On Thursday (July 19), Marina Grossi, president of the Brazilian Business Council for Sustainable Development (CEBDS), presented a proposal for a carbon pricing mechanism for Brazilian industry to Finance Minister Eduardo Guardia. Marina was in Brasília accompanied by CEOs André Araújo of Shell; André Clark of Siemens; and Rogério Zampronha of Vestas, who endorsed the industrial sector's willingness to accelerate the regulatory process for this market. The sector expects to improve financial risk management processes related to climate change and identify risks and opportunities for generating revenue.
To arrive at the proposal for the creation of a carbon market, CEBDS commissioned a study that showed that it is possible to transparently incorporate the impacts caused by carbon emissions into the atmosphere into the costs of emitting companies, in order to finance the transition to a low-carbon economy. The importance of creating this regulatory framework is to enable Brazil to meet the goals established in the Paris Agreement, which aims to limit global warming to 2°C; and also to assume a leading role in the global carbon market, given its technical advantages for operating in this market. The study was developed by Ronaldo Seroa da Motta, a professor at the State University of Rio de Janeiro (UERJ), who holds a PhD in Economics from University College London, with support from Carbon Pricing Leadership Coalition (CPLC), who coordinates the World Bank's discussions on the topic. Marina Grossi, president of CEBDS, is one of the nine world leaders who make up this committee at the World Bank.
– We advocate the creation of a market in Brazil instead of taxation, as we want to avoid increasing our tax burden and the risk of directing tax revenues to other investments that are not related to the transition to a low-carbon economy. We believe that we can implement this market gradually, within a period of five years, as has been successfully done in some European countries – says Marina Grossi.
Currently, 51 national and subnational jurisdictions have adopted carbon pricing. Of these, 25 have market-based approaches and 26 have fiscal approaches. In total, the two pricing approaches cover 20% of global emissions, with an annual value of US$ 82 billion.
Finance Minister Eduardo Guardia said at the end of the meeting that he understands the sector's concerns and will look into the matter closely. Guardia said he considered the discussion to be very positive and confirmed that he intends to meet with the sector again to discuss the issue in the coming months.
See what executives said during the meeting
“Brazilian industry needs to gain market share in the international market and pricing represents a gain in competitiveness, in addition to generating new products and services. This is the most opportune moment to discuss the implementation of pricing mechanisms with long-term impact on our business.” (André Clark, CEO of Siemens)
“We urgently need to address the issue of carbon pricing, because Brazil cannot remain on the sidelines of what is already a reality in other countries. The interministerial work being conducted by the Ministry of Finance is important because we need leadership to advance the issue on the national agenda. Discussions take time and we do not have that time. We need to do our part to comply with the Paris Agreement.” (André Araújo, President of Shell Brazil).
“The Brazilian business sector is committed to reducing and mitigating greenhouse gas emissions. This is an agenda that has an impact on the competitiveness of companies and in which Brazil has had a prominent position since the Kyoto Protocol goals were defined. Establishing carbon pricing mechanisms is another step towards sustainable development.” (Rogério Zampronha, President of Vestas in Brazil)
“The private sector wants the implementation of a carbon market mechanism to occur more quickly.” (Ana Carolina Szklo, Director of Institutional Development at CEBDS).
Press information:
Renata Mello – Integrated Communication Approach (CEBDS)
(21) 3461-4616 r. 195 / 99606-0737
