Carbon Market Simulation

Through the National Policy on Climate Change (PNMC), the Brazilian government has made a legal commitment to reduce its greenhouse gas emissions by 36% below current projections by 2020. To facilitate compliance with this goal, the Climate Change Law proposes the creation of a national market for carbon emissions, including a system of emission quotas for the industrial sector (cap & trade). Most Brazilian companies, however, still feel insecure about the consequences of adopting reduction targets. Few companies today have sufficient knowledge on this subject to participate in a quota trading system.

To support companies in preparing for this reality in a positive and participative way, the Center for Sustainability Studies of the Getúlio Vargas Foundation (GVCes) developed the Empresas pelo Clima (EPC) platform, with the participation of 40 leading companies in their markets. Since 2008, these companies report their emission inventories (see more at GHG Protocol Brasil) and sector analyzes are produced by GVces for a better understanding of the dynamics of each sector.

The carbon market simulation aims at mobilizing and articulating business leaderships for the management and reduction of GHG emissions, as well as for the management of climate risks and the proposal of public policies and positive incentives in the context of climate change. Based on the simulation, the Brazilian business community evaluates its risks and opportunities and collectively discusses practical solutions and contributions to the country's legal framework.

BVRio takes part in the council of this initiative, together with representatives of GVces, Prince of Wales's Corporate Leaders Group on Climate Change (CLG), University of Cambridge Sustainability Leadership, the Perspectives Climate Change and the Environment Defense Fund (EDF). In addition, BVRio offers a trading platform for this simulation, an auction system, and a quota register, including differentiated interfaces for different types of participants (companies, government, market operator). This structure should be used for real carbon trading systems when they startup.