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Prices Triple in Brazil's Lopsided Market for Carbon Credits

Some call the program ‘inefficient.’ Others say it’s downright flawed. Either way, the sharpest critics say RenovaBio is not living up to its promise.

Trucks are loaded down with sugarcane stalks in Brazil. 

Trucks are loaded down with sugarcane stalks in Brazil. 

Photographer: Paulo Fridman

Something is amiss in Brazil’s biggest carbon market. 

At best, the program known as RenovaBio that mandates fuel distributors purchase biofuel credits is “asymmetrical” and “inefficient,” with an expected shortage of credits driving prices to more than triple since the start of the year, said Joisa Dutra, a professor at the Fundacao Getulio Vargas business school who has studied the program. At worst, its sharpest critics say, the program overpromises on emissions impact, ignores international standards and risks shrinking the potential market for other carbon credits — ones they say could more directly help the country meet its climate goals.