CEBDS develops regulatory framework for the carbon market in Brazil

The Brazilian Business Council for Sustainable Development (CEBDS) held a webinar this Monday on the Regulatory Framework for the Carbon Market in Brazil, with the aim of starting a compulsory Brazilian carbon market. In order to align concepts and themes on a national emissions trading system and collect relevant information from various stakeholders to support the preparation of the Framework proposal, representatives from the business sector, government, academia, multilateral organizations, press and civil society were invited. 

Also launched was Carbon Market Hub of CEBDS, a space dedicated to content, which will bring news on the subject regularly. The webinar was attended by more than 400 people on the CEBDS YouTube channel. The entire event, which has a partnership with Instituto Clima e Sociedade and sponsored by Bayer and Schneider Electric, will remain available here.

Participating in the event were Marina Grossi, President of CEBDS; Rodrigo Santos, President of the Crop Science Division for Latin America at Bayer; Marcos Alvarenga Matias, President of Schneider Electric; Joaquim Levy, former Minister of Finance and Observer of the CEBDS Council of Leaders; Guido Penido, Technical Coordinator of the PMR Brazil Project, of the World Bank; Gustavo Pinheiro, Coordinator of the Low Carbon Economy Portfolio, Instituto Clima e Sociedade. The mediation was carried out by the technical manager of CEBDS, Karen Tanaka, and the technical presentation was by Ronaldo Seroa da Motta, Professor of Economics at the State University of Rio de Janeiro (UERJ).

CEBDS believes that the country is prepared to adopt carbon pricing with climate integrity, protection of competitiveness and transparent and participatory governance. 

“Our proposal is multisectoral, it is more comprehensive, it is a first path for us to start playing. There is already maturity on the part of companies and we are here building bridges, thinking about benefits for the economy as a whole. A more inclusive, more efficient proposal that highlights the social aspect. This process will be a continuous work. The country is already prepared to adopt carbon pricing with climate integrity, protection of competitiveness and transparent and participatory governance. Brazil could be the biggest provider of carbon credits in the world, and one of the biggest recipients of investments in so-called nature-based solutions”, explained Marina.

Rodrigo Santos, from Bayer, emphasized the importance of CEBDS representing all sectors of the economy and said that, therefore, the creation of a carbon market could be a great opportunity for the country. “We are going to generate revenue, jobs and have sustainable development. We can achieve audacious goals, always with insertion in the international market.”

Marcos Matias highlighted that there is no more optimistic or pessimistic view regarding the creation of the carbon market: “the objective is to be an activist and we are going to use technological resources to bring about this pricing. India is a great reference. And Brazil has a lot of power.”

The observer of the CEBDS Council of Leaders, former Minister Joaquim Levy, highlighted the importance of Brazil following the market, seeking efficient solutions that allow reducing emissions. “We must find a way that is favorable to Brazil and the international market so we don't run the risk of our solution not being recognized.”

Guido Penido, from the World Bank, explained that a carbon market proposal is being built and the idea is to preserve competitiveness and encourage comparative advantages in the consolidation of the public consultation proposal. 

Gustavo Pinheiro, from ICS, CEBDS' partner in preparing the proposal, said that no more time can be wasted on this issue. “The economies that take a long time will suffer consequences linked to the generation of income and employment in the country.”

Ronaldo Seroa, who provided all the technical advice for the event, said that the environment can no longer be viewed as just a sectorial issue. “The carbon market expands the business opportunity. Companies are increasingly committed to the carbon market. modest targets in the first years, distribution criteria protecting competitiveness, and price control mechanisms would be necessary. 

CEBDS and the carbon market

CEBDS is historically recognized for its articulation and advocacy work on climate and carbon and has been working since 2016 with its companies showing the importance of pricing, both internally within companies and at the national level. These last years of studies, consultations and articulation have consolidated the paths of carbon pricing in Brazil. The business sector plays a fundamental role as an important actor in this change, as it can mobilize human and investment resources, drive technological innovation and finance the transition to a new low-carbon economy. The Board has gone ahead and implemented internal carbon pricing models to drive cleaner investments. There are currently more than 1,600 companies that already use or plan to use pricing by 2021 worldwide.   

CEBDS Proposal

 CEBDS defends the creation of a mandatory domestic carbon market in a proposal drawn up over several events and consultations with its members. In 2017, the organization presented a proposal for a carbon market at the Ministry of Economy, at the request of the Ministry itself. The proposal was contemplated by the PMR (Partnership for Market Readiness) project, a partnership between the Brazilian Government (Ministry of Economy) and the World Bank, and was presented together with the Ministry of Economy at the Technical Committee of the Low Carbon Industry (CTIBC). A Open Letter on Carbon Pricing, signed by leaders of 30 large companies and institutions, proposed by CEBDS, in partnership with Iniciativa Empresarial pelo Clima (IEC) and Carbon Pricing Leadership Coalition (CPLC), an initiative of the World Bank. In this document, they affirm their commitment to establishing an internal carbon price and moving towards closer collaboration with the public sector, other companies and their value chain. The choice of emissions trading systems, the identification of sectors to be priced and the context of the first phase have been decided. Now there is a need to detail the regulatory framework for this market, in which the technical parameters of this trading system to be created for the industry will be defined, that is, “the last mile”.

There are currently 64 local, national and regional government initiatives underway or in the process of being implemented. Carbon pricing was responsible for US$45 billion generated in 2019. More than half of this amount went to environment or development related projects. Countries in the European Union, Africa, Latin America and Oceania have increased their ambition to reduce greenhouse gas emissions. Brazil cannot be left behind.

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