing into activities to harm forests. For example, beef and soy are major deforestation factors here in the Amazon, and the soy is to feed the cattle. So it's actually just beef. That is a major deforestation issue here in the Amazon. And again we've heard this before. But science tells us that there's a tipping point here, and if the rainforests stop getting as much rainfall, which is already happening, there's a tipping point on the horizon where they become savannah. And that would be detrimental to our planet, to us, and not to mention to the people who call this place home.
Paul Dickinson: [00:06:07] You know, when you say detrimental, like if I understand correctly, if the Amazon dies back, we've lost, you know, one of the great CO2 sinks so detrimental might seem like a little bit of an understatement. I mean.
Fiona McRaith: [00:06:19] Yeah, that might be a bit of a.
Paul Dickinson: [00:06:20] That car crash was detrimental to that. Plane crash was detrimental.
Fiona McRaith: [00:06:24] Yeah, it's a point well taken. I think it's hard sometimes to find the appropriate words for the scale of magnitude of what these things would indicate. And I also, um, optimism is a choice. Taking a step forward. And that's one of the reasons I think that it's very cool. Some of the conversations you had today, Paul, while I was in the Amazon about bringing finance in, but also we've talked about the triple F so many times before. This is a blended finance mechanism.
Paul Dickinson: [00:06:53] Tropical forests forever facility.
Fiona McRaith: [00:06:55] Both public and private capital coming together. And it's designed to turn the protection of tropical forests into a financial asset rather than just a grant based cost. Again, they're aiming to achieve 125 billion total. And just last week they announced from various pledges, 5.5 billion to get them going, which is a big step in the right direction.
Paul Dickinson: [00:07:16] Yeah. And I think that the 25 billion philanthropic and 100 billion from private equity, by the way, 25 billion. I looked it up the other day as the value of the world's superyacht market. So if you just want to know kind of where the money might come from, if people could just stop buying absolutely gigantic yachts, we'd have the money. But that's just that's just me doing my thing. Um, before we get on to the forest, though, I mean, look, you actually went today to the Amazon. Can you say a little bit about that? We were joking earlier that I think we both had this picture of going into a kind of like a cave of trees with magical creatures. Was it like that?
Fiona McRaith: [00:07:49] It wasn't quite like that. I've wanted to visit the Amazon and feel immensely privileged to be in Belem, and to have had this opportunity today to go out with a relatively intimate group of us, out to visit a community that's doing agroforestry and contributing to the bio economy. But I totally admit that, like, my imagination had gotten the best of me and I. I'm not even really sure what I was expecting.
Paul Dickinson: [00:08:14] The whole Amazon. You're going to visit the entire Amazon in one day. You're going to be back by 5:30 p.m.. I think that's right. You're going to like, just see it all. Yeah. Every creature, every thing.
Fiona McRaith: [00:08:25] Oh, to be a bird. Oh my gosh. Um, but I was so inspired by the way in which. And there are many, many local communities working with a company called Natura, and I'm sure others. But Natura was the one who took us out to visit one of their communities that they work with. And this is a cooperative community and they grow a number of different local regional plants that are indigenous to the Amazon. And then they have the first, and to my understanding, only processing plant in the Amazon. That actually takes, for example, the leaves of a certain plant and then extracts the oils from them that are then used in creams or candles or perfumes. And the the scent is, oh my gosh, so enveloping and beautiful and transporting. And it's really incredible to see the pride that this community had. They had a beautiful sign and I took a photo. Um, we can share it on our socials. That said, this path leads to our dreams or something along that line. They used to walk this path from their community and through the forest which they shared with us.
Fiona McRaith: [00:09:41] And the sign hangs. And in your eye eyeline is the oil extraction plant. And this isn't like bad oil. This is taking again leaves and compressing them down into the, um, the essential oils from that plant. The sound you might be able to hear in the background is, uh, the condenser. The condenser machines, which are pressing 300 kilos of leaves to make, like a very, very little amount of oil. That's what you can hear in the background. It was just amazing. And they said, of course, that the community is retaining so much more value for that plant. So rather than selling the raw material like the leaves of the plant, they're able to sell a product that returns more value to their community. So they've been able to set up water filtration systems for their community. And it's helping keep young people in their community because it's jobs. And that, to me was a beautiful, beautiful illustration of how people and communities and companies can come together to save the forest while maintaining brilliant livelihoods.
Paul Dickinson: [00:10:52] It sounds like a fun trip. So, um, in terms of the Tropical forest River facility, I understand 20% of funds are reserved to flow directly to indigenous people and local communities. And maybe this is not a bad time to share with you a few moments of a conversation that Christiana had last week with two indigenous leaders, and will play the full recording a bit later. You're just going to hear from one of them here. Mindahi Bastida, the general coordinator of the Otomi Toltec Regional Council in Mexico and a caretaker of the philosophy and traditions of the Otomi Toltec peoples. He's also the father of Sebastiana, who we've had on the podcast before and is an incredibly inspiring climate leader. So let's hear this extract.
Christiana Figueres: [00:11:40] The Brazilian Cop presidency has been, I think, the first climate Cop presidency that truly recognizes the important role of indigenous peoples of First Nation peoples in protecting nature, in protecting standing forests. I would say that that role has been more viewed as a token, and I think this is the beginning of taking it more seriously. Would you agree with that?
Mindahi Bastida: [00:12:22] Yes. I think there is a growing interest in acknowledging original nations and peoples, so-called indigenous peoples, First Nations. We see how even the media and the social media is also very active. So this government, in particular the government of Brazil, is, um, trying to to acknowledge this movement because we cannot disassociate the forest with peoples.
Christiana Figueres: [00:12:56] Exactly.
Mindahi Bastida: [00:12:57] Because we are forest peoples. And so we understand that biodiversity, we are also biodiversity, but culture and biological diversity is intertwined. So we call for this biocultural sense of being the heritage, biocultural heritage, but also biocultural diversity. And this is what we really appreciate from these efforts that are happening little by little. Because when you see those images, the jaguar, you see the the pirates, macaws, you see the trees, but also the people is because we are family and they are depicted everywhere around. So I feel very good coming here. I feel welcomed and even a, you know, the rivers and the, the seas even there is pollution. Okay. But they are doing as much as they can to change that paradigm of reconnecting, because the paradigm that is taking us to this civilizational crisis is, is that we need to recover also human dignity.
Christiana Figueres: [00:14:10] Well, recover human dignity. Yes. And remember where we come from. Remember our true nature, which is nature, as you have pointed out. And you know, it continues to be a mystery to me why we forgot this. Why do we have to be reminded. Why does it take a new mindset, something that you have not forgotten but that so many other peoples have forgotten? And so, while I celebrate that we are beginning to remember, why did we forget that we're all. That we're all nature?
Fiona McRaith: [00:15:01] Paul, what are some of your core reflections from those conversations?
Paul Dickinson: [00:15:06] Well, it's profound when someone says, we cannot disassociate the forest from the the peoples. And I was thinking about that because it's like, you know, on the one hand, the people may be involved in the forest the same way the trees are involved in the forest and the, you know, the insects are involved in the forest. There is a sort of unity of the biota of which we are one part. But actually at another level, I thought to myself, well, the indigenous people are the standing guardians of our lifeline. You know, I live in London, a long way away from the Amazon. But if the Amazon's gone, I won't be able to live in London. The indigenous are standing protecting my life support system. And so yeah, that's that's a very profound role that they play. And and the IPCC, the scientists have have spoken increasingly in their reports about how we need to respect and learn from indigenous wisdom in our clumsy efforts to manage this world.
Fiona McRaith: [00:16:06] Yeah, I think I think that point was so, so beautifully put by him and Paul, by your reflection. Um, you also had a couple conversations about the race to Belem. Which one? What is that?
Paul Dickinson: [00:16:21] What is the race?
Fiona McRaith: [00:16:23] Dear listeners, what is the race to?
Paul Dickinson: [00:16:25] Well, the race is the most complex, uh, interviewing challenge I've ever faced because there was me and four people who came in two waves, the visionaries behind the mayhem, and then the people who were operationalizing it. But I mean, fundamentally, it's an incredibly innovative initiative. I took from it a sense of people really thinking hard about how to bring money from the private sector, almost like a new kind of financing structure that you can trust because it's backed by government. Load More
Fiona McRaith: [00:16:57] You know, we've talked a lot about mobilizing finance, including with the triple F, and US governments have a crucial big role to play in financing many of these implementation solutions and measures. And there are major gaps. And as you just said so to businesses and mechanisms to enable finance from businesses flowing to protect forests are incredibly important. And I look forward to learning more.
Paul Dickinson: [00:17:27] Let's hear from them. An absolutely great team. Okay, so I think just when you start off with your names and. Okay.
Celso Fiori: [00:17:39] Thanks, Paul. My name is Celso Fiori . I'm the head of environmental products at Sylvania in Brazil.
Natália Renteria: [00:17:45] Natalia Renteria, country director for Brazil.
Carolina Gueiros: [00:17:48] I'm Carolina Gueiros. I am the project management officer on the side of Sylvania for the JREDD program in the state of Tocantins.
Keith Tuffley: [00:17:57] Keith Tuffley, CEO of Race to Belem.
Paul Dickinson: [00:17:59] Well, today we got the most amazing interview about going on a journey about the race to Belem, which is about perhaps the most important thing in the world right now, and why we are all here in Berlin about stopping deforestation. Let me start off, I guess, with you, Keith. What's the vision behind this? How did it happen? Frame it for us. How did it come into the world?
Keith Tuffley: [00:18:22] Well, thanks, Paul. Um. And it's great to be on. Yeah. Which what we're trying to do is to help stop and slow down deforestation and degradation. Our focus with this campaign is called Race to Blend, because it's a ten month campaign to try and accelerate private capital to be generated and mobilized into Brazil to slow down and ultimately stop deforestation and degradation. We all know the forest crisis that's happening. What we've got to do is get the vast amount of private capital to address the problem. I should clarify, there's private sector capital. So we're not looking for for public capital, for government capital, nor are we looking for philanthropic capital. It's the private sector. That's where the vast majority of the world's capital is. So it's trying to mobilize that to address what ultimately is a problem that will affect all of us, which is ongoing deforestation and degradation of tropical forests around the world.
Paul Dickinson: [00:19:13] Now, a horrible thing happened in the 1970s or 80s. I think it was called maximizing shareholder value and maximizing shareholder value, said that you've got to give every single last bean to the shareholders, and not a penny for anybody else. But are you suggesting that there's a way to square that and that corporations can support something without necessarily directly getting a kind of tangible benefit.
Keith Tuffley: [00:19:34] Well, ultimately, this is about maximizing shareholder value because we're all impacted if we continue to DeForest the Amazon and other forest biomes in Brazil, you know, in the next 15 years or so. The scientists are saying we'll reach a tipping point in the Amazon if we continue deforestation rates, which means that the Amazon itself can turn into an irreversible change. The whole water cycle in South America can change if we continue deforestation at these rates. Brazil is the biggest net exporter of food in the world, so we will all be impacted if we continue this deforestation because it changes that entire ecological system in Brazil. So ultimately, we're all consumers of food democracies, and political systems and stability rely on ultimately food and water. That is the single most important things we need on the planet. So what? That's what we're talking about. That's the importance of it. And therefore companies, whether you're an agriculture company or any company, will ultimately be affected if we don't address this crisis. The mechanism we're using is what we call jurisdictional red. So this is looking at the system as a whole in a jurisdiction at the state level.
Paul Dickinson: [00:20:42] Okay. Now jurisdiction I understand that means land a particular region. What is red. And I think you're using two D's and possibly a plus.
Keith Tuffley: [00:20:50] Yep. So reduction in deforestation and degradation of forests at a jurisdictional level.
Paul Dickinson: [00:20:56] Give us a little bit of a history of red.
Carolina Gueiros: [00:20:58] It's a concept that has been around for a long time.
Paul Dickinson: [00:21:01] I mean like roughly roughly.
Carolina Gueiros: [00:21:03] Okay. So, um, it all started back, um, in the discussions about the Kyoto Protocol back in the 90s, uh, where countries were discussing how to include forests in the climate agreement in the UNF, triple C. So there was a lot of controversy about what types of forest activities to include in the Clean Development Mechanism, which was the market based credit carbon credit exchange mechanism in the in the Kyoto Protocol. Right. So there were several technical issues with including red, which is avoided deforestation versus including RR which is reforestation and afforestation. And in the end for because of these technical issues such as leakage being the main one and also geopolitical disagreements between.
Paul Dickinson: [00:21:56] I hardly dare ask you what a leaking tree is.
Carolina Gueiros: [00:21:58] Oh, boy. Okay. So leakage is sometimes when you have some activity to protect a forest in a particular place. The harmful deforestation or degradation activity just migrates.
Paul Dickinson: [00:22:13] Gotcha.
Carolina Gueiros: [00:22:14] It leaks somewhere else. So that was a major part of the criticism about Redd+ projects is that, oh, you're just going to protect the forest here. So whatever activity was being done here can just be done elsewhere. And this is something that is really difficult to prevent and to avoid.
Paul Dickinson: [00:22:32] I've got to tell you a terrible thing that I was once told is that, you know, and you'll be familiar with this. And it's not a very nice thought, but in some senses, if there is money offered to preserve forestry, that could encourage people to consider deforestation, that wasn't necessarily thought to happen to to try and get the money. But I'm presumably you've thought about that at some length.
Carolina Gueiros: [00:22:51] Precisely. So those I'm just giving you leakage as one of the examples. But all of these technical issues with okay, so how are we going to prevent this? How are we going to measure reduction in deforestation and degradation and such and such? Combined with this disagreement between Europe and the US, basically about whether to include Redd+ in the Kyoto Protocol ended up with no agreement and Redd+ projects were not included in the Kyoto Protocol, in the Clean Development Mechanism, and the idea sort of stayed there for a while. But then in the early 2000, it was actually a group of Brazilian scientists.
Paul Dickinson: [00:23:32] Brazilian scientists, good old Brazil, the leader of the world in many more areas than people realize.
Carolina Gueiros: [00:23:36] Yes. Very true. Came up with this idea. Okay, so what about we don't do Redd+ projects, but we still think it's very important to stop deforestation and to have a financial mechanism that will incentivize that. Why don't we do it at the scale of a country, or of a very large jurisdiction, where the government will be in charge of it and will hopefully be able to do a better job to avoid all of these technical pitfalls, such as leakage. And the idea really took off around 2007. It was included. It was officially accepted as a mitigation option under the UNF triple C, but in a very different characterization. We're no longer talking about projects. We're no longer talking about offsetting. We're no longer talking about carbon credits. We're talking about policies to reduce deforestation and forest degradation at the scale of a country or subnational jurisdiction.
Paul Dickinson: [00:24:42] Which is as big as my country.
Carolina Gueiros: [00:24:44] Which in the case of Brazil can be as big as as a country or many countries.
Paul Dickinson: [00:24:48] This is you saying this is government backed, right?
Natália Renteria: [00:24:51] The whole program is led by governments. Okay. But what we have in Brazil is the whole system working together. So we will use the best of one, this, this whole system. So the best of voluntary projects, the best of programs and then the best of regulated markets. And we can use that as a whole system, a whole ecosystem market in Brazil and it's quite unique. You can't find in the world today a country that put in their, um, in their federal law, this kind of system like that, all all working together and all connected.
Keith Tuffley: [00:25:33] Okay. And as Natalia just explained, it's a system solution. It's not just buying a plot of land and saying, hey, let's stop the deforestation on this little plot. It is a systems wide. So, for example, the state of Tocantins is is the size of the United Kingdom a bit bigger? Right? And it's getting that whole state and all the elements in there to work together. The local communities, the indigenous communities, the communities, the agriculture sector, small poor farmers and the large agriculture companies led by the state government to work as a system in consultation with each other. The state is held in the order of 50 consultations around the state this year to get everyone's input, and also to to to hopefully decide together how the capital is then split to ensure that it has maximum impact and everyone feels empowered and included.
Paul Dickinson: [00:26:26] I mean, it does seem like this is almost like a kind of new way of running the world that you've got corporations from across the world funding, I guess, a kind of natural balance sheet or a natural resource. And how has it been going? I mean, have you been? What sort of levels of support have you been seeing?
Keith Tuffley: [00:26:43] Well, it is a journey of education and understanding for some companies. You really got to start right from the start to get them to understand, okay, what this actually means. There are other companies who are really engaged. They understand already what jurisdictional red is, and there's every company in between. What I will say is that there's an enormous amount of momentum now. We're very close to signing contracts with some very major companies who are right on board, and we're also sensing a strong level of interest from other companies to have never heard of jurisdictional red before, as frankly, I hadn't either before I started as the CEO of the Race to Berlin. So it is. The concept's been around for a while, but the scaling of it and the delivery of state governments in terms of their their reduction in deforestation rates. That's quite new. And so working with, for example, the state of Tocantins for the last four years, now the supply is there. Governments in Brazil are stepping up. What we now need to do is to get global capital and companies to actually meet, meet that supply with their demand.
Natália Renteria: [00:27:42] I would love to add that Jay Redd programs are the improvement of public policy implementation to tackle deforestation and land degradation. That is a point we need to remember because it's a partnership between public and private sector, and it is a new way to rule things. And until today, deforestation was controlled by one part of this the this the whole system. And with Jarrad we can put both together private and public sector and it is a revolution. That's why we that's how we can we we must see this opportunity. And adding about the integrate point. There are three points we need to remember about Jarrad credits regarding the integrity. So three elements regarding that. So there are no land issues. The program is aligned with MTC goals and DC is the national commitment. Each country uh presented to to UNF triple C and it's really something different regarding the red programs. And then we have high standards. So it's a kind of new credit with this integrity in a whole new level.
Paul Dickinson: [00:29:08] And presumably public and transparent. There'll be documentation about this available.
Keith Tuffley: [00:29:12] Hi. I mean, I'm reasonably new to this area. Paul, as I said in the last 12 months, I've been incredibly surprised and in a really positive way about the degree of rigour, the methodology, the systems, the transparency, the consultations. The system as a whole is working very well. But we know we have to instill confidence in investors because there's been all the controversies about Red. Again, you don't throw the baby out with the bathwater. You don't throw it out because there's been problems. You keep improving it. That's on the red.
Paul Dickinson: [00:29:41] I've got to stop you there for a question just to help our listeners out. What kind of controversies have there been?
Keith Tuffley: [00:29:45] Well, there's been a lot of controversies about the integrity and the verification process. Is the amount of carbon that's been reported. Actually the the fact and there have been some issues there's no doubt about. There's been some issues. So a lot of companies we've gone to, the initial response is, oh hang on. We don't invest in red. All those controversies. We don't like it. And we have to sit them down and say, okay, we understand that, but we have to keep improving that system.
Carolina Gueiros: [00:30:09] Um, so in a lot of the criticism we had of Redd+ projects in the past five years or so, it was a lot about the communities and the owners and occupiers of the land not receiving meaningful benefits in comparison to the high income that we then learned developers were receiving. So that was a big part of the problem. The way that Jrad fixes that or addresses that is by making everything very transparent and again, by engaging all of these stakeholders in these consultations and in the governance mechanism for the Jrad program. So it's a way of having that social control over how the funds are going to be spent and over how the program is designed. Basically, it's more inclusive, I would say, and more transparent. But we have new methodologies for Redd plus projects, and hopefully those mistakes of the past will no longer exist in this new generation of Redd+ projects.
Paul Dickinson: [00:31:12] Sunlight is the best disinfectant.
Keith Tuffley: [00:31:14] But once again jurisdictional red. And not trying to say anything bad about Redd because we have to keep improving that. But jurisdiction already is a very different additive, complementary system at a systems wide, state level, state led and landscape level, getting all the systems within that to work together. One other quick point is the TF, which no doubt you're with all these acronyms a lot.
Paul Dickinson: [00:31:37] Yeah, that's the.
Natália Renteria: [00:31:38] Tropical Forest Forever facility.
Paul Dickinson: [00:31:40] Which has also been announced at the Cop. Very exciting.
Keith Tuffley: [00:31:42] Yep. And been building up towards cop. It's a very complementary system and we're big supporters of TF. An important element is that it changes the understanding about our responsibility in the world to encourage and pay for countries to stop deforestation and reduce DeForest to protect what we've got. Why shouldn't they be rewarded for that? Well, they should be rewarded for that. And that's a really important. Now the aspect, the other important thing to note is that it's a different system in terms of where the capital is coming from. So investors into TFF are getting a bond return a financial bond return. Okay. And it's from basically different investors and for different purposes. Complementary but different purposes. Jurisdictional red is not competing. It's totally complementary. We've got to get both working plus other solutions as well. But both of them are scaling up at this moment here in Belgium is really important to accelerate both of them. And they're both important factors to success.
Natália Renteria: [00:32:40] We have to see both of them as a puzzle. And the timing is different. So now we will act regarding stop deforestation and then TFF will work on this standing forest. So they are completely complementary.
Keith Tuffley: [00:32:57] And one common issue between them is that, by the way, protecting forests is not about doing nothing. It's a common misunderstanding. You think, oh, don't touch the forest, you know. Just don't. Don't destroy it. There's a lot of active management of forests, and that's from indigenous communities. It's from local communities. There's a lot you have to do to protect. It's not just about doing nothing. It's about doing a lot to protect and to look after them.
Paul Dickinson: [00:33:20] But let me ask you also, um, you know, from Mercury Mercury's perspective, what made the this program inevitable? And tell us a little bit about the company.
Celso Fiori: [00:33:30] Okay. So, uh, let's assume that we have in Brazil, for instance, a very robust forest code. So it's a pack of regulations of laws that basically rules the use of land. So we have the national laws, we have the state laws. So we have the control bodies. We have the audit bodies. This is all designed to protect forests, to prevent from degradation, from deforestation, to support communities. But what is the point of having it all if the states and if the country do not have the resources, the money to put that in place. So this is jurisdictional red. Jurisdictional red is basically to make to enable the states and the jurisdiction or the country to be able to do their job. The best way to support the communities to prevent fires, uh, education, health, sanitation, uh, the way it should do, but do not have the resources to do so. This is what I would call pure and genuine additionality because of all the money that is coming through the credits is going to enable and to change something that would not happen if there was no carbon credits resources. So this is pure additionality.
Paul Dickinson: [00:34:41] So it's investable. That's the point.
Celso Fiori: [00:34:43] That's totally investable. And additionality is basically something that will happen that is additional to the business as usual scenario. So something that would not happen if the, for instance, the carbon money is not flowing in. So the carbon money is changing something. It's transforming something. It's additional to something.
Paul Dickinson: [00:35:01] And should I be asking a question about the what's the word I'm looking for the integrity of the buyer. Does that is that an issue? How does that work? Because I mean, should, you know, is there such a thing as the wrong buyer.
Celso Fiori: [00:35:13] The wrong buyer or the right buyer? I don't think so. I think all the stakeholders, all the parties in the globe has a role to play. So obviously they have to look into all the ways they can and they can afford to reduce emissions. But to support something like this that is broad, that is inclusive and that is impactful. I think this is really something that can create what we call a virtuous cycle. So jurisdictional read is all about a virtuous cycle, because once you get money for the state to do what it has to do, or the country to do what it has to do, then you generate a result that will end up getting less emissions, and then more credits and then more resources. And then you create this virtuous cycle. And this is totally we understand the methodologies developed to be immune to political cycles, for instance, because it's not about one specific political public policy of a government aid. It's just about the public policy to aim and to reach some specific objectives. So regardless of who is in the in the office, it will be creating its own policy, but to reach the same result. So that's why permanence is longer term and is additional again.
Paul Dickinson: [00:36:20] Um, two years from now, what's the what is what's success look like for you? And maybe I'll get, uh, Keith, you go first.
Keith Tuffley: [00:36:28] I'm happy to go first. This ultimately is about getting global capital to shift. The solution is there, and the states are stepping up right there. They're providing the reduction in deforestation levels and improvements in forest degradation levels. It's now up to global capital and companies to step up. This can be a market that's in the order of 3 billion per annum of capital flowing in to solving this crisis. So to me, I see this as a very much a medium to it's been hard work at the start. I think we've acted as the catalyst to help accelerate it. But to me, in the next two years, I can see billions of dollars flowing per annum into this. And that will be a similar moment here in Belgium as an accelerant for that to occur. So that's how I see success in the next two or so years.
Natália Renteria: [00:37:14] For me, success will be having more states working with that. Today we have some of them, but we need more. And definitely we need those things in a different way. We can't achieve new results by doing the same things. So Jared, for me, is that okay?
Celso Fiori: [00:37:32] Well my dream, it might be a bit weird, but my dream is in a few years, maybe 5 or 10 years, ten is more realistic that Jared do not exist anymore. And I tell you why. Because red is made to finish when it has achieved the results, which is to stop degradation, illegal deforestation. So if the projects is no longer existing, that means it was successful.
Carolina Gueiros: [00:37:55] Yeah, I was going to say something very similar, but I would add to that, that also that the the finance that came, you know, through the sale of these credits actually go to the communities to do things that are helping them transition to a low carbon economy and low carbon activities that no longer require or depend on deforestation and forest degradation, which will end up in the demise of the program. But that's how it's designed.
Paul Dickinson: [00:38:25] So Fi, what did that trigger in you?
Fiona McRaith: [00:38:26] Wow. I mean.
Paul Dickinson: [00:38:28] There's a lot there.
Fiona McRaith: [00:38:29] There's so much there. And I think some initial strands that I'll pull out are protecting forests, especially the most biodiverse tropical rainforests and particularly primary forests, which are so, so crucial, has not been uncomplicated. It's been mired in controversy, in evolving methodologies and shifting requirements. This represents, I think, a huge step forward, particularly in the way in which they talk about local communities being a part of this and governments being a part of this, but it's certainly not simple. And this all hinges upon the carbon market, which is a way for companies to offset emissions that they're not able to eliminate. So it's important, and it's going to be a growing market and it's currently unregulated. And that is creating a lot of challenges. And it often means that if we don't do it well and innovatively, and if we're not able to ensure the quality of credits, and I'm trying not to dive into too much of the nuance because there are all these different terms like double counting, additionality, permanence, stuff that is really, really important when you get into the nuts and bolts of this type of stuff, but it's simpler to just plant trees and claim the carbon credit.
Fiona McRaith: [00:39:59] Because trees absorb carbon, they're the best, most natural tool for doing that. However, restoration or reforestation as a as an exclusive form of doing this doesn't protect biodiversity and biodiversity in itself. And tropical forests are some of the most biodiverse regions on the planet need to be protected. But we can't do that for free. So this is essentially, as I understand it, and Paul, really keen for what you took from those interviews. This is essentially a way to bring money to support and income to the communities that do that, safeguarding to the governments that instead of monetizing the natural resources by cutting them down or processing them, they actually are paid for leaving them up because it's a global good goal and it's great for the local communities. But I think sometimes that old way of thinking is like, oh, it's just, you know, good for the planet. So we'll do it. And I think this is a it seems to me like a step in the, in the right direction, again, built on a lot of a lot of challenges in the past, which puts it really lightly. Again, I don't know what you think, Paul.
Paul Dickinson: [00:41:06] You can't improve, you know, unless you do something. So all kind of improvement is based upon kind of starting and failing and carrying on and improving. And that's how we kind of did everything really in history. I mean, one of the big things about just like planting trees, like, let's go and plant a lot of trees, it looks good, right? Because the tree weighs so many tons. And you can say, well, that's equivalent to so many tons of CO2, but there's a problem. You don't really know what's happening with the microorganisms in the soil. And, and what's been the carbon change there. You don't really know if those trees are necessarily going to survive in that environment with the climate change and all the rest of it. The incredible thing about a big freestanding forest is it's got a super complex ecosystem. It's very robust. It does absorb CO2, but it also how can I put it? It's sort of unique and it's perfect. So that's why you want to protect it now. Carbon markets. I noticed that some people would get triggered by carbon markets sounding like carbon trading. They are really very different things. Carbon trading is when there's a cap and trade scheme, like the EU Emissions Trading Scheme, which is all about power stations and it's totally different and people trade the price of emissions.
Paul Dickinson: [00:42:05] This is not what we're talking about. We're talking about carbon markets where corporations here will buy evidence that they have funded, supporting a major ecosystem. And I think that the absolute thing key here is it's a kind of voluntary tax. Right. And I think it's powerful how in the race it's mediated through government. And I think there's a real problem in the voluntary market where buyers locate sellers. And, you know, there are these weird individual relationships like me with my tax. Like I pay a little bit of money to some soldiers and I pay a bit of money to a hospital, and I give a bit of money to a school. That's crazy. You know, you need the government to kind of coordinate tax. And so I think when you've got the collectivizing force of government to show this is not a backroom deal between two parties, but rather it's a collective effort to deliver forest preservation. I think that's incredible. It's got real credibility. But of course, that credibility is only as strong in a certain sense as the credentials of that government. Now, the Brazilian government, I think, is a leading democracy in the world. And so I have high confidence in processes here. But it's it's it's not a cure all for everybody.
Fiona McRaith: [00:43:09] So I think that's all we have for listeners today. But again, remember, we're bringing you daily episodes this whole second week of cop and boy. Oh boy, things are getting real on the ground. Not that they haven't been very real, but this is where rubber really hits the road, and I think I want to return to something. You know, we've we've often talked about well, actually, the Cop presidency has often talked about the fact that this is the implementation Cop. We know that many, many cops have been implementation focused as well. But the key to making this be the implementation Cop means that implementation has to be supported in what's negotiated. That means thinking about how is finance going to be provisioned in the negotiations. That's where some of the roadmaps come in. That's where the global goal on adaptation come in. These are things that we'll be tracking throughout the week, and that you'll probably be reading about or seeing about in coverage. So we're just halfway through some of the key elements of the Cop have begun to take shape. They'll really crystallize in the next few days, and then we'll see where things land at the end of the week. So stay tuned.
Paul Dickinson: [00:44:15] It's incredibly exciting time. I'm today was walking through the halls, and there's the Adair Turner from the Energy Transition Commission and follows me upstairs to some big event by solar, which is put on in partnership with Longy, which is one of the biggest solar manufacturers in the world. I mean, you know, the solutions a year, massive industrial capability to solve these problems. It's an exciting time. And let's hope next week's going to be even better. See you tomorrow. Bye bye.
Paul Dickinson: [00:17:27] Let's hear from them. An absolutely great team. Okay, so I think just when you start off with your names and. Okay.
Celso Fiori: [00:17:39] Thanks, Paul. My name is Celso Fiori . I'm the head of environmental products at Sylvania in Brazil.
Natália Renteria: [00:17:45] Natalia Renteria, country director for Brazil.
Carolina Gueiros: [00:17:48] I'm Carolina Gueiros. I am the project management officer on the side of Sylvania for the JREDD program in the state of Tocantins.
Keith Tuffley: [00:17:57] Keith Tuffley, CEO of Race to Belem.
Paul Dickinson: [00:17:59] Well, today we got the most amazing interview about going on a journey about the race to Belem, which is about perhaps the most important thing in the world right now, and why we are all here in Berlin about stopping deforestation. Let me start off, I guess, with you, Keith. What's the vision behind this? How did it happen? Frame it for us. How did it come into the world?
Keith Tuffley: [00:18:22] Well, thanks, Paul. Um. And it's great to be on. Yeah. Which what we're trying to do is to help stop and slow down deforestation and degradation. Our focus with this campaign is called Race to Blend, because it's a ten month campaign to try and accelerate private capital to be generated and mobilized into Brazil to slow down and ultimately stop deforestation and degradation. We all know the forest crisis that's happening. What we've got to do is get the vast amount of private capital to address the problem. I should clarify, there's private sector capital. So we're not looking for for public capital, for government capital, nor are we looking for philanthropic capital. It's the private sector. That's where the vast majority of the world's capital is. So it's trying to mobilize that to address what ultimately is a problem that will affect all of us, which is ongoing deforestation and degradation of tropical forests around the world.
Paul Dickinson: [00:19:13] Now, a horrible thing happened in the 1970s or 80s. I think it was called maximizing shareholder value and maximizing shareholder value, said that you've got to give every single last bean to the shareholders, and not a penny for anybody else. But are you suggesting that there's a way to square that and that corporations can support something without necessarily directly getting a kind of tangible benefit.
Keith Tuffley: [00:19:34] Well, ultimately, this is about maximizing shareholder value because we're all impacted if we continue to DeForest the Amazon and other forest biomes in Brazil, you know, in the next 15 years or so. The scientists are saying we'll reach a tipping point in the Amazon if we continue deforestation rates, which means that the Amazon itself can turn into an irreversible change. The whole water cycle in South America can change if we continue deforestation at these rates. Brazil is the biggest net exporter of food in the world, so we will all be impacted if we continue this deforestation because it changes that entire ecological system in Brazil. So ultimately, we're all consumers of food democracies, and political systems and stability rely on ultimately food and water. That is the single most important things we need on the planet. So what? That's what we're talking about. That's the importance of it. And therefore companies, whether you're an agriculture company or any company, will ultimately be affected if we don't address this crisis. The mechanism we're using is what we call jurisdictional red. So this is looking at the system as a whole in a jurisdiction at the state level.
Paul Dickinson: [00:20:42] Okay. Now jurisdiction I understand that means land a particular region. What is red. And I think you're using two D's and possibly a plus.
Keith Tuffley: [00:20:50] Yep. So reduction in deforestation and degradation of forests at a jurisdictional level.
Paul Dickinson: [00:20:56] Give us a little bit of a history of red.
Carolina Gueiros: [00:20:58] It's a concept that has been around for a long time.
Paul Dickinson: [00:21:01] I mean like roughly roughly.
Carolina Gueiros: [00:21:03] Okay. So, um, it all started back, um, in the discussions about the Kyoto Protocol back in the 90s, uh, where countries were discussing how to include forests in the climate agreement in the UNF, triple C. So there was a lot of controversy about what types of forest activities to include in the Clean Development Mechanism, which was the market based credit carbon credit exchange mechanism in the in the Kyoto Protocol. Right. So there were several technical issues with including red, which is avoided deforestation versus including RR which is reforestation and afforestation. And in the end for because of these technical issues such as leakage being the main one and also geopolitical disagreements between.
Paul Dickinson: [00:21:56] I hardly dare ask you what a leaking tree is.
Carolina Gueiros: [00:21:58] Oh, boy. Okay. So leakage is sometimes when you have some activity to protect a forest in a particular place. The harmful deforestation or degradation activity just migrates.
Paul Dickinson: [00:22:13] Gotcha.
Carolina Gueiros: [00:22:14] It leaks somewhere else. So that was a major part of the criticism about Redd+ projects is that, oh, you're just going to protect the forest here. So whatever activity was being done here can just be done elsewhere. And this is something that is really difficult to prevent and to avoid.
Paul Dickinson: [00:22:32] I've got to tell you a terrible thing that I was once told is that, you know, and you'll be familiar with this. And it's not a very nice thought, but in some senses, if there is money offered to preserve forestry, that could encourage people to consider deforestation, that wasn't necessarily thought to happen to to try and get the money. But I'm presumably you've thought about that at some length.
Carolina Gueiros: [00:22:51] Precisely. So those I'm just giving you leakage as one of the examples. But all of these technical issues with okay, so how are we going to prevent this? How are we going to measure reduction in deforestation and degradation and such and such? Combined with this disagreement between Europe and the US, basically about whether to include Redd+ in the Kyoto Protocol ended up with no agreement and Redd+ projects were not included in the Kyoto Protocol, in the Clean Development Mechanism, and the idea sort of stayed there for a while. But then in the early 2000, it was actually a group of Brazilian scientists.
Paul Dickinson: [00:23:32] Brazilian scientists, good old Brazil, the leader of the world in many more areas than people realize.
Carolina Gueiros: [00:23:36] Yes. Very true. Came up with this idea. Okay, so what about we don't do Redd+ projects, but we still think it's very important to stop deforestation and to have a financial mechanism that will incentivize that. Why don't we do it at the scale of a country, or of a very large jurisdiction, where the government will be in charge of it and will hopefully be able to do a better job to avoid all of these technical pitfalls, such as leakage. And the idea really took off around 2007. It was included. It was officially accepted as a mitigation option under the UNF triple C, but in a very different characterization. We're no longer talking about projects. We're no longer talking about offsetting. We're no longer talking about carbon credits. We're talking about policies to reduce deforestation and forest degradation at the scale of a country or subnational jurisdiction.
Paul Dickinson: [00:24:42] Which is as big as my country.
Carolina Gueiros: [00:24:44] Which in the case of Brazil can be as big as as a country or many countries.
Paul Dickinson: [00:24:48] This is you saying this is government backed, right?
Natália Renteria: [00:24:51] The whole program is led by governments. Okay. But what we have in Brazil is the whole system working together. So we will use the best of one, this, this whole system. So the best of voluntary projects, the best of programs and then the best of regulated markets. And we can use that as a whole system, a whole ecosystem market in Brazil and it's quite unique. You can't find in the world today a country that put in their, um, in their federal law, this kind of system like that, all all working together and all connected.
Keith Tuffley: [00:25:33] Okay. And as Natalia just explained, it's a system solution. It's not just buying a plot of land and saying, hey, let's stop the deforestation on this little plot. It is a systems wide. So, for example, the state of Tocantins is is the size of the United Kingdom a bit bigger? Right? And it's getting that whole state and all the elements in there to work together. The local communities, the indigenous communities, the communities, the agriculture sector, small poor farmers and the large agriculture companies led by the state government to work as a system in consultation with each other. The state is held in the order of 50 consultations around the state this year to get everyone's input, and also to to to hopefully decide together how the capital is then split to ensure that it has maximum impact and everyone feels empowered and included.
Paul Dickinson: [00:26:26] I mean, it does seem like this is almost like a kind of new way of running the world that you've got corporations from across the world funding, I guess, a kind of natural balance sheet or a natural resource. And how has it been going? I mean, have you been? What sort of levels of support have you been seeing?
Keith Tuffley: [00:26:43] Well, it is a journey of education and understanding for some companies. You really got to start right from the start to get them to understand, okay, what this actually means. There are other companies who are really engaged. They understand already what jurisdictional red is, and there's every company in between. What I will say is that there's an enormous amount of momentum now. We're very close to signing contracts with some very major companies who are right on board, and we're also sensing a strong level of interest from other companies to have never heard of jurisdictional red before, as frankly, I hadn't either before I started as the CEO of the Race to Berlin. So it is. The concept's been around for a while, but the scaling of it and the delivery of state governments in terms of their their reduction in deforestation rates. That's quite new. And so working with, for example, the state of Tocantins for the last four years, now the supply is there. Governments in Brazil are stepping up. What we now need to do is to get global capital and companies to actually meet, meet that supply with their demand.
Natália Renteria: [00:27:42] I would love to add that Jay Redd programs are the improvement of public policy implementation to tackle deforestation and land degradation. That is a point we need to remember because it's a partnership between public and private sector, and it is a new way to rule things. And until today, deforestation was controlled by one part of this the this the whole system. And with Jarrad we can put both together private and public sector and it is a revolution. That's why we that's how we can we we must see this opportunity. And adding about the integrate point. There are three points we need to remember about Jarrad credits regarding the integrity. So three elements regarding that. So there are no land issues. The program is aligned with MTC goals and DC is the national commitment. Each country uh presented to to UNF triple C and it's really something different regarding the red programs. And then we have high standards. So it's a kind of new credit with this integrity in a whole new level.
Paul Dickinson: [00:29:08] And presumably public and transparent. There'll be documentation about this available.
Keith Tuffley: [00:29:12] Hi. I mean, I'm reasonably new to this area. Paul, as I said in the last 12 months, I've been incredibly surprised and in a really positive way about the degree of rigour, the methodology, the systems, the transparency, the consultations. The system as a whole is working very well. But we know we have to instill confidence in investors because there's been all the controversies about Red. Again, you don't throw the baby out with the bathwater. You don't throw it out because there's been problems. You keep improving it. That's on the red.
Paul Dickinson: [00:29:41] I've got to stop you there for a question just to help our listeners out. What kind of controversies have there been?
Keith Tuffley: [00:29:45] Well, there's been a lot of controversies about the integrity and the verification process. Is the amount of carbon that's been reported. Actually the the fact and there have been some issues there's no doubt about. There's been some issues. So a lot of companies we've gone to, the initial response is, oh hang on. We don't invest in red. All those controversies. We don't like it. And we have to sit them down and say, okay, we understand that, but we have to keep improving that system.
Carolina Gueiros: [00:30:09] Um, so in a lot of the criticism we had of Redd+ projects in the past five years or so, it was a lot about the communities and the owners and occupiers of the land not receiving meaningful benefits in comparison to the high income that we then learned developers were receiving. So that was a big part of the problem. The way that Jrad fixes that or addresses that is by making everything very transparent and again, by engaging all of these stakeholders in these consultations and in the governance mechanism for the Jrad program. So it's a way of having that social control over how the funds are going to be spent and over how the program is designed. Basically, it's more inclusive, I would say, and more transparent. But we have new methodologies for Redd plus projects, and hopefully those mistakes of the past will no longer exist in this new generation of Redd+ projects.
Paul Dickinson: [00:31:12] Sunlight is the best disinfectant.
Keith Tuffley: [00:31:14] But once again jurisdictional red. And not trying to say anything bad about Redd because we have to keep improving that. But jurisdiction already is a very different additive, complementary system at a systems wide, state level, state led and landscape level, getting all the systems within that to work together. One other quick point is the TF, which no doubt you're with all these acronyms a lot.
Paul Dickinson: [00:31:37] Yeah, that's the.
Natália Renteria: [00:31:38] Tropical Forest Forever facility.
Paul Dickinson: [00:31:40] Which has also been announced at the Cop. Very exciting.
Keith Tuffley: [00:31:42] Yep. And been building up towards cop. It's a very complementary system and we're big supporters of TF. An important element is that it changes the understanding about our responsibility in the world to encourage and pay for countries to stop deforestation and reduce DeForest to protect what we've got. Why shouldn't they be rewarded for that? Well, they should be rewarded for that. And that's a really important. Now the aspect, the other important thing to note is that it's a different system in terms of where the capital is coming from. So investors into TFF are getting a bond return a financial bond return. Okay. And it's from basically different investors and for different purposes. Complementary but different purposes. Jurisdictional red is not competing. It's totally complementary. We've got to get both working plus other solutions as well. But both of them are scaling up at this moment here in Belgium is really important to accelerate both of them. And they're both important factors to success.
Natália Renteria: [00:32:40] We have to see both of them as a puzzle. And the timing is different. So now we will act regarding stop deforestation and then TFF will work on this standing forest. So they are completely complementary.
Keith Tuffley: [00:32:57] And one common issue between them is that, by the way, protecting forests is not about doing nothing. It's a common misunderstanding. You think, oh, don't touch the forest, you know. Just don't. Don't destroy it. There's a lot of active management of forests, and that's from indigenous communities. It's from local communities. There's a lot you have to do to protect. It's not just about doing nothing. It's about doing a lot to protect and to look after them.
Paul Dickinson: [00:33:20] But let me ask you also, um, you know, from Mercury Mercury's perspective, what made the this program inevitable? And tell us a little bit about the company.
Celso Fiori: [00:33:30] Okay. So, uh, let's assume that we have in Brazil, for instance, a very robust forest code. So it's a pack of regulations of laws that basically rules the use of land. So we have the national laws, we have the state laws. So we have the control bodies. We have the audit bodies. This is all designed to protect forests, to prevent from degradation, from deforestation, to support communities. But what is the point of having it all if the states and if the country do not have the resources, the money to put that in place. So this is jurisdictional red. Jurisdictional red is basically to make to enable the states and the jurisdiction or the country to be able to do their job. The best way to support the communities to prevent fires, uh, education, health, sanitation, uh, the way it should do, but do not have the resources to do so. This is what I would call pure and genuine additionality because of all the money that is coming through the credits is going to enable and to change something that would not happen if there was no carbon credits resources. So this is pure additionality.
Paul Dickinson: [00:34:41] So it's investable. That's the point.
Celso Fiori: [00:34:43] That's totally investable. And additionality is basically something that will happen that is additional to the business as usual scenario. So something that would not happen if the, for instance, the carbon money is not flowing in. So the carbon money is changing something. It's transforming something. It's additional to something.
Paul Dickinson: [00:35:01] And should I be asking a question about the what's the word I'm looking for the integrity of the buyer. Does that is that an issue? How does that work? Because I mean, should, you know, is there such a thing as the wrong buyer.
Celso Fiori: [00:35:13] The wrong buyer or the right buyer? I don't think so. I think all the stakeholders, all the parties in the globe has a role to play. So obviously they have to look into all the ways they can and they can afford to reduce emissions. But to support something like this that is broad, that is inclusive and that is impactful. I think this is really something that can create what we call a virtuous cycle. So jurisdictional read is all about a virtuous cycle, because once you get money for the state to do what it has to do, or the country to do what it has to do, then you generate a result that will end up getting less emissions, and then more credits and then more resources. And then you create this virtuous cycle. And this is totally we understand the methodologies developed to be immune to political cycles, for instance, because it's not about one specific political public policy of a government aid. It's just about the public policy to aim and to reach some specific objectives. So regardless of who is in the in the office, it will be creating its own policy, but to reach the same result. So that's why permanence is longer term and is additional again.
Paul Dickinson: [00:36:20] Um, two years from now, what's the what is what's success look like for you? And maybe I'll get, uh, Keith, you go first.
Keith Tuffley: [00:36:28] I'm happy to go first. This ultimately is about getting global capital to shift. The solution is there, and the states are stepping up right there. They're providing the reduction in deforestation levels and improvements in forest degradation levels. It's now up to global capital and companies to step up. This can be a market that's in the order of 3 billion per annum of capital flowing in to solving this crisis. So to me, I see this as a very much a medium to it's been hard work at the start. I think we've acted as the catalyst to help accelerate it. But to me, in the next two years, I can see billions of dollars flowing per annum into this. And that will be a similar moment here in Belgium as an accelerant for that to occur. So that's how I see success in the next two or so years.
Natália Renteria: [00:37:14] For me, success will be having more states working with that. Today we have some of them, but we need more. And definitely we need those things in a different way. We can't achieve new results by doing the same things. So Jared, for me, is that okay?
Celso Fiori: [00:37:32] Well my dream, it might be a bit weird, but my dream is in a few years, maybe 5 or 10 years, ten is more realistic that Jared do not exist anymore. And I tell you why. Because red is made to finish when it has achieved the results, which is to stop degradation, illegal deforestation. So if the projects is no longer existing, that means it was successful.
Carolina Gueiros: [00:37:55] Yeah, I was going to say something very similar, but I would add to that, that also that the the finance that came, you know, through the sale of these credits actually go to the communities to do things that are helping them transition to a low carbon economy and low carbon activities that no longer require or depend on deforestation and forest degradation, which will end up in the demise of the program. But that's how it's designed.
Paul Dickinson: [00:38:25] So Fi, what did that trigger in you?
Fiona McRaith: [00:38:26] Wow. I mean.
Paul Dickinson: [00:38:28] There's a lot there.
Fiona McRaith: [00:38:29] There's so much there. And I think some initial strands that I'll pull out are protecting forests, especially the most biodiverse tropical rainforests and particularly primary forests, which are so, so crucial, has not been uncomplicated. It's been mired in controversy, in evolving methodologies and shifting requirements. This represents, I think, a huge step forward, particularly in the way in which they talk about local communities being a part of this and governments being a part of this, but it's certainly not simple. And this all hinges upon the carbon market, which is a way for companies to offset emissions that they're not able to eliminate. So it's important, and it's going to be a growing market and it's currently unregulated. And that is creating a lot of challenges. And it often means that if we don't do it well and innovatively, and if we're not able to ensure the quality of credits, and I'm trying not to dive into too much of the nuance because there are all these different terms like double counting, additionality, permanence, stuff that is really, really important when you get into the nuts and bolts of this type of stuff, but it's simpler to just plant trees and claim the carbon credit.
Fiona McRaith: [00:39:59] Because trees absorb carbon, they're the best, most natural tool for doing that. However, restoration or reforestation as a as an exclusive form of doing this doesn't protect biodiversity and biodiversity in itself. And tropical forests are some of the most biodiverse regions on the planet need to be protected. But we can't do that for free. So this is essentially, as I understand it, and Paul, really keen for what you took from those interviews. This is essentially a way to bring money to support and income to the communities that do that, safeguarding to the governments that instead of monetizing the natural resources by cutting them down or processing them, they actually are paid for leaving them up because it's a global good goal and it's great for the local communities. But I think sometimes that old way of thinking is like, oh, it's just, you know, good for the planet. So we'll do it. And I think this is a it seems to me like a step in the, in the right direction, again, built on a lot of a lot of challenges in the past, which puts it really lightly. Again, I don't know what you think, Paul.
Paul Dickinson: [00:41:06] You can't improve, you know, unless you do something. So all kind of improvement is based upon kind of starting and failing and carrying on and improving. And that's how we kind of did everything really in history. I mean, one of the big things about just like planting trees, like, let's go and plant a lot of trees, it looks good, right? Because the tree weighs so many tons. And you can say, well, that's equivalent to so many tons of CO2, but there's a problem. You don't really know what's happening with the microorganisms in the soil. And, and what's been the carbon change there. You don't really know if those trees are necessarily going to survive in that environment with the climate change and all the rest of it. The incredible thing about a big freestanding forest is it's got a super complex ecosystem. It's very robust. It does absorb CO2, but it also how can I put it? It's sort of unique and it's perfect. So that's why you want to protect it now. Carbon markets. I noticed that some people would get triggered by carbon markets sounding like carbon trading. They are really very different things. Carbon trading is when there's a cap and trade scheme, like the EU Emissions Trading Scheme, which is all about power stations and it's totally different and people trade the price of emissions.
Paul Dickinson: [00:42:05] This is not what we're talking about. We're talking about carbon markets where corporations here will buy evidence that they have funded, supporting a major ecosystem. And I think that the absolute thing key here is it's a kind of voluntary tax. Right. And I think it's powerful how in the race it's mediated through government. And I think there's a real problem in the voluntary market where buyers locate sellers. And, you know, there are these weird individual relationships like me with my tax. Like I pay a little bit of money to some soldiers and I pay a bit of money to a hospital, and I give a bit of money to a school. That's crazy. You know, you need the government to kind of coordinate tax. And so I think when you've got the collectivizing force of government to show this is not a backroom deal between two parties, but rather it's a collective effort to deliver forest preservation. I think that's incredible. It's got real credibility. But of course, that credibility is only as strong in a certain sense as the credentials of that government. Now, the Brazilian government, I think, is a leading democracy in the world. And so I have high confidence in processes here. But it's it's it's not a cure all for everybody.
Fiona McRaith: [00:43:09] So I think that's all we have for listeners today. But again, remember, we're bringing you daily episodes this whole second week of cop and boy. Oh boy, things are getting real on the ground. Not that they haven't been very real, but this is where rubber really hits the road, and I think I want to return to something. You know, we've we've often talked about well, actually, the Cop presidency has often talked about the fact that this is the implementation Cop. We know that many, many cops have been implementation focused as well. But the key to making this be the implementation Cop means that implementation has to be supported in what's negotiated. That means thinking about how is finance going to be provisioned in the negotiations. That's where some of the roadmaps come in. That's where the global goal on adaptation come in. These are things that we'll be tracking throughout the week, and that you'll probably be reading about or seeing about in coverage. So we're just halfway through some of the key elements of the Cop have begun to take shape. They'll really crystallize in the next few days, and then we'll see where things land at the end of the week. So stay tuned.
Paul Dickinson: [00:44:15] It's incredibly exciting time. I'm today was walking through the halls, and there's the Adair Turner from the Energy Transition Commission and follows me upstairs to some big event by solar, which is put on in partnership with Longy, which is one of the biggest solar manufacturers in the world. I mean, you know, the solutions a year, massive industrial capability to solve these problems. It's an exciting time. And let's hope next week's going to be even better. See you tomorrow. Bye bye.
