Brazil's Carbon Market Dilemma: Emissions Cap and Conservation Funding Challenges

Brazil has introduced basic rules for its carbon markets, but largest polluters like farmers remain uncapped. This leaves environmentalists questioning its effectiveness in reducing the country's significant emissions. Despite this, increased funding for forest protection could mitigate negative impacts, with companies engaging in carbon credit projects.

Brazil is setting foundational rules for its carbon markets; however, there's skepticism on whether these measures will significantly cut emissions. The absence of an emissions cap for agriculture, responsible for 74% of the country's emissions, particularly raises concerns among environmentalists.

Farmers, a major part of Brazil's carbon output, have been excluded from the cap-and-trade system, covering only about 16% of emissions. This exception was demanded by agribusiness leaders citing technical difficulties in measuring agricultural emissions, leaving many critics and researchers unconvinced.

Despite these challenges, the initiative aims to boost legal security and encourage carbon projects that protect forests from agricultural pressures. Expanding carbon credit schemes are expected to support forest conservation, providing a financial boost against deforestation while aligned with national climate obligations.

(With inputs from agencies.)