Environmental Law Newsletter

CARBON MARKET

First Auction To Sell Carbon Credits In Brazil

On September 26, 2007, the Mercantile and Futures Exchange (BM&F) held its first auction for the sale of CERs (Certified Emission Reductions), i.e., carbon credits that are being generated as part of MDL, which is one of the flexibilization mechanisms provided for in the Kyoto Protocol.

In the auction, 808,405 carbon credits were sold, all of which had been generated under the methane burning project developed at the Bandeirantes landfill, which belongs to the Municipality of São Paulo. The winning bidder was Banco Fortis NV/SA that paid approximately 16.20 Euros per ton of carbon equivalents, in a total of approximately 13.096 million Euros.

Rio+15 Conference

With the purpose of discussing the positive and negative developments of the current global climate policy and also the evolution of the carbon markets, including voluntary markets and the ones regulated by the Kyoto Protocol, specialists from different institutions met during the Rio+15 Conference, which was held on September 19 and 20, 2007, in Rio de Janeiro.

During the conference, a number of representatives of the financial sector emphasized that political uncertainties and bureaucracy still hinder larger investments in projects of reduction/removal of greenhouse gases as part of the flexibilization mechanisms described in the Kyoto Protocol. In their opinion, the market still needs a consolidated regulatory framework, which could improve the forecast of risks involved in carbon credit operations.

The negotiations for the potential adoption of goals by emerging countries, such as China, India and Brazil were also commented during the conference. The Executive-Officer of the Inter-Ministry Commission on Climate Changes in Brazil, José Domingos Miguez, defended the standing adopted by the Brazilian government, which does not accept the imposition of mandatory goals as part of a new international treaty. His main argument is based on the principle of common, but differentiated responsibility for developing countries, which, historically, have had a lower degree of contribution to the global warming effect, and for developed countries, which should accept the larger part of the responsibility for the reduction of emissions.

LEGISLATION

FEDERAL

Establishment Of The Chico Mendes Institute For The Conservation Of Biodiversity

After the strike affecting IBAMA and lengthy discussions, the new authority in charge of the...