Jörg Eigendorf, Chief Sustainability Officer at Deutsche Bank recently posted on LinkedIn about monetising the protection of the rainforests 1. Coincidently, almost to the day, Biobanknote wrote to us about a project to reforest the Amazon.
Pedro Miguel da Costa e Silva, the Brazilian ambassador to the European Union, had given a talk to Deutsche Bank about the need for positive incentives to protect the rainforests that play a key role in the world’s climate absorbing CO2, but also for the biodiversity of our planet.
Rainforest nations are struggling with the reality that a dead tree is valued more than a living one. According to BloombergNEF, protecting one hectare of rainforest results in an opportunity cost of $500; the Tropical Forest Forever Facility, initiated by the Brazilian government for the climate summit COP30, offers support of just $4 per hectare.
The Amazon rainforest is not only in Brazil of course, and it has already experienced significant deforestation. Reinstating what has been lost will cost significantly more than safeguarding what is there now.
What Biobanknote is proposing is to use banknote waste to prepare around 200,000 capsules impregnated with around 5 million native tree seeds, about 25 seeds per capsule, and to scatter these over 100 hectares of deforested rainforest land from a helicopter or a drone in a selected area of the Amazon rainforest.
Accessibility is a major challenge in these areas, hence the use of this approach.
The biodegradable capsules would be prepared with cotton banknote waste which protects and improves germination, acting as a small slow-release nutrient mulch that also maintains moisture.
Biobanknote already successfully uses this technique to support traditional tree planting schemes. The cost of each making and planting each capsule would be under $1.4. This figure includes the organization, promotion, logistics and execution of the project, giving a total estimated project cost in the region of $280,000, a cost of $2,800 per hectare.
The project would take one year from start to the aerial planting since it would require identifying appropriate native species for the selected areas, obtaining permits from National Parks and environmental authorities, forming a management committee with the peasant community, the financial sector, non-governmental organisations and environmental authorities, and working with an alliance of high mountain nurseries and local communities for seed collection and treatment.
A paper by Trillion Trees, ‘Defining the Real Cost of Restoring Forests’, makes clear that the goal is tree growing rather than just tree planting and the calculation needs to take into account the real costs of working collaboratively and effectively with local communities, of choosing the right trees for the right places, and of maintaining restoration sites to ensure long-term success where trees survive for decades to provide the benefits claimed.
Biobanknote’s plans take these into account, with follow up visits planned after six months and then a year later to check the effectiveness of the planting.
As noted, the project cost is estimated to be US$280,000. Using an estimate by a Trillion Trees 2 3 that the global average carbon sequestration rate for recovering natural forests is 10.37kg CO2 per tree per year, this is a cost of US$5.50 per tonne CO2e.
This project proposes to plant the native species Juglans Neotropica 4, which Biobanknote estimates will capture approximately 51,000 tonnes of CO2 each year, effectively off-setting a significant proportion of impact of banknote production and circulation.
In addition, a paper looking at the carbon stock of Julans Neotropica found that each fully grown tree captures 13.17 Mg ha-1 5. An Mg is 1,000kg, so one hectare captures 13,170kg of carbon (13.17te) and 100 hectares 1,317te of CO2.
A 2017 report by the High-Level Commission on Carbon Prices concluded that the carbon price level consistent with achieving the Paris temperature target, which the world is now on track to surpass, is at least $50-100 per tCO2 by 2030 with a supportive policy environment in place 6 7. Biobanknote estimates that if realistic survival rates and a 20/30-year time horizon are considered, the effective cost per tonne of CO₂ would be consistent with this carbon price estimate of the High- Level Commission.
This is a practical and tangible project directly relevant to central banks, banknote producers and cash cycle stakeholders addressing the major challenge of reforesting the Amazon rain forests.
Rather than pay carbon offsetting to a distant third party, perhaps engaging with Biobanknote on this banknote related project makes sense.
More information is available from Rafael Eduardo Cruz Diaz at recruzd@bic and at www.biobankote.com.
1 - linkedin.com/feed/update/urn:li:activity:7381553955228770304
2 - Trillion-Trees_Defining-the-real-cost-of-restoring-forests.pdf
3 - A Trillion Trees is a partnership between Birdlife International, Wildlife Conservation Society and WWF founded in 2016 to test and innovate models for forest conservation.
4 - Juglans neotropica – Wikipedia
6 United Nations Environment Programme. (2021). Emissions Gap Report 2021: The Heat Is On – A World of Climate Promises Not Yet Delivered – Executive Summary. Nairobi.
7 - High-Level Commission on Carbon Prices. 2017. Report of the High-Level Commission on Carbon Prices. Washington, DC: World Bank. License: Creative Commons Attribution CC BY 3.0 IGO.
