Nations are edging toward a deal that could create a global carbon market when they meet in Scotland for COP26 climate talks in about a week, after Brazil signaled it’s willing to compromise.
Brazil softened its stance on Article 6 of the Paris Agreement, which aims to create a framework for countries and companies to meet their climate goals by trading carbon credits, according to people familiar with the issue, who asked not to be identified because the talks are private. The South American nation has a lot of leverage because the Amazon rainforest — one of the biggest carbon sinks in the world — would generate a large amount of credits in any global offsets market overseen by the United Nations.
Brazil’s willingness to be more flexible is a change after its reluctance to compromise with the European Union at the 2019 Madrid talks led to a deadlock in the negotiations. The new tone comes as businesses have put pressure on President Jair Bolsonaro to resolve the Article 6 debate. Around 100 chief executive officers of large companies recently signed a letter urging him to clarify Brazil’s stance on major issues to be discussed at COP26.