“We’ve missed the opportunity to bring agribusiness to a regulated sphere, which not only limits emissions, but also promotes sustainability.” This was stated by Gabriela Savian, deputy director of the public policy division of the Amazon Institute for Environmental Research (IPAM), quoted in recent days by the Japan Times newspaper. These explicit words tell very much of the disappointment amongst campaigners after the approval of emission credit legislation in Brazil that paves the way for the kick-off of a national carbon market. The system is supposed to incentivize climate mitigation initiatives but at the same time, according to activists, is likely to turn out, in fact, as a window-dressing or just a little more.
The rule
The new law introduced in November, the Brazilian government explained, rewards companies or state governments that release fewer greenhouse gases by awarding them carbon credits that can later be sold to those who generate emissions above the set limit. This is the general principle of the carbon market: the “virtuous” ones generate reduction certificates, and those who emit too much come into compliance by buying enough to offset the excess CO2 equivalent produced. That’s all, happily ever after. Or maybe not.
No limits on agribusiness emissions
The reform, as mentioned above, in fact leaves out the agricultural sector on which no limits have been imposed on the release of greenhouse gases. A choice that inevitably end up diminishing, in no small part, the size and impact of the credit market. In 2023, research by the Observatório do Clima, an association that brings together several environmental NGOs, estimated that food production, which is strongly linked to deforestation in Brazil, alone contributes almost 74 percent of the country’s total emissions.With the exclusion of the agribusiness, in other words, the carbon market system would end up covering a minority share of national emissions.
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The system will be operational in 2030
The government, however, defended the measure stressing that the system in any case guarantees the possibility for agribusiness to generate carbon credits through the maintenance of protected areas. This, anyway, could have a marginal impact considering the previously mentioned numbers. The Brazilian carbon market, said the government, will still take a few years to be fully implemented reaching full operation only in 2030. Penalties for companies that fail to comply can be as much as 3 percent of the previous year’s gross revenues (up to 4 percent in the case of repeat offenses). For individuals, fines may reach 20 million reais, about 3.3 million euros.
