The introduction of a federal cap-and-trade system in the US
would bring significant changes to carbon markets globally. Not
only the market would increase, but also the underlying emissions
reduction projects would have a more diversified basis. This will
be possible if the Lieberman-Warner Climate Security Act of 2008,
as proposed by a bill introduced in the US Senate by Senator
Barbara Boxer on May 20,2008, is enacted.
The proposed Lieberman-Warner Act establishes a program to
substantially decrease US emissions of greenhouse gases between
2007 and 2050 by creating a cap-and-trade system in which polluting
entities (the "Covered Facilities") would be included. If
the established pollution cap, which shall decrease annually, is
not met by the Covered Facilities, they will have to purchase
allowances in the market.
The bill establishes three different types of allowances: i)
Emissions allowances, which are annually established and
distributed by the Administrator of the Environmental Protection
Agency; ii) Offset Allowances, which are issued and certified for
greeenhouse gas emission reductions below a project baseline; and
iii) International Emissions Allowances, which are allowances
obtained on a foreign greenhouse gas emissions trading market.
The cap-and-trade system to be established under the
Lieberman-Warner Act would create a large array of new bussiness
opportunities for market players, once it would expand the
possibility of carbon offseting through other types of projects
that are not covered by the Kyoto Protocol. An example of this
would be projects that avoid deforestation.
As a consequence, it would be possible to develop forest
conservation projects that could generate emissions reductions.
Brazilian investors would potentially benefit directly from such
provision, considering that Brazil has one of the largest
forestlands in the world. American investors could also benefit
from this provision by partnering up with Brazilians to set up
forest conservation projects, which implementation costs could be
lower than in the US.
Two other areas that could drive the attention of both Americans
and Brazilians, in light of the vast technological developments in
Brazil in the past several years, are the production of biofuels
and the agribusiness sector. Brazil has been in the forefront of
agricultural production worldwide, because of its vast portions of
highly productive agricultural land and good climate
Another type of project that could contribute with the capture
of carbon dioxide from the atmosphere is the so-called "carbon
farming". A few countries, including Australia, have been
studying the idea and have reached the conclusion that carbon
sequestration could be put into practice by farmers, through a
process that involves raising grass-fed cattle instead of
grain-fed. Studies proved that grazing animals help the capture of
carbon dioxide by grass into the soil. This capture, moreover, is
proved to be more efficient than the one resulting from trees and
forests, since grass (and crops) cover more of the Earth's
surface than forests, and grow faster. If this new technique comes
into play in the carbon world, Brazil can greatly benefit from it,
once it has a large part of its territory covered by crops, and
mainly all the cattle raised in Brazil is grass-fed.
The possibility of using International Emissions Allowances
(such as the emissions from the Kyoto Protocol, the EU Emissions
Trading Scheme and from voluntary markets) to comply with the cap
under the Lieberman-Warner Act may also contribute with the
enlargement of allowances market. However, pursuant to a provision
of the Lieberman-Warner Act, the owner or operator of a Covered
Facility may satisfy only up to 15% of the allowance submission
requirement of such Covered Facility by submitting International
Should the Lieberman-Warner Act be enacted, projects that
currently aim at generating VERs will become more atractive to
investors. Thus, first movers in this field may benefit from being
pionneers. These projects must be structured with some flexibility
to allow for any future migration into the Lieberman-Warner
Investors in a number of natural resources projects, including
energy-related projects, should pay close attention to the
worldwide developments in relation to climate change regulations.
The continuity of the Kyoto Protocol and the discussions under the
Lieberman-Warner Act may represent real opportunities that may be
capitalized in the near future.
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guide to the subject matter. Specialist advice should be sought
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A new law has been enacted in the Province of Buenos Aires in connection with management of waste electrical and electronic equipment (hereinafter, "WEEE"). Law No. 14,321 was published in the Official Bulletin of the Province of Buenos Aires on December 15, 2011 (including certain notes established in the Enactment Decree No 2300/10) and became effective on December 23, 2011 (hereinafter, the "WEEE Law").
The Regulation of the National Policy on Waste Management, established by Decree No. 7,404/10 (the Decree), was published on December 23, 2010.
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