Brazilian Coffee in the Carbon Market: A Prospective Analysis of Financial Viability and Effectiveness

Abstract

This article prospectively analyzes the financial viability of integrating coffee cultivation into Brazil’s regulated carbon market. The analysis, based on the potential reduction of greenhouse gas (GHG) emissions and the profitability of carbon credit trading, employed microeconomic analysis to estimate the minimum viable scale of the plantation. Using the projected minimum area, the study inferred the potential participation of Brazilian coffee cultivation from census data. The results indicated low effectiveness of the cap-and-trade policy for the sector, as fewer than 12% of coffee farms reach the minimum viable area to trade credits. The study concludes that mechanisms to reduce certification costs are necessary to enhance policy effectiveness, promote environmental conservation, and foster social inclusion.