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Latin America Climate Summit

20/10/2022

Trench Rossi Watanabe joined the discussions of the Latin America Climate Summit, event promoted by IETA – International Emissions Trading Association in Rio de Janeiro. The topic of discussion this year was “Where Carbon Markets Meet to Drive Climate Action Forward”.

Below are the key takeaways of the discussions:

  • Latin America has a huge potential in generating carbon credits and is already receiving a lot of projects and initiatives focused to it. In particular, Brazil can’t lose its leading role in the international market. Even if limited at first, an adequate regulation will unlock investments and bring greater legal certainty to businesses.
  • Improve Brazil’s image on the international stage, through effective actions to combat deforestation and enforcement, is essential to bring more credibility to credits generated in Brazil, increasing its value in the market.
  • The carbon market is just one piece of green financial assets. These products should be thought broadly. There is a need for regulation of the law related to payment for environmental services.
  • There is a need for greater participation of the private sector in the discussions and decisions taken by the Federal Government on carbon.
  • Financial institutions need more clarity on the legal nature of the carbon credits, as well as more transparency in the report of projects. There is concern about the fragmentation of the market and the fungibility of Brazilian credits with other markets.
  • Banks are also leading initiatives to decrease the burden of due diligence process and improve project governance, focusing on local communities
  • Investments in technology is key to leverage the volume of the credits, monitor and guarantee integrity/ permanency.
  • Methodologies (standards) have to be reviewed and updated to reflect the reality of each country/ biome. Many methodologies need to be adapted to the Brazilian market – issues of credibility and integrity.
  • Climate issues are still very elitist. It is necessary to translate it for farmers, investors, consumers and other players. Normally, agreements are long-term, which is seen as a barrier by farmers.
  • There is an urgency in qualifying professionals to conduct the projects. There is a concern about quality of information and data produced.

Our Environmental, Climate Change and Sustainability team is available to further discuss the event.

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Trench Rossi Watanabe
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