The application of the carbon market in Brazil: a complement to environmental taxation

Abstract

This paper aims to verify the possibility of implementing the carbon market in Brazil, under theoretical and practical perspectives. The literature review and the comparative Law study were the selected methods. The results demonstrate that, in order to create a carbon trade system, the countries need to set a maximum limit of emissions, and then distribute licenses to the companies which will operate in each area. The companies that pollute more will have to buy additional permits from other companies. Those that succeed in reducing their emissions may get additional benefits by selling the unused parts of their licenses to other companies. At the international level, the initial distribution of authorizations will benefit countries in development such as Brazil, since developed countries will have to buy surplus permits to maintain or expand their economies. As a conclusion, it may be said that the offer and demand will be an incentive to reduce emissions, either by the use of cleaner technologies, or by the stimulus directed to the economic development of some countries - by selling the exciding quotas, by transferring the industries to countries with exciding credits, or by financing clean development mechanisms in developing countries. Brazil could have some benefits due to the carbon capture, the conservation of its forests and its ecosystems as well.