BM&FBOVESPA and Santander announce partnership to develop the Brazilian carbon market

Agreement to study creation of financial carbon credits related products

05/17/2012

More

• Carbon Market
• Click here

BM&FBOVESPA and Santander Brasil have signed a partnership agreement to stimulate the carbon credit market in Brazil. This aims at studying the creation of products such as derivatives and actuals with carbon credits as underlying. The agreement will lead the two institutions to assess jointly the development of products aimed at the Brazilian and international markets and to develop joint studies, assess economic viability and suggest the necessary regulatory measures for the launch of these products. The initiative also foresees the creation of a Market Maker Program for the products that result from the partnership.
“This is an important phase in the development of the local carbon market, getting Brazil on track to what has been done internationally,” said Santander Treasury Officer Roberto Campos. “We’re taking another step towards creating an environment that, in the medium term, will promote standardization, transparency and liquidity for the market participants,” said BM&FBOVESPA Product and Customer Officer Marcelo Maziero.

Brazil carbon market to experience 'huge' growth

 

© Xicoputini

Brazil's new carbon market could experience 'huge' growth in the next eight years, as the government seeks to curb emissions from deforestation and industry.

That is the bullish prediction of some of Brazil's leading economists, who are also looking to the UK for advice in developing a successful emissions trading scheme, according to KleanIndustries.

Speaking to reporters at Sao Paulo's FGV school of economics, Mario Monzoni, founder and director of sustainability studies, predicted a cap-and-trade scheme would be the most important mechanism to cut emissions from deforestation.

Deforestation currently accounts for around 80 percent of Brazil's greenhouse gas emissions, driven by the growth of agri-businesses including cattle farming, soya bean and sugar cane.

Brazil's first government-backed carbon trading scheme, Bolsa Verde do Rio de Janeiro (BVRio), was launched in December last year. Last week it opened pre-registrations for a new forestry credit market, which can be used by farmers to comply with the country's Forestry Code.

The code requires landowners to retain certain levels of vegetation on their land, but those with more forest than the legal minimum would be able to sell it as a carbon credit to those falling short of the minimum requirement.

His bullish forecasts were echoed by Gustavo Loyola, former president of Brazil's central bank. In a separate interview in Sao Paulo he told reporters that financial mechanisms such as cap-and-trade would be crucial to cutting emissions in Brazil.

"The way to conciliate these is two ideas - growth with conservation of the environment - is to use mechanisms to reduce carbon emissions. So I think Brazil is one of the few countries in the world that could benefit from this kind of mechanism," Loyola said.

No Brazilian carbon market soon /// Point Carbon

Brazil will not establish a domestic carbon market in the short term, an official said today.
Published: 27 May 2010


The creation of a cap-and-trade scheme in Brazil will require strong institutions and transparency, which will take time to develop, Thiago Mendes, a technical advisor at the country’s inter-ministerial commission on climate change, told the Carbon Expo conference in Cologne.

“To develop new institutions, registries and the internal bureaucracy is very complex and has to be verifiable at the international level,” he said.

“I would like to state that it is not for the short term,” he added, without specifying any particular timetable for a domestic emissions trading scheme.

On 6 May, Brazil’s O Estado de Sao Paulo newspaper reported details of a report commissioned by the finance ministry into how a carbon market could be used to target greenhouse gas emissions from the country’s power, transport, agribusiness and industrial sectors.

Mendes said that, in the short term, the UN’s clean development mechanism (CDM) will continue to be an asset for the country and could play a role in any future nationally appropriate mitigation actions (Namas).

Namas is a term coined at 2007’s Bali UN climate change conference and is written into last December’s Copenhagen accord.

It refers to voluntary actions that developing countries could take to reduce emissions under a future international climate change agreement.

Late last year, Brazilian President Luiz Inacio Lula da Silva signed a law that adopting the country’s international commitment to voluntarily cut domestic GHG emissions by between 36.1 and 38.9 per cent by 2020.
This reduction commitment was also part of Brazil’s submission at the start of the year to the Copenhagen accord, which also outlines potential areas for Nama activity in the country.
By Robin Lancaster – rla@pointcarbon.com
Cologne