Marina Grossi, president of the Brazilian Business Council for Sustainable Development (CEBDS), advocated on Wednesday (22), during the Latin American and Caribbean Climate Week in Montevideo, for the gradual implementation of carbon pricing mechanisms in the country. Among the demands of the Brazilian business sector, Grossi highlighted the need for ambitions compatible with the sector's contribution to total emissions, equivalent to less than 2%, measures to protect industrial competitiveness, and a governance structure with stable and transparent rules.
"A gradual approach would facilitate the learning process for public and private sector actors involved in implementing a carbon market. It would also support the development of the various institutions needed to operate the market, as well as facilitate adjustments to contractual and financial rules to support trading and help test price control instruments," reinforced Marina, who also serves on the Steering Committee. Carbon Pricing Leadership Coalition (CPLC), of the World Bank.
During the panel discussion with senior leaders, Marina detailed the carbon pricing proposal submitted to the Minister of Finance to support and stimulate the creation of a carbon market in the country. The proposal is based on consultations with industry representatives, as well as lessons learned from international experiences and simulated experiments in Brazil.
One of the main concerns of the Brazilian industrial sector is maintaining competitiveness. Among the modeling suggestions presented in the study developed by CEBDS is a price ceiling of US$$10/tCO2 for the first phase, combined with free allocation for those sectors with greater exposure to international trade. The proposal also provides for the permission of offsets from the forestry sector, with exemption from capital gains taxes on commercial emissions transactions.
"This regulatory market, with transparent and stable governance, not only fosters competitiveness in the international market but also ensures compliance with the goals established in the Paris Agreement, which aims to limit global warming to 2°C," argues Marina.
At the event's opening, Environment Minister Edson Duarte reported that Brazilian policies have resulted in a reduction of 2.6 million tons of greenhouse gas emissions over the past two years. Duarte also announced that the next edition of Latin America and the Caribbean Climate Week will be held in Brazil.
