Brazil, with its vast territorial extension and rich biodiversity, has been a protagonist in global discussions about sustainability and climate change. Amid the global warming scenario, the country stands out not only for the challenges it faces but also for the opportunities it has to lead the transition to a greener and more sustainable economy.
The Brazilian Scenario and the Carbon Market
Brazil is the seventh-largest greenhouse gas (GHG) emitter in the world, emitting about 2.2 gigatons of CO2 equivalent annually. Most of these emissions come from deforestation, mainly in the Amazon region, and agriculture. Brazil’s entry into the carbon market is seen as a promising strategy to combat these emissions. A study by the International Chamber of Commerce (ICC Brazil) in partnership with WayCarbon consultancy revealed that Brazil could offer between 1.5 billion and 2 billion tons of carbon credits by 2030. This could represent up to 48.7% of the credits in this market, considering a price of $100 per ton of carbon credit.
Biogas and Biomass: The Energetic Future
Brazil has significant potential to become a world leader in biogas and biomass production. Producing biogas as fuel can eliminate several environmental problems related to waste, as all organic materials are combined and can be used as biomass for additional production. The global biogas market is expected to grow to $75 billion by 2026, with a CAGR of about 4.74% during the forecast period. Brazil, with its vast agriculture and livestock industry, is well-positioned to take advantage of this trend.
Regulation and Impact on the Forest Code
The regulation of the carbon market in Brazil, known as the Brazilian Emission Reduction Market (MBRE), has the potential to directly impact the Forest Code. This code, although sophisticated and internationally recognized, faces resistance from part of the rural sector, especially those with a higher deficit of native vegetation. The regulation of the carbon market can pressure this segment to regularize their lands, as determined by the code. Furthermore, the connection between the carbon market and the Forest Code is crucial, as most of the unprotected forests are on private properties. Validating the Rural Environmental Registry (CAR) can generate significant resources for producers who comply with the law, encouraging forest preservation.
Initiatives and Recent Investments
The regulation of the carbon market in Brazil, formally known as the Brazilian Emission Reduction Market (MBRE), has the potential to impact various sectors of the economy, especially those related to land use and its preservation. The effectiveness of laws like the Forest Code can be enhanced with the approval of this market, mainly due to the financial benefits that rural producers can obtain by joining it.
The Forest Code, recognized for its sophistication and considered an example of a normative for land use management, faces significant challenges, especially from rural sectors with a higher deficit of native vegetation. The regulation of the carbon market can encourage land regularization and the validation of the Rural Environmental Registry (CAR), a general registry of all rural properties in the country.
Recently, Senator Leila Barros presented a report on the creation of the carbon market in Brazil. The report addresses Bill No. 412, of 2022, which is being processed together with other proposals presented in 2021. This legislation seeks to establish emission limits and sanctions for companies that exceed the established levels, promoting a low-carbon economy in the country. The expectation is that by COP-30 in 2025, Brazil will have an effective carbon trading system.
Conclusion and Perspectives
Brazil has a unique opportunity to lead the transition to a greener economy, leveraging its vast natural resources and technological capabilities. However, it is crucial to address existing challenges, such as deforestation and the complexity of land regulation, to ensure a sustainable future for the country and the world. With appropriate investments and policies, Brazil can not only reduce its emissions but also become a global leader in sustainable solutions.
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