This report examines the potential effects of border carbon adjustment (BCA) schemes on Brazil, drawing insights from diverse stakeholders through extensive research and countrywide dialogues. It addresses challenges such as short-term impacts on exports, economic activity, and employment, amongst others. Recommendations emphasize the importance of balancing climate action with equity through international collaboration and best practices in BCA design.
Authors
- Pages
- 33
- Published in
- Canada
- Rights
- IISD, 2024
Table of Contents
- 1.0 Introduction 5
- 2.0 Context 7
- 2.1 What Is a BCA? 7
- 2.2 Why Has BCAs Become a Relevant Topic in the International Agenda? 8
- 2.3 Brazil’s In-Country Process and its Objectives 10
- 3.0 The Expected Impacts of EU’s CBAM in Brazil and the Risks of BCA Diffusion to its Jurisdictions 11
- 3.1 The Relevance of the EU Market for CBAM-Affected Products 11
- 3.2 Brazil’s Relevance as a Supplier to the European Market and Its Main Competitors 14
- 4.0 Reactions and Responses by the Main Stakeholders 18
- 4.1 Response by the Brazilian Government 18
- 4.2 Responses by the Business Sector 18
- 5.0 The Dialogues in Brazil: Stakeholders’ main concerns and stances 22
- 5.1 The First Dialogue: Main statements from stakeholders 22
- 5.2 The Second Dialogue: Key design elements of BCAs, principles and best practices, and implementation issues 23
- 6.0 The Financial Sector Role: A work in process… 27
- 7.0 BCAs as a Public Issue in Brazil: A limited debate 29
- References 31
- Figure 1. Chapter 26 products exports distribution (average participation 2020–2022) 12
- Figure 2. Chapter 72 products exports distribution (average participation 2020–2022) 13
- Figure 3. Chapter 73 product export distribution (average participation 2020–2022) 13
- Figure 4. Chapter 76 products exports distribution (average participation 2020–2022) 14
- Table 1. Brazilian exports of CBAM products – EU (average 2020–2022) 12
- Table 2. The world’s main exporters of CBAM-affected products in the iron, steel, and aluminum sectors 15
- Table 3. EU’s main suppliers of the CBAM-affected products in the iron, steel, and aluminum sectors 15
- Table 4. Relative exposition to the CBAM index for the iron and steel sector: Brazil and its main competitors in the EU 16
- Table 5. Relative exposition to the CBAM index for the aluminum sector: Brazil and its main competitors in the EU 17
- Box 1. CNI’s submission to the European Commission on July 11, 2023: Brief summary 19
- Box 2. CNI recommendations for the design of new BCAs 20
- Box 3. Interview with Joaquim Levy: Summary notes 27
