Regulated Carbon Market is the first step for Brazil to stand out at COP-27

Concern about climate change has never been as high as it is now, as we are suffering the consequences of this problem. The broad debate on this issue encouraged several countries to look for measures to stop this advance and, in Brazil, it was no different.

Published in the Official Gazette of the Union (DOU) last month, Decree No. 11.075/2022 aims to regulate the paragraph of art. 11, of Law No. 12.187 on National Policy on Climate Change. In the text, the Federal Government presents the guidelines for implementing sectoral plans to mitigate climate change and establishes the National System for Reducing Greenhouse Gas Emissions, SINARE.

Contrary to what many people think, this issue is not a big news, since the creation of Plans is already foreseen in the law. With this decree, the government regulated the sole paragraph of this article and “invited” sectors to participate in a gas reduction target.

These goals must be stipulated jointly by the Ministries of the Environment and Economy, and each sector will have its own specific one. This is an important step for the country, which during COP-26, took important measures to reduce emissions.

The regulation of this decree could make Brazil stand out at the next COP. This is because our country needs to come up with concrete measures to achieve the goals it has assumed and, to achieve this, we started with this decree.

It is also important to emphasize that the text presented is a first step towards reducing gases. There are still many actions to be taken so that Brazil can consolidate itself as an efficient, transparent market that has a methodology and flow of carbon credits.

One of the important points in this decree is the creation of the National System for Reducing Greenhouse Gas Emissions, SINARE. This system will record emissions, removals, reductions, compensations, all acts of trade, transfer and credit retirement transactions. All this information will be concentrated in one place and this will guarantee the necessary transparency for the legal security of all these transactions.

It is also important to highlight Agribusiness in this context. Brazil is a key player in feeding the planet, after all, it has a clean energy source and the sector can be very positive in terms of environmental gains for the carbon market, and should only create effective mechanisms to avoid double counting of carbon credits . Those used for Brazil to reach the stipulated target, before the countries of the Conference of the Parties, cannot be traded on the voluntary market to offset the carbon emissions of private companies, for example.

The regulation of this decree shows an important step for Brazil to take a serious global stance regarding climate change.

China, the United States and Europe, for example, set goals, talked about energy transition and demanded a lot from Brazil, but some of these countries' actions are contrary to what was assumed.

The United States, for example, authorized rural producers to plant in conservation areas, for fear of food shortages, due to the lack of grain supply from Ukraine. Additionally, the country increased oil production.

Brazil is consistent with what it assumed. It is important to create a collision of norms and mechanisms so that actions are effective in the face of the serious problem of climate change.