THE CARBON MARKET IN THE BRAZILIAN CONTEXT
By Sândrya Neves (CFC-GS/UFPA) Within the framework of international cooperation on environmental and climate issues, reducing greenhouse gas (GHG) emissions has become one of the primary objectives of global agreements. Since the adoption of the Kyoto Protocol, discussions have focused on mechanisms capable of encouraging, including through economic incentives, the reduction of these emissions. In this context, carbon credits emerged as a market-based instrument. Each carbon credit represents one metric ton of carbon dioxide (CO₂) that has either been prevented from being emitted or removed from the atmosphere. These credits are certified and can be traded with organizations that have not yet fully reduced their carbon footprint. This process, known as carbon offsetting, allows one actor to finance emission reductions achieved by another through the purchase of carbon credits. Currently, the carbon market operates through two main models: the voluntary carbon market and the regulated carbon market. In the voluntary market, companies, institutions, and individuals purchase carbon credits on their own initiative, generally to fulfill environmental commitments, strengthen sustainability strategies, or offset their greenhouse gas emissions. In contrast, the regulated carbon market is established by law and sets mandatory emission limits for specific economic sectors. Companies that exceed these limits must purchase carbon credits or emission allowances, while those that emit less than their allocated limit may trade their surplus allowances. In Brazil, Law No. 15,042/2024 provided greater legal certainty by establishing the Brazilian Greenhouse Gas Emissions Trading System (SBCE), creating the regulatory framework for the country’s compliance carbon market and strengthening Brazil’s participation in the global climate agenda. Brazil’s potential in this market is particularly significant. The Amazon rainforest plays a fundamental role in carbon storage, making it strategically important for conservation projects, forest restoration initiatives, and the generation of carbon credits. In addition, the country has substantial potential for expanding renewable energy production, particularly through solar and wind power, contributing to an energy matrix that is less dependent on fossil fuels and, consequently, characterized by significantly lower greenhouse gas emissions than those of many other countries. In this context, Brazil possesses unique conditions to become a leading actor in the global carbon market. The combination of vast forest resources, a strong capacity to generate carbon credits, and a recently established regulatory framework creates important opportunities to attract investment, promote sustainable development, and strengthen the country’s position as a key player in the transition toward a low-carbon economy.
