Lula government wants ‘green revolution’ with carbon market and bond issue

The Brazilian government has announced plans to bring about an eco-friendly economic transformation, according to the Undersecretary of Sustainable Economic Development, Cristina Reis.

The proposed strategy includes the creation of a carbon market, issuance of sustainable bonds, and the development of a national taxonomy to aid the green transition.

The project, crafted by the Treasury and ten other ministries, is currently undergoing a legal review and is expected to commence next month.

The first phase entailed structuring the economic foundations, and now, the attention shifts towards defining the development strategy.

The launch of sovereign bonds is anticipated between September and November.

In relation to the carbon market, the government aims to present an extensive, contemporary proposal to the legislature, despite existing projects.

Regarding developing a national taxonomy, a standard should be established within two years for companies to reference.

While individual banks have created their taxonomies, a national standard is necessary.

Technical support for this initiative comes from the German government’s technical cooperation agency, GIZ, with plans to seek more international partners.

Public consultation on the taxonomy is expected to occur after the project’s launch to gather societal input.

By November, the group should have a taxonomy roadmap in place, and a technical team will have a year to finalize the sustainable classification’s first version.

By 2025, Brazil will host the international climate event, COP-30, and the hope is to have this entire process well underway by then.

The taxonomy will include not only environmental aspects, but also social and gender considerations, demonstrating a focus on sustainable development