In 2021, we are experiencing the direct impact of climate change, with record temperature records, increase in natural disasters and damage to biodiversity around the world.
These signs spark an urgent alert and direct discussions and public policies around combating ongoing changes, especially in such an important and decisive year, with the 26th United Nations Conference on Climate Change, COP26, which takes place in November.
In this context, ICC Brasil, the national chapter of the largest business organization in the world, in partnership with WayCarbon, the largest strategic consultancy exclusively focused on sustainability and climate change in Latin America, developed an unprecedented study on opportunities for Brazil in carbon markets. With the support of Suzano, Microsoft, Shell, Natura, Bayer and bp, the institutions found that the potential for generating revenue from carbon credits by 2030 for Brazil would be around US$493 million and US$100 billion. This would equate to 1 gigaton (1bn tonnes of CO2 equivalent) over the next decade for the agro, forestry and energy sectors.
Today, there is an accumulated record of more than 14,500 carbon credit projects around the globe, which corresponded to the generation of almost 4 gigatons of tCO2 credits by 2020.
Carbon credits are an economic instrument aimed at reducing greenhouse gases, which lead to aggravation of climate change. These credits are part of a flexibility mechanism, which helps countries or companies that have greenhouse gas emission reduction targets to achieve them in a more cost-effective way. For each ton reduced or not emitted of these gases, a carbon credit is generated. Thus, when a country or company manages to reduce emissions, depending on the methodologies involved, it receives a credit.
The study points out that in the next decade Brazil has the potential to supply from 5% to 37.5% of the global demand of the voluntary market and from 2% to 22% of the global demand of the regulated market within the scope of the UN. And even more considering public policies in the mechanisms of article 6, generating revenues of 100 billion dollars.
Given the opportunity to operate in global carbon markets and the emphasis on the agricultural, forestry and energy sectors, it’s understood that there is a path to be followed by the Brazilian government and the private sector in order to unlock and leverage such opportunities to generate income, health and social welfare. The study has more than 10 essential recommendations, but there are two key steps. The first is to understand carbon markets as the potential to unlock financial opportunities for economic recovery plans and accelerate the sustainable growth of the Brazilian economy and the second is to develop robust monitoring, reporting, verification and emission reduction systems that cover all productive sectors of the Brazilian NDC (Nationally Determined Contribution).
ICC Make Climate Action Everyone’s Business Forum
Organized by the International Chamber of Commerce (ICC), the forum will take place from November 1st to 13th as part of the ICC activities during COP26 and will bring together a diverse network of more than 10,000 participants from the public and private sectors to debate the agenda climate change and discuss actions for the next decade.
ICC Brasil is hoting a panel during the forum entitled “Brazil and Carbon Markets: Exploring Economic Opportunities”, with the participation of Felipe Bittencourt, CEO at WayCarbon , Malu Nachreiner, CEO at Bayer Brazil and Country Division Head- Brazil at Bayer Crop Science, and Tania Cosentino, General Manager at Microsoft Brazil on November 3rd. Watch the full discussion here.
The virtual event will also debate critical issues related to climate, energy and the environment. Topics for discussion include building sustainable supply chains, scaling climate finance, harnessing sustainable innovation and developing effective carbon pricing mechanisms.
Check out the full forum schedule and subscribe here.
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