On December 12, Law No. 15,042/2024 came into force in Brazil, establishing the Brazilian Greenhouse Gas Emissions Trading System (SBCE), a regulated carbon market in the largest country of South America. Like other emissions trading systems, the law will establish limits on greenhouse gas (GHG) emissions in Brazil for regulated sectors, as well as other market rules, which will be developed over a several year process of regulatory design and implementation. Currently, the agricultural sector is not included as a covered sector.
Importantly, the law includes provisions for the integration of jurisdiction REDD+ programs – like those developed by Governors’ Climate and Forests Task Force (GCFTF) States in the Legal Amazon. These provisions provide options to regulate state REDD+ programs with a non-market approach and jurisdictional programs with a market approach, as well as the development of carbon credit projects for the voluntary and regulated markets. The law also includes specific recognition of the right of Indigenous Peoples with respect to credit generation and benefits sharing.
The current law establishes essential definitions for improving state strategies for accessing climate finance, including the mechanisms to be adopted to eliminate the possibility of double counting. In the SBCE’s governance structure, it provides for the participation of states within the Technical Advisory Committee and reinforces the role of the National REDD+ Commission (CONAREDD+) for REDD+ programs and projects. CONAREDD+ must give its opinion on the accreditation of REDD+ methodologies and the implementation of safeguards, keep records of state non-market and market programs, receive information on carbon projects and exclude private areas from the calculation of results when required to do so. The approved legal framework may serve as a signal for attracting financial resources to strengthen capacities to tackle illegal deforestation and promote a forest-based economy that values keeping the forest standing.
As with all new legal frameworks, the next steps to implement this important law are critically important and GCFTF states in Brazil will remain actively engaged in this process to ensure that the detailed regulations recognize and advance state-level REDD+ programs and other leading climate initiatives from subnational leaders.
See here for a useful summary from the International Carbon Action Partnership (ICAP), which often partners with the GCF Task Force. Stay tuned for more!