Brazil, green business and carbon market
The Kyoto protocol is an international treaty aiming to reduce the effects of greenhouse gases emissions (carbon dioxide, methane, nitrogen protoxide, etc.). It was firmed on the 11th on December 1997 in Kyoto, Japan, and came into force on the 16th of February 2005. 168 countries ratified the treaty in 2010. Brazil signed it in 1998 and ratified it in 2002.
With the Kyoto protocol has been established the carbon market, which means the possibility to buy carbon credits. It has been used at an international scale for countries that emit more greenhouse gases than others, but also at a national scale: some companies contaminating more than others have to buy compensatory emission rights coming from other projects, more efficient on the ecological field. The overtaking of the emissions quotas means that the company will have to pay a fine. In the European Union, the average fine is 40 euros for each tonne of GHG emitted.
To be clear, the carbon market does not allow any country that buys carbon credit to contaminate more. The idea was to decide on pollution’s price, since pollution is seen as a negative externality. A negative externality means that the action of an actor (a person, a company, a State etc.) has generated a change in the situation of other actors (deliberately or not). In this sense, the actor whose action generated consequences should pay for these consequences. This is how carbon market was thought.
There has been great debate about this carbon market. But what we’re interested in is to understand in which ways Brazil uses its carbon credits. It appears that Brazil did ratify the Kyoto Protocol but did not take part in the carbon market. The country said it was too restrictive. However, it wanted to have an action in the reduction of emissions. During the Copenhagen summit in 2009, Brazil announced “voluntary measures” in order to reduce its emissions significantly by 2020. However, the term “voluntary” means that the government has no obligation in respecting the measures discussed. Furthermore, Brazil did not present any detailed plan for the realisation of the emissions’ reduction or a funding plan. These voluntary measures are at a national scale, which means that companies negotiate between themselves their amount of emissions. Consequently, it is impossible to control the effectiveness of it, at an international scale. This might be why the Brazilian companies (those of sugar production, for instance), don’t seem to care about the reality of GHG emissions during the production of bioethanol. This is what Sergio Paranhos explains, when saying that none of the companies he works with ask about the indirect effects of the production of sugarcane, since they don’t have to respect actual agreements on the reduction of GHG emissions.
Another point to be noted is the mechanism of Reducing Emissions from Deforestation and Degradation (REDD). The aim is to reduce and control the deforestation of the Amazonian forest. What is interesting is that indigenous people received carbon-trading rights as, for instance, the Surui tribe in the Amazonian forest. Why indigenous people? Because they are the first ones concerned by deforestation since they live in the Amazonian forest or in the edge of it. The Chief Almir Narayamoga Surui, leader of the Surui tribe says “It helps in our dialogue with the government, businesses, and other sectors, strengthening the autonomy of indigenous peoples to manage our territories” (interview here). However, foreign companies tried to buy these carbon-trading rights to increase their capacity of emissions. There was a juridical debate since these contracts between indigenous people and international companies have no legal validity. This seems quite paradoxical with the idea of companies not caring about their amount of emissions since in this case, companies illegally buy rights of emissions to indigenous people.