Modern colonialism in carbon markets? Insights from emergy accounting

Climate change demands mitigation actions, and the international carbon credit market has emerged as a key strategy, as recognized by the Kyoto Protocol and, more recently, the Paris Agreement. However, carbon credit exchanges between developed and developing countries have increasingly reflected a pattern of Modern Colonialism, as market prices typically based on willingness-to-pay fail to capture the true value of ecosystem services provided by credit-generating countries. To address this imbalance, scientific tools that assess ‘value’ from the donor's perspective are essential, in which Emergy Accounting and its Emergy Exchange Ratio (EER) offers a promising approach. This study applies the EER to assess Brazil's carbon credit transactions from 2004 to 2019. Results show that Brazil exported between 25 and 43 times more emergy than it received in monetary return, indicating a significant ecological-economic imbalance. A biophysical value per ton of CO₂-eq. under the emergy perspective would be up to 40 times higher than market prices, resulting in an estimated cumulative loss of approximately USD 523 million for Brazil over the period analyzed. Although resolving the structural roots of unequal ecological exchange is beyond the scope of this study, our analysis contributes by focusing on one measurable dimension of that inequality. To tackle the disparities identified in Brazil’s carbon credit trade, two main actions are proposed: (i) adjusting the price of carbon credits through diplomatic engagement, active participation in multilateral forums, and the establishment of minimum pricing based on biophysical metrics; and (ii) forming trade partnerships with countries that have higher Emergy per Money Ratios (EMRs), thereby enhancing emergy-based purchasing power. This study highlights the EER as a valuable tool for renegotiating equitable trade terms, guiding the valuation of ecosystem services, and promoting environmental justice. Future work should explore its integration into regulatory frameworks, including Brazil’s upcoming Emissions Trading System, to foster more equitable carbon market dynamics.