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📉 The initiative is part of the green agenda of President Lula da Silva and is critical for the country to reach its climate targets of 50% emission reduction below 2005 by 2025 figures and reach climate neutrality by 2050.
Here are some things you should know:
🌳 According to McKinsey, #Brazil holds 15% of the global potential for nature-based carbon sequestration (#NBS), highlighting the country's pivotal role in the green economy. Thus, the development of a regulated carbon market in Brazil is of both national and global interest.
💵 While it is projected that Brazil could see revenues of up to $120 billion by 2030 from regulated and voluntary carbon markets, there are significant concerns over the exemption of the agricultural and livestock sectors from the proposed system.
📑 The market's design includes provisions reporting requirements on companies emitting over 10,000 tonnes of CO2 equivalent annually and compliance obligations for those with emissions >25,000 tonnes.
🐄 The Brazilian government faces the delicate balance of fostering environmentalism while driving economic growth. The exclusion of agriculture and livestock sectors which contribute up to 70% of the country’s greenhouse gases (GHGs) raises significant concerns about the effectiveness of the market.
🌐 The draft law also contains provisions for international transfers under Article 6 of the Paris Agreement. This underscores the importance of solidifying robust standards under Article 6 to ensure the integrity and success of carbon markets worldwide.
🌎 The bill currently awaits secondary approval, and its successful implementation could set a precedent for other nations, particularly in the Global South.
👀 What Brazil does will have a huge impact on our chances to fight climate change. I have been very impressed by the current administration’s commitment to environmental protection. While this proposal is not perfect, it is leading the way in South America and promises to provide an excellent platform for Brazil’s decarbonization.
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