The carbon market is emerging as a key piece in Brazil's development strategy, taking advantage of its vast environmental heritage and extensive territory. With significant potential to explore global opportunities, the country is well positioned to advance its climate and socioeconomic goals.
Brazil's vast forest cover offers valuable opportunities in areas such as reducing deforestation, reforestation and regenerative agroforestry systems. These initiatives not only capture greenhouse gases, but also improve biodiversity and create lasting jobs.
Studies indicate that Brazil can play an important role in offering certified emissions reductions, meeting up to 20% of the global demand for carbon credits. The International Chamber of Commerce (ICC Brazil) estimates that, by 2030, the country could attract investments of up to 120 billion dollars, generating around 3.4 million new jobs by 2040.
Carbon markets can be categorized into three segments: domestic regulated, international regulated and voluntary.
The domestic market depends on a regulatory framework, with the expectation of approval of bills such as PL nº 2,148, which proposes the creation of the Brazilian Emissions Trading System (SBCE). The demand for credits in this market could vary between 90 and 220 MtCO2eq in 2030, according to McKinsey estimates. This market promotes the adoption of climate policies aligned with international practices, benefiting the export of Brazilian products and allowing for a more cost-effective reduction of emissions.
Established by the Paris Agreement, this market is still in the regulatory phase. Although COP 27 made progress, full market operation is anticipated in the near future. IETA reports that several countries are already negotiating emissions reductions, with the potential to generate up to 27 billion dollars by 2030. Brazil can benefit significantly by exporting carbon credits derived from forest restoration, which can generate 880 thousand jobs annually.
In MVC, companies buy carbon credits to offset their residual emissions. Brazil has great opportunities in this market, especially in land use projects such as REDD+. The Brazilian Initiative for MVC estimates that Brazil could represent 15% of global demand, generating around 26 billion dollars per year. The global carbon market, currently valued at $2.1 billion, could grow to more than $50 billion by 2030, according to PWC.
To capitalize on these opportunities, Brazil needs to consolidate a strategy that aligns public policies with long-term objectives for each market segment. It is essential to establish clear rules for projects with export potential and use the future Brazilian Emissions Trading System to open markets without the imposition of fees by purchasing countries.
Furthermore, it is essential to recognize MVC initiatives and harmonize financing strategies to mobilize private capital, especially in high-risk areas such as the Legal Amazon.
The carbon market can be a powerful tool for financing Brazil's sustainable development, generating revenue and creating jobs. With a strategic vision and innovative actions, Brazil has the potential to become a global leader in the transition to a low-carbon economy, promoting a more sustainable and inclusive future.
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