April 18, 2012 / 6:44 PM / 8 years ago

Brazilian states discuss carbon market link

(Published by Thomson Reuters Point Carbon)

SAO PAULO, April 18 (Reuters) - Brazil’s Sao Paulo state is in talks to buy forest carbon credits from the upper Amazon state of Acre that would allow Sao Paulo state to meet targets for reducing emissions, an official said on Tue sday.

Sao Paulo, an industrial powerhouse with 40 million residents, is seeking access to emission cuts in Acre to help it reach its target of reducing greenhouse gas emissions to 98 million tonnes of CO2 equivalent in 2020 from 122 million tonnes in 2005.

Eufran Ferreira do Amaral, head of Climate Change Institute of Acre, told Point Carbon News that the state signed a memorandum of understanding last week.

“A technical group will work to integrate Sao Paulo climate legislation with Acre’s environmental services system,” he said.

Acre has 7.4 million hectares of forested areas under protection, and is one of the most advanced states in Brazil regarding climate policies and actions to generate carbon credits from avoided deforestation.

The state is already in talks with California to participate in the U.S. state’s cap-and-trade system.

But Ludovino Lopes, an environmental lawyer advising Acre’s government, said Sao Paulo could prove a bigger source of demand for credits than California.

“If projects in areas such as energy efficiency are not enough for them to reduce emissions, they will have to seek credits elsewhere,” he said.

According to Lopes, Acre would have to compete with other international sources of forest-originated carbon credits to supply a share of only 2 percent of California’s ETS (emissions trading system).

That would represent a total volume of between 200 and 260 million tonnes of CO2 equivalent up to 2020.

“In one or two years Sao Paulo could represent a larger amount than that,” the lawyer said.

Sao Paulo has sought some initiatives to reduce emissions, mainly with biofuels and cleaner energy generation projects.

But the state does not have a plan to impose sectoral targets to its industries, fearing companies could move to neighboring states to avoid restraints.


Acre’s Amaral said the state could offer the first lots of avoided deforestation credits in 2013.

“We are going to start with small volumes to show that the system can work. Our main objective is to demonstrate that a sub-national system can work at an international level,” he said.

The long term aim is to integrate all nine Amazon states under one model.

The work being done in Acre has been shared with neighboring states, said Amaral. But they are still moving in different gears, he added. (Reporting by Marcelo Teixeira; Editing by Reese Ewing and David Gregorio)

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