The state of Rio de Janeiro will set up Brazil's first carbon exchange on Tuesday that beginning in 2013 will allow businesses to trade credits to comply with mandatory pollution limits Rio plans to introduce in 2012, the state's environment department said on Monday.
The "Bolsa Verde" or "Green Exchange", a partnership between Rio's environment and finance departments, aims to establish pollution caps before the United Nations-sponsored Rio +20 environment conference takes place in its capital city in June.
Walter Figueiredo de Simoni, deputy head of the project at Rio's environment department said the exchange's focus would be carbon credits but that it would trade credits for industrial effluents and mandatory forest coverage in rural areas as well.
"The trading probably won't start until 2013 ... Our thinking is that carbon markets will expand in Brazil and hopefully eventually we will have a national cap and trade system," de Simoni said.
Rio estimates it emitted about 72 million tonnes of carbon dioxide equivalent (CO2e) in 2008, with one third of that coming from industry.
The expected passage of a Brazil's revised forestry code will require thousands of farmers to set aside more of their land with forest cover. The exchange hopes to introduce an offsetting asset to do this virtually by enabling those with excess coverage to sell credits on it to those falling short.
Brazil's stocks and commodities exchange BM&FBovespa launched trading in carbon offsets in 2007, but the papers traded at the Rio exchange will be the first created to enable companies to meet mandatory emissions limits.
Under the Kyoto Protocol, Brazil has committed to reducing its carbon dioxide emissions by between 36 and 39 percent by 2020.
(source: www.trust.org)
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