Country could jump to 48% from 12% share in voluntary market
Brazil currently accounts for 12% of carbon credits issuance in the global voluntary market, with 45.28 million tonnes in credits offered, but has the potential to play a much larger role in the mitigation of emissions.
A study carried out by the International Chamber of Commerce (ICC Brazil) in partnership with WayCarbon consultancy indicated that in a scenario of accelerated emissions reduction in the next decade, Brazil could offer 1.5 billion to 2 billion tonnes in carbon credits in 2030, which could mean 22.3% to 48.7% of the credits in this market.
The calculations considered a price of $100 per tonne for the carbon credit, an amount that is considered by the Taskforce on Scaling Voluntary Carbon Markets (TSVCM) as necessary for a fast reduction in emissions.
Brazil’s current share in the global carbon market is already growing fast. In 2019, Brazil had a 3% share. A study indicated that the country would only exceed the 10% share in this market in 2030, but the country surpassed this threshold in 2021.
According to the new study, the performance reflects the higher number of credits issued by nature-based solutions (NBS) and the influence of the regulation of Article 6 of the Paris Agreement at the last UN Climate Change Conference of the Parties (COP) in Glasgow, Scotland.
The trajectory for the coming years, however, still depends on solving some hurdles. In the view of ICC and WayCarbon, after interviews with several agents in this field, it is necessary to overcome market, technical, political, regulatory, and economic barriers. In these aspects, are mentioned the lack of credibility of government commitments, high complexity of land regulation, difficulty in estimating the organic carbon of the soils, and also difficulty in obtaining sources of funding.
“Our goal is to deliver a compass that shows the way to the economic agents transparently so that they can develop, structure, and strengthen this market,” said Laura Albuquerque, WayCarbon’s general manager of consultancy and the leader of the research, in a note. According to her, it is still “necessary to strengthen the flows of the stages of carbon credit generation.”
*By Camila Souza Ramos — São Paulo
Source: Valor International