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’Green’ bonds finance industrial tree plantations in Brazil

16 / 05 / 2019, Mongabaycom News

Investments known as green bonds that are intended to slow climate change can finance the operation of tree plantations in ways that have few, if any, environmental benefits, according to a case study of Fibria, a Brazilian company that turns harvested trees into the wood pulp that ultimately becomes paper. “The example of bonds by Fibria to finance business-as-usual industrial plantations raises the question of whether these self-labelled bonds and weak standards can credibly guarantee that money invested in these bonds will have a positive impact on the [environment] and the climate,” Merel van der Mark, who coordinates the Environmental Paper Network’s (EPN) pulp finance project, said in a statement. The EPN is a group of some 140 NGOs with the goal of making the pulp and paper industry more sustainable. On May 14, EPN released a briefing that it says demonstrates that the more than $700 million in green or climate bonds issued by Fibria went to maintaining and expanding plantations of eucalyptus trees. The “green” benefits touted by the company from such investments were often exaggerated or misleading, and they sidestep the environmental challenges of growing and maintaining monoculture plantations, the report argues. Eucalyptus plantations, in addition to providing little shelter for biodiversity, require a lot of water and can quickly lower water tables. Image by Rhett A. Butler/Mongabay. EPN disputes the climate benefits that Fibria calculated would result from the planting of trees on its plantations. The company suggested that, on one farm, trees would take up…

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