Brazil's President Lula on December 12 officially signed the carbon credit market bill previously proposed by Senator Leila Barros. This decision not only marks a solid step forward in Brazil's fight against climate change, but also reinvigorates the development of the global carbon market. The Brazilian National Climate Change Policy (PNMC) had proposed a regulated carbon market in 2009, which had not been formally legislated until today.
The bill creates the Brazilian Greenhouse Gas Emissions Trading System (SBCE) to provide a regulatory framework for carbon credits generated by environmental protection and climate change programs. The system will allow companies, institutions or individuals to offset emissions from their economic activities by purchasing credits from projects that reduce greenhouse gas emissions or capture carbon from the atmosphere. For Brazil, the trading system could help meet its GHG reduction targets under the Paris Agreement.
The passage of the bill is not only a major adjustment to Brazil's domestic policy, but also a strong endorsement of international action to reduce emissions. First, it ensures that rural landowners will be able to participate in the coffers of the national Reduced Emissions from Deforestation and Forest Degradation program (REDD+). Second, the bill also addresses the mechanism for emission reductions in the fossil fuel sector, known as Brazilian Emission Allowances (CBEs), which will play an important role in driving emission reductions in the sector.
The concept of carbon credit market has its roots in the global consensus on the urgency of climate change. The development of a carbon credit market in Brazil, one of the countries with the largest forest cover in the world, is of great significance to global climate action. For companies going abroad to Brazil, they can study the carbon market trading norms in depth, find out their real carbon emission level, and take the initiative to manage and trade carbon emissions.
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