Market Readiness Programme Brazil

Start & End Date: 2011-Ongoing

Country/Countries: Brazil

Multilateral Institution(s) Involved: World Bank

Brazil has a voluntary target to reduce domestic emissions to 36.1%-38.9% below its business-as-usual projection for the year 2020, as outlined in the pledge made at the Copenhagen Conference of the Parties to the UNFCCC in 2009.

The PMR supports Brazil to explore options for various types of carbon pricing schemes in order to select suitable instrument for implementation and to build MRV capacity. The MRP has three components: (i) Component 1 of the MRP focuses on analytical studies aiming to develop alternative design options, covering both carbon tax and ETS policy options; (ii) Component 2 is designed to apply different tools to assess the impacts of the market-based instrument(s) proposed by Component 1; and (iii) Component 3 is dedicated to the communication, consultation and engagement process. The grant became effective on May 6, 2015, after the conclusion of the arrangements for its execution through the World Bank directly, following which the implementation phase was initiated. As of now, the activities are expected to be completed before the grant’s closing date, on May 2020.

Brazil has made significant progress toward achieving its voluntary target. Emissions from land use and land use change (LULUCF) represent the largest contributor to the countries emissions profile. Between 1995 and 2005, emissions from this source were reduced by 40.1% and by an additional 76% between 2005 and 2010 largely as a result of the stoppage of deforestation to old growth forest. In 2010, it reported that nationally its GHG emissions were 60.6% below projected emissions in 2020. As a result, the country has taken a hard look at how its emissions profile is changing and adapt the National Plan accordingly. The PMR is helping to explore and analyze options that can help Brazil to continue to cut emissions in the most cost-effective and efficient way to both meet its 2020 target and prepare for new targets post-2020.