VZCZCXRO9846
RR RUEHAST RUEHDH RUEHHM RUEHLN RUEHMA RUEHPB RUEHPOD RUEHSL RUEHTRO
DE RUEHBR #0140/01 0401548
ZNR UUUUU ZZH
R 091546Z FEB 10
FM AMEMBASSY BRASILIA
TO RUEHC/SECSTATE WASHDC 0443
INFO ENVIRONMENT SCIENCE AND TECHNOLOGY COLLECTIVE
RUEHRG/AMCONSUL RECIFE
RUEHRI/AMCONSUL RIO DE JANEIRO
RUEHSO/AMCONSUL SAO PAULO

UNCLAS SECTION 01 OF 02 BRASILIA 000140 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: SENV KGHG EFIN KSCA BR
SUBJECT: BRAZIL: INCORPORATING CLIMATE CHANGE POLICY INTO DOMESTIC 
LEGISLATION 
 
REF: 2008 BRASILIA 1462; 2010 BRASILIA 108; 2009 BRASILIA 1460 
 
(U) THIS CABLE IS SENSITIVE BUT UNCLASSIFIED AND NOT FOR INTERNET 
DISTRIBUTION. 
 
 
 
¶1.  (SBU) SUMMARY.  At the Copenhagen Conference of the Parties to 
the UN Framework Convention on Climate Change (UNFCCC), the 
Government of Brazil (GOB) announced the mitigation actions it 
plans to take to reduce its greenhouse gas emissions by 36.1 
percent to 38.9 percent by 2020 compared with "business as usual." 
Now, the GOB has gained Congressional support for its climate 
change policy, which has been incorporated into domestic 
legislation.  For good measure, the Congress has approved a 
separate law creating a National Climate Change Fund.  This fund 
will support mitigation and adaptation projects and will rely 
principally on a to-be-determined portion of future oil and gas 
revenues.  END SUMMARY. 
 
 
 
THE NATIONAL CLIMATE CHANGE POLICY LAW 
 
 
 
¶3.  (SBU) At the Bali conference in December 2008, the GOB released 
its first National Climate Change Plan.  The plan consists of a 
detailed listing of a host of current and planned measures to 
reduce greenhouse gas emissions by sectors: forests, agriculture, 
energy, transportation, etc. (REFTEL A)  Most notably, the Plan 
included a goal of sharply cutting the rate of deforestation in the 
Amazon by nearly 70 percent by 2017.  The Plan came out of 
extensive work by an interministerial group, and it obtained the 
approval of President Luiz Inacio Lula da Silva.  The Plan provided 
the basis for the ambitious position that the GOB took at 
Copenhagen.  As a next step, the GOB sought Congressional 
endorsement of its climate change goals and efforts.  Accordingly, 
the Congress passed legislation (Law 12.187/2009), which President 
Lula signed on December 29, 2009, that reflects the position the 
GOB presented at Copenhagen, which was later inscribed into the 
Copenhagen Accord.  (REFTEL B) 
 
 
 
¶4.  (SBU) The National Policy on Climate Change Law is a short 
piece of legislation - just six pages - that sets forth the general 
principles Brazil will follow.  Highlights of that legislation 
include: 
 
 
 
- Adopting mitigation actions (which the GOB will determine) to 
reach a voluntary national goal of reducing greenhouse gas 
emissions by 36.1 percent to 38.9 percent compared with projected 
emissions by 2020.  (Art. 12) 
 
 
 
- Requiring that climate change reduction efforts be compatible 
with sustainable development and economic and social interests. 
(Art. 4 and Art. 5) 
 
 
 
- Designating the principal instruments for implementation, most 
importantly: the National Climate Change Plan (which empowers the 
GOB authority to establish individual mitigation activities); the 
National Climate Change Fund (discussed below); Brazil's submission 
to the UNFCCC Conference of the Parties; and fiscal measures. 
(Art. 6) 
 
 
 
- Authorizing the Executive Branch to establish sectoral plans for 
mitigation and adaptation with the objective of creating a low 
carbon economy.  (Art. 11) 
 
 
 
- Creating the Brazilian Market for Emissions Reductions (MBRE) to 
provide for trading in avoided emissions certificates. 
 
BRASILIA 00000140  002 OF 002 
 
 
¶5.  (SBU) The GOB intends to unveil in March a revised National 
Climate Change Plan.  There are at least two significant changes 
expected to be made to the 2008 Plan.  First, the GOB intends to 
reduce the rate of deforestation in the Amazon by 80 percent by 
¶2020.  This is a bit more ambitious than the 2008 Plan, which 
called for a reduction of about 70 percent by 2017.  Second, the 
revised Plan will likely contain a goal to reduce the rate of 
deforestation in the Brazilian savannah region (the Cerrado) by 40 
percent by 2020.  This was the next largest mitigation measure 
announced at Copenhagen after reducing the rate of Amazon 
deforestation. 
 
 
 
THE NATIONAL CLIMATE CHANGE FUND LAW 
 
 
 
¶6.  (SBU) Besides obtaining congressional support for its climate 
change policy, the GOB sought to establish a new domestic climate 
change financing mechanism.  Consequently, the Congress enacted a 
law (No. 12.114, dated December 9, 2009) that creates the National 
Climate Change Fund with the purpose of supporting "projects or 
studies and financing of undertakings that aimed at mitigating 
climate change and adapting to the effects of climate change."  The 
legislation calls for the Environment Ministry to set up a Steering 
Committee, which includes six federal government representatives 
and five representatives from non-governmental sector. 
 
 
 
¶7.  (SBU) The Fund will provide financial support for mitigation 
actions, adaptation measures, education and training, payment for 
environmental services related to contributing to carbon stocks, 
reducing deforestation and recuperating of degraded forest areas. 
The National Development Bank (BNDES) will administer the Fund. 
This is the same bank that administers the Amazon Fund, which has 
received pledges of over a US$1 billion from Norway and Germany for 
conserving the Amazon forest.  (REFTEL C) 
 
 
 
¶8.  (SBU) The principal source of funding for the National Climate 
Change Fund is meant to be from a special participation in oil 
royalties under the National Energy Policy Law (No. 9.478 of August 
6, 1997).  That law is amended to provide (Article 50) that in case 
of high earnings from oil or gas the President may decree a special 
participation, which will be shared between the Ministry of Mines 
and Energy and this new Fund.  (COMMENT.  Environment Minister 
Carlos Minc has spoken of the Fund potentially receiving billions 
of dollars from the exploitation of Brazil's vast offshore oil and 
gas reserves.  However, it is likely to take many years before 
those revenues come on line, and then the President will have to 
decide whether and how much of a special participation to give the 
Fund.  END COMMENT.)  The Fund may also receive budget 
contributions and international and national donations. 
 
 
 
¶9.  (SBU) COMMENT:  The GOB has obtained congressional approval for 
its climate change policy, including the overall voluntary target 
of reducing emissions by 36.1 to 38.9 percent by 2020.  Further, it 
has obtained a broad mandate to develop individual domestic 
measures to achieve the overall goal.  The legislation creating a 
National Climate Change Fund is a positive step forward, though it 
leaves the contentious issue of funding unresolved.  With these two 
pieces of legislation, the GOB will go to the UNFCCC COP-16 in 
Mexico with the backing of Congress for the ambitious position it 
laid out in Copenhagen.  END COMMENT. 
 
 
 
SHANNON 
SHANNON