Why did agribusiness celebrate exclusion from the carbon market?

The agribusiness sector was left out of the bill that will regulate the greenhouse gas emission quota system in Brazil, approved by the Senate’s Environment Committee this week. According to the project, the primary activities of the agricultural sector will not be part of the Brazilian Emissions Trading System (SBCE). The exclusion of the sector responds to a request from the agribusiness bench in Congress, the Parliamentary Agricultural Front (FPA), and was considered a victory.

Critics of the sector’s exclusion from the project point out that agriculture is the main source of greenhouse gas emissions, responsible for 75% of the total, and, therefore, should have been included in the emission quota system. The coordinator of MapBiomas, Tasso Azevedo criticized the exclusion of agribusiness from the PL, saying that the system “was born destined to be dwarf”.

“No other carbon market in the world excludes the main emitting sector from regulation. In regulated sectors, the law provides that only those who emit more than 25 thousand tCO2e [toneladas de CO2 equivalente] per year may have defined limits. In livestock farming, for example, there would be at least 20 thousand heads of cattle,” said Azevedo. According to the project website, “MapBiomas is an initiative of the Climate Observatory, [que envolve] universities, NGOs and technology companies [para] annually map Brazil’s land cover and use and monitor changes in the territory”.

On the other hand, agribusiness arguments permeate the lack of parameters for measuring emissions and removals from the activity, as well as the lack of regulation in other countries. In her report, senator Leila Barros (PDT-DF) considered that Brazil should focus on encouraging low-carbon agriculture.

“More important than regulating agricultural activities is encouraging the dissemination of low-carbon agricultural techniques that, at the same time, increase rural producers’ income, make rural systems more resilient to the adverse effects of climate change and provide reduction and sequestration of emissions”, highlighted the senator when accepting the proposal from the agribusiness bench.

Other countries also do not regulate agricultural emissions in the carbon market

One of the arguments presented for the absence of agriculture in the regulated system, approved in the project that passed through the commission, was that there are still no countries that have regulated the sector. Experts also consider that agriculture has a series of complexities that must be taken into account.

In the senator’s report, this point was also taken into consideration. “In the main regulated carbon markets, agriculture is not included in the regulation, mainly due to the importance of the sector for food security and the many uncertainties that still exist in the methodology for estimating the sector’s emissions inventories”, highlighted Leila Barros.

In industry, for example, greenhouse gases are concentrated in some processes, while in agriculture they are more dispersed. “The net emissions of a cement factory are practically equal to its emissions, given that there are no gases removed in the process. A cattle farm removes carbon from the atmosphere through photosynthesis from its pastures and emits gases through animal metabolism and soil correction processes. Its net emissions will depend on its level of productivity, which may be positive or negative”, explained the former Secretary of Climate and International Relations at the Ministry of the Environment, Eduardo Lunardelli Novaes.

At this point, it is important to clarify that net emissions result from gross emissions minus carbon removals by protected areas, land use changes and secondary vegetation, for example.

Most countries have industry as their main emitter

Brazil’s situation, in the carbon market scenario, is different from other countries. In addition to the difficulty in establishing criteria to measure net emissions from agricultural production, most other countries have industry as their main source of emissions.

Novaes also highlights that, at the international level, countries generally preserve their competitive advantages. “New Zealand, for example, gives special treatment in its commitments to methane, for example. This special treatment could be failing to sign a global methane agreement or assuming different targets from the national target determined in the Paris Agreement, for example,” explained the former secretary.

Brazil occupies 7th place on the list of greenhouse gas emitting countries. However, the country’s emissions correspond to just 3% of the total, while India emits more than twice as much, reaching 7% and occupying 3rd place on the list of countries with the highest emission rates. According to 2019 ranking data Climate Watch (Cait), from World Resource Institute (WRI) – which considers net emissions -, Brazil is behind China (25.2%), USA (12%), India (7%), European Union (6.6%), Russia (4.1% ) and Indonesia (4%).

In the Chamber, coordination will be to regulate the voluntary carbon market

While in the Senate, agriculture was removed from the final text, the scenario tends to be different in the Chamber of Deputies. In a press conference after the Brazilian Agriculture and Livestock Confederation (CNA) event on the economic impacts of the tax reform, the president of the FPA, deputy Pedro Lupion (PP-PR), stated that the regulation of the voluntary carbon market will come by the Chamber.

Analysts interviewed by People’s Gazette consider that it is more compatible with the system’s intention to include agriculture in a voluntary market, in which benefits can be obtained through the effective reduction of emissions. The implementation of a technical and reliable measurement, which is not yet available, could encourage Brazilian rural producers to reduce greenhouse gas emissions in their activities.

“There are two proposals being processed in the Chamber with federal deputies Zé Silva (SD-MG) and Sergio Souza (MDB-PR). We will regulate the voluntary market and ensure that producers can benefit from good practices, environmental preservation, compliance with the law, direct planting, preservation of springs, carbon sequestration for which agriculture is largely responsible,” he said. Lupion. The FPA president also said that in the Senate project, producers were not benefiting as they should, despite there being a good intention.

Senator Luis Carlos Heinze (PP-RS) also highlighted the importance of the agricultural sector for regulating the emission system in the country. “We have an asset that no country in the world has. It’s not just the Amazon rainforest. Agro is highly creditworthy, this is the process that we need to discuss and claim in the world, Brazil has a positive balance for agro”, said Heinze.

Although it was left out of the regulated market in the project approved by the Senate, the agricultural bench guaranteed that the maintenance or restoration of Permanent Preservation Areas (APP), Legal Reserve or restricted use, in accordance with the rules of the Forest Code, can be eligible for the constitution of carbon credits for the purposes of the SBCE. “Agriculture has been excluded at this moment, not because it does not want to participate, agribusiness is the major supplier of carbon credits. We made an agreement and I want to say that it was fully complied with by Senator Leila in this report. The FPA is very comfortable approving its report”, said Senator Tereza Cristina (PP-MS).