Event highlights the importance of regulated and voluntary markets for the Brazilian economy and for achieving environmental goals
Last Friday, the 17th, the Chamber of Deputies held a public hearing to discuss the regulation of the Brazilian emissions reduction market (Bill 528/21, authored by Representative Marcelo Ramos), which proposes the creation of a national carbon credit market. The Business Council for Sustainable Development (CEBDS), which has been discussing the issue since 2017, recently released a regulatory framework for the carbon market in Brazil, which served as the basis for a substitute bill. At the event, hosted by the Environment and Sustainable Development Committee, CEBDS was represented by Natalia Renteria, Technical Manager of Climate and Sustainable Finance.
"I'm here to defend the importance of regulating the so-called carbon markets. Brazil is ready to have a qualified debate on the topic, dispelling misconceptions, and aiming to embrace emissions trading that will allow us not only to enter international markets but also to facilitate the movement of financial resources that is already occurring, and from which we are currently marginalized," summarizes Natália.
She explained that the substitute proposal, presented by Representative Zé Vitor, creates a balanced market ecosystem. One is voluntary and the other regulated. Natália clarified that the voluntary market involves offset, forestry, and agribusiness credits, with the goal of registering, accrediting standards, and accounting for transactions. It would, in essence, be a way to organize these credits within a transparent platform capable of revealing and measuring transactions in this market. According to her, after the first registration phase, these credits will be ready to supply other markets, such as Corsia, the international aviation market, which already exists and accepts offsets.
Regarding the regulated market, Natália explains that the proposal is for two approaches: one is a reporting system and the other is a Cap and Trade system, in which an emissions limit is set for companies in specific sectors, which can then issue credits within that limit. In parallel, the reporting system will monitor what's happening within this regulated environment.
"To definitively dispel some erroneous assumptions surrounding this regulated market, I want to clarify that, following international experience, this system focuses on emissions from industry and energy. The focus is on large carbon emitting sources. Given the complexity of reporting and monitoring, the agricultural and forestry sectors are not included, but they will be sources of credits for the regulated market," he explains.
Renteria further states that this bill is just one of the national policies that will guide the country toward an economy with reduced emissions, highlighting the importance of the carbon market being part of a larger set of policies to implement our NDC.
"The text conceptually highlights the distinct natures of the regulated and voluntary markets, and goes further: it guarantees tax exemptions so that emissions trading can be safe, fair, and with low transaction costs. Pricing carbon and moving forward with these markets' agendas is not an option for Brazil; it's a necessity. We are experiencing a moment of disruption in industrial and commercial practices. Global change is already underway, and Brazil cannot be left out. The bill's registration system brings this cohesive carbon market environment, which will enhance our environmental reputation, international competitiveness, and attract investment to our economy," he concludes.
The public hearing also included the participation of eight representatives from different sectors, who also discussed the creation of the carbon market. Representative Carla Zambelli, chair of the committee and rapporteur of the bill, announced that she will soon convene new hearings to hear from social stakeholders.
