Analysis: Industry’s contributions in the reduction and compensation of emissions
The decarbonization of the economy is one of the fundamental steps for the world to be able to meet the targets set out in the Paris Agreement, signed by 195 countries to reduce greenhouse gas emissions. The goal is to contain average global warming below 2°C compared to pre-industrial levels, preferably at the more ambitious level of 1.5°C.
To contain Brazil’s emissions, disruptive solutions will be needed. For reasons of sustainability of the planet, as well as business in general, the industrial sector must play a leading role in the search for these solutions. Companies in the cellulose and paper sector, for example, due to the very nature of their activities, have a great relevance in this scenario and can facilitate the mitigation of the effects caused by climate change. Forest bases can directly contribute to the conservation of biodiversity, regulation of hydrological cycles and removal of carbon dioxide from the atmosphere.
According to the Brazilian Business Council for Sustainable Development (BBCSD), the industrial sector, responsible for 5% of all emissions, is able to attract the interest of foreign investors in these projects. Therefore, resources in the form of ‘export’ of credits or attraction of climate finance are needed to move Brazilian environmental policies and preserve the Amazon Forest.
This transition to a carbon neutral economy can open up new economic opportunities and help generate jobs. By current estimates from a study published by McKinsey, the move would create a $26 trillion direct earning opportunity, and 65 million new jobs by 2030. Today, there are sectoral discussions for creating organized national markets and other decarbonization solutions. However, a unified plan on the issue is lacking.
COP26 brings expectations of final Article 6 negotiations to reach an agreement on the role of rich countries in the global trade in carbon credits. Based on the latest IPCC report, scientists say that current global emissions targets are inadequate and that negative emissions strategies are needed.
Brazil shows great potential to play a key role in this transition to the low carbon market, due to its forests, but it needs effective environmental policies and a regulated carbon market.