By Juan Carlos Pereira (UFPA/CFC-GS)
Starting in the late 1970s, reports from foreign environmentalists drew attention to the environmental and social impacts caused by large projects in the Amazon. This international repercussion led financing organizations, such as the World Bank (IBRD) and the Inter-American Development Bank (IDB), to require that the projects they financed undergo environmental impact studies. As the country did not yet have consolidated environmental legislation, these studies had to follow international regulatory standards. Thus, external demands acted as a catalyst for environmental issues to become more structurally integrated into the national political agenda.
The relationship between the economy and nature in Brazil underwent a significant transformation with the creation of the National Environmental Policy (PNMA) during the military regime in the 1970s. This milestone represented the beginning of a new way of thinking about development, in which the economy should respect ecological limits and adapt to natural systems, rather than the other way around. Through this policy, legal and economic instruments were instituted to control and guide productive practices, allowing the state to play an active role in promoting a model of sustainable growth.
This regulatory perspective has inspired other policies, such as those on climate change, which also rely on economic and control instruments. The guidelines developed by the Climate Observatory (2009) for the formulation of national public policies emphasize the use of market mechanisms, such as Reducing Emissions from Deforestation and Degradation (REDD) projects, incentives for renewable energy sources, the creation of carbon sinks, and actions to reduce net greenhouse gas emissions. These measures follow the guidelines established by the United Nations Framework Convention on Climate Change and its subsequent regulations.
Continuing this process, the creation of the National Policy on Climate Change (PNMC), established by Law No. 12,187/2009, represented the starting point for a structured climate policy in Brazil. This policy articulated strategies for mitigation and adaptation to climate effects, combining economic instruments, enforcement mechanisms, and control measures (Santos, 2021). The PNMC also set national targets for reducing greenhouse gas emissions and encouraged the creation of a carbon market, in addition to promoting sectoral plans aimed at sustainable transition in different areas of the economy; actions based on the logic of economic instruments.
In view of this, the economic instruments present in the National Policy on Climate Change were mapped and the following table was structured.
Table 1 – PNMC and its Economic Instruments
| Economic Instruments | Operationalization |
| Economic Resources and Funds | Such as the National Fund on Climate Change, which aims to raise and invest funds in mitigation and adaptation actions. |
| Fiscal and tax measures | Use of taxes and other levies to encourage the reduction of greenhouse gas emissions. |
| Credit lines and financing | Provision of credit by public and private financial agents to finance projects that contribute to policy objectives. |
| Union budget appropriations | Allocation of specific resources in the federal budget for climate-related actions. |
| National and international financial and economic mechanisms | Creation and use of financial tools within the country and others established in agreements such as the United Nations Framework Convention on Climate Change and the Kyoto Protocol, to promote mitigation and adaptation to climate change. |
| Development of the Brazilian Greenhouse Gas Emissions Trading System | System that represents the regulatory framework for the carbon market in Brazil. |
