Environmental issues from sugarcane plantations in Brazil and how to handle them with market-based instruments

University essay from Lunds universitet/Miljövetenskaplig utbildning

Abstract: This study is a literature review of three market-based instruments used for land management; environmental offsets, payments for ecosystem services (PES) and certification, and how they could be used to mitigate environmental impacts from sugarcane cultivation in Brazil when purchasing biopolymers. The study showed that certification is the most common market-based instrument in Brazil. Offset and PES are yet not common tools but are important for the future. The effectiveness of the certifications depends on the certification standard. Many available standards lead to confusion and inefficiency. Certifications biggest strength is that it lies close to the company and it is therefore easy to incorporate it in the company’s strategies and to communicate with the customers. The biggest strength with environmental offset is that it allowed exploitation of sensitive areas if its compensated and no net loss is achieved. The biggest challenges with this tool are to reduce the uncertainties and achieve a no net loss in value. PES efficiency depends on the design of the scheme. If the provider of the ecosystem service benefits from managing the ecosystem service, it usually becomes more successful. The biggest drawback with PES is that it is often carried out in areas where the price for land is lower and under less threat. The monitoring of the PES is often insufficient and long-running projects are missing which makes it hard to evaluate the effectiveness of PES. When it comes to impact on nature, it is crucial what land management has occurred on the spot earlier. If sugarcane expands on native vegetation it will have an irreversible effect on carbon stock and soil quality, biodiversity, and ecosystem services. If sugarcane expands on degraded pasture or annual crops it will slightly increase the soil quality, carbon stock and lead to less greenhouse gas emission.

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