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Brazil, China can be allies in boosting low-carbon economy: expert
Brazil is to encourage participants of the UN climate change conference in Paris to formally acknowledge the social and economic value of carbon emission reduction, Alfredo Sirkis, a former congressman and current executive director of a Brazilian think tank, told Xinhua in an interview.
by Bruna Gama and Marcelo Cajueiro
RIO DE JANEIRO, Sept. 18 (Xinhua) -- China can be a great ally of Brazil in pushing for carbon emission reduction, an Brazilian expert has said.
The Brazilian side believes that it would be the first step toward establishing a more consistent funding system for low-carbon economy.
Sirkis talked about the idea of setting up a mechanism which will make investments in low-carbon economy both safer and more attractive.
According to the former congressman, acknowledging the economic value of carbon emission reduction is an important step to create positive pricing mechanisms, which aims to finance carbon emission reduction projects through such ways as issuing carbon emission reduction certificates.
The mechanisms, he said, will operate not within the UN Framework Convention on Climate Change (UNFCCC), but in organizations such as the G20, central banks around the world, and investment banks such as the BRICS Bank and the Asian Bank, where China can make a difference.
"China has been making great investments in this sector, and I think that, in the future, China will be one of the engines of this low-carbon Bretton Woods," Sirkis said.
Funding and political will, instead of technology, are the greatest barriers to carbon emission reduction, Sirkis said while stressing the importance of attracting investors to low-carbon economy.
"Right now, governments do not have money. On the other hand, there is a lot of money in the international financial market, so the great challenge is to bring some of the money to these investments."
Sirkis suggested creating a system of guarantees for the low-carbon sector so that speculative investments could be attracted through the carbon reduction certificates.
Brazil supports the carbon reduction certificates, a French project, which rules that when a company takes a loan from a bank for a low-carbon project, part of this loan can be paid in certificates of carbon emission reduction.
The bank would then exchange this certificate for currency through an institution to be created -- maybe a pool of central banks, maybe with investment banks. The certificates would be guaranteed by a group of governments.
Sirkis also suggested awarding extra carbon reduction, saying that if a country commits to reducing carbon emissions by a certain percentage in 10 years and achieves the goal ahead of time, it could be awarded money for the efficiency with which the country could work in reducing its carbon emissions even more.
"There are several possibilities, as long as you acknowledge that reducing carbon emissions has value. And it undoubtedly does," he said.
Investing in low-carbon economy would be beneficial to both Brazil and China, Sirkis said, adding that China can be a leader in the field and Brazil can walk the same path.
Some Chinese low-carbon companies such as automaker BYD and solar company Yingli Solar have already been operating in Brazil. Besides, Brazil is a world leader in carbon emission reductions with much clean energy mix.
"China is undoubtedly a partner for Brazil. The two economies are very complementary," he said.