Brazil enacts law regulating the carbon market

President Luiz Inácio Lula da Silva enacted the law that regulates the carbon market in Brazil, establishing rules for greenhouse gas emissions. The law was published on December 12 and its promulgation was announced during the Sustainable Social Economic Development Council in Brasilia.

The new law regulates the purchase of environmental preservation credits to offset polluting gas emissions. In other words, conservation and ecosystem recovery measures generate credits, while emissions generate debits that must be offset. The law establishes the Brazilian Greenhouse Gas Emissions Trading System (SBCE) and divides the Brazilian carbon market into two sectors: regulated and voluntary.

Under this law, companies, organizations and individuals will be able to offset their emissions through the purchase of credits linked to preservation initiatives. The objective of this market is to transfer the social cost of polluting emissions to the emitters, as part of the global effort to curb global warming and climate change.