OPINIÃO. Proteger o clima, sem abrir mão do progresso

Brazil must safeguard its climate goal without sacrificing progress. The decisions following public consultation on International Mitigation Result Transfers (ITMOs) regulations place Brazil at a crossroads in the global low-carbon economy. The nation has made strides, establishing the Brazilian Emissions Trading System, expanding the Climate Fund, and launching Eco Invest Brasil to combine public and private resources for ecological transformation.

However, climate financing relies not only on capital supply but also on demand for the environmental assets generated by these investments. A conservation or restoration project can attract competitive interest rates. Yet, without buyers for the generated carbon credits, projects will lack sufficient revenue to compensate and sustain them over years.

Low-cost recourse aids in protecting and restoring forests. Demand, however, is what allows them to stand for decades. This point is particularly relevant for Brazil. According to MapBiomas, 65% of the national territory still conserves native vegetation. No other major economy possesses such a combination of territory, biodiversity, and potential for emissions reduction by protecting ecosystems.

Under Article 6 of the Paris Agreement, ITMOs allow mitigation results produced in one country to be transferred and used by another to meet its climate goal. To avoid double counting, the seller performs the corresponding adjustment and stops accounting for that reduction in its own goal. Brazil's government caution is justified.

It should not transfer reduction volumes that jeopardize its goal. Nor should it authorize credits lacking additionality, traceability, respect for territorial rights, and rigorous socio-environmental safeguards. Yet, caution cannot mean paralysis. The submitted minute set an initial limit of 50 million tonnes of CO2 equivalent between 2031 and 2035.

An overly conservative or tardy design will force Brazil to miss the moment when international buyers structure long-term contracts. Investments are decided now: international regulated markets like CORSIA, entering its second phase in 2027, should significantly increase demand for carbon credits in the coming years (exceeding 1 billion tonnes between 2027 and 2035 according to the ICAO), a scenario where eligible credit offerings remain limited.

Meanwhile, bilateral mechanisms under Article 6.2 of the Paris Agreement are already connecting buyer and seller countries that have advanced in structuring these transfers. Despite Brazil's potential to be the world's leading supplier of such assets, forest projects take years to structure and decades to produce results. Without predictability about international transfers, capital will migrate to countries with clearer and timely rules.

Not authorizing ITMOs does not necessarily mean preserving more reductions for Brazil's goal. In many cases, it means those projects will not exist in the first place. A ton that stops being reduced due to lack of financing does not help either the Brazilian NDC or the global climate. Some authorized results can truly be additional: reductions that only happen because international demand makes investment viable.

This logic is especially relevant for REDD+ methodologies, aimed at reducing emissions from deforestation and forest degradation, conserving carbon stocks, and promoting sustainable management. Excessively limiting REDD+ would be inconsistent with a country like Brazil, which maintains 65% of its native vegetation. Private projects and jurisdictional programs can coexist, provided they are integrated through transparent accounting, prevention of double counting, consultation with affected populations, and fair distribution of benefits.

Integrity should not be confused with immobility. The response to poor projects is to establish rigorous criteria, supervision, and transparency, not to forbid the good ones. And this is where free markets can also help. Brazil should adopt a gradual, yet immediately operational strategy: a positive list including REDD+ and other nature-based solutions; revised limits according to NDC performance; predictable authorizations; recognition of future purchase contracts; and procedures capable of competing with other jurisdictions.

The Climate Fund and Eco Invest represent a historic advance in financing. Now Brazil needs to complete this architecture by creating demand. Public capital can reduce risks, but should not indefinitely replace the private market. Closing the door to high-integrity Brazilian credits will not necessarily protect our climate sovereignty.

It will only displace investments to other countries and leave our forests without funding. Preventing or limiting the export of ITMOs would not be prudence. It would be shooting ourselves in the foot. Because while Brazil tries to get it right, countries like Peru, Thailand, and Ghana, among others, are already building agreements to transfer ITMOs to buyers like Switzerland, Singapore, Japan, and Korea.