For centuries, since Portuguese explorers began cutting down deep-red Brazilwood trees shortly after their arrival in 1500, grass has been growing in areas once sylvan areas. Here, in what is now being called the Itaqui Reserve, the forest was cleared in the 1970s when local government offered landowners tax breaks to raise Asian water buffalo. Now the land belongs to the Sociedade de Pesquisa em Vida Selvagem e Educacao Ambiental, or SPVS, a Brazilian non-governmental organization that received the U.S. investment through its partner, The Nature Conservancy, based in Virginia. SPVS had tried to organize restoration projects before but, unable to afford the huge tracts of land required, aborted the projects. In funding the land purchase and restoration program, GM and American Electric Power have an eye toward supplementing reductions in carbon-dioxide emissions they are making in their core businesses.
Trees remove carbon dioxide from the air through a process known as carbon sequestration.
Proposals to combat global warming have included a variety of provisions to help countries meet emissions targets. Such projects potentially could be worth big money. Firms could opt to plant trees overseas instead of installing expensive pollution control equipment at home. In Brazil, where real estate prices are lower than in the United States, GM found a good site for the reforestation option. The two companies are taking a gamble because, with the carbon market idea still at an early stage, there is no guarantee that they will get any return on their investment.