On Thursday afternoon, Brazil’s federal government celebrated the issuance of a decree regulating the country’s carbon market, 13 years after it was first included in the national climate change policy. A look under the hood of the decree, however, left experts disappointed, saying it is an empty piece of legislation with little to no practical effect — and which could actually increase the lack of legal security surrounding carbon credits in Brazil.
“It is a highly generic rule which fails to properly establish a regulated carbon market because it doesn’t specify the mechanisms of operation and price-setting,” noted Política por Inteiro, a Brazilian environmental policy watchdog.
Indeed, beyond the fanfare, there is not much substance to the government’s decree. For instance, it discusses the creation of a national system for greenhouse gas cuts (to be called Sinare), but this system will only be effectively set up in future decrees from the Economy and Environment ministries.
“Moreover, the decree brings a series of ambiguities that will create legal confusion and represent risks for environmental integrity,” says Natalie Unterstell, a climate policy and finance expert.
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