By Walter Schalka*

The agreement on the rules of the regulated carbon market represents a historic advance from the 26th United Nations Conference on Climate Change (COP26), which ended on the 13th, in Glasgow. Once put into practice, it will be an important step towards a global system of investments in decarbonization.

It is a result that deserves to be celebrated, as well as other important announcements made during the COP26, mainly because it is a consequence of a strong role of civil society to achieve it. However, we cannot disregard that the combination of all the commitments formalized by the group of countries during COP26 is still insufficient to maintain the increase in the global average temperature at a level of 1.5oC in relation to pre-industrial levels. And it is the fulfillment of this goal that will determine the success of the efforts mobilized to face the climate crisis, with a reduction of damages in the living conditions of this and future generations.

The approved proposal for the regulated carbon market provides greater transparency, security and credibility to the system, with two stages of approval. The first, at the country’s discretion, whether or not to validate the climate project. In the second stage, the initiative undergoes an international audit, to be conducted by the United Nations Framework Convention on Climate Change (UNFCCC).

As the number of approved projects is limited, the carbon credits to be traded on the regulated market tend to acquire significant valuation. The result is the raising of financial resources in the scale and time required for investment in projects to reduce carbon emissions, with positive social impacts in the regions where they will be developed.

At the same time, when we think about the future, the carbon credit will have no value since, hopefully, the climate issue will have been addressed with a major change in the world’s electricity matrix and in transport.

We resolved a historic issue, and Brazil presented an important evolution in its position during COP26, by making concessions on issues that imposed limitations on the search for consensus. At the beginning of the meeting, the country announced a new NDC, with the anticipation of neutrality of emissions for 2050, previously planned for 2060, and the reduction of carbon emissions from 43% to 50% by 2030. In the scope of the signed agreements, committed to goals to reduce methane gas emissions and to eliminate deforestation by 2030. These are some of the advances achieved at COP26, which will certainly have important environmental, social and economic impacts in the future.

Other relevant issues, however, had less than desirable advances, such as the renewal of the commitment not yet reached by developed countries to allocate US$ 100 billion annually in decarbonization projects in poorer nations. Despite the Brazilian position of demanding a better relationship between the availability of resources and the execution of decarbonization projects, there were no concrete definitions of values ​​and deadlines in the final COP26 agreement.

The standardization of metrics for measuring NDCs, which is of fundamental importance, has made little progress, despite the work carried out by the Science Target Based Initiatives to mobilize companies to adopt science-based targets to reduce their greenhouse gas emissions.

The commitment to reducing the use of fossil fuels has achieved the possible result, considering the resistance of countries that are large oil producers or coal consumers, and whose economies are still highly dependent on these inputs. In any case, the final report of COP26 points, in an unprecedented way, to the need to reduce the use of inefficient energy sources, as a goal to be met in the near future. There is, therefore, still a lot to be discussed and pursued until COP27, in 2022.

Multilateral negotiations, such as those carried out at COP26, are extremely complex because they involve the search for consensus among nearly 200 countries, all with veto power. Changes, therefore, occur gradually, especially in more sensitive topics. This is a game that only ends when global carbon emissions are stabilized at a level that ensures the maintenance of the planet’s average warming at 1.5oC.

Therefore, with the event in Glasgow closed, the world now has a series of steps to be initiated so that the achievements achieved at COP26 do not remain on paper. The same goes for Brazil, with an extensive and complex internal agenda to be built. It will be necessary to mature a series of public policies aimed at the climate agenda, especially the one that creates the Brazilian Emission Reduction Market.

The discussions that took place during COP26 made it clear that this is just an advance, among others that will need to be achieved in the future, and that the planet needs immediate, effective and continuous actions by governments, companies and consumers. After all, either we all win or we all lose with the decisions and actions set out now.

*Walter Schalka is president of Suzano.