Rio de Janeiro is launching a stock exchange for carbon credits and sustainable assets. Rio signed a protocol of intent Tuesday with the Nasdaq and Global Environmental Asset Platform (GEAP).
Rio’s goal is to have a leading role in the green economy. Once approved, they hope to have their Environmental Assets Exchange running soon.
According to Carlos Alberto Reis, former president of the Rio de Janeiro Stock Exchange (BVRJ), the partnership with Nasdaq is “very positive news.”
Ricardo Nogueira, director of the Union of Securities Brokers and Distributers of Rio de Janeiro, agreed.
“Having an environmental asset exchange headquartered in Rio is very good, both economically and institutionally for Rio de Janeiro.”
According to Governor Castro, the government team has worked on this agreement for nearly eight months. The goal is that the carbon stock reaches 73 million tons (or $25 billion).
The importance of carbon credits.
Countries that have reduced their emissions sell carbon credits to other counties that haven’t.
Simply put, one carbon credit is equal to one metric ton of carbon.
While carbon credits aren’t the only way countries can take the necessary steps to fight climate change, it’s a start. Nations typically use any profits to reduce greenhouse gas (GHG) emissions – like reforestation or cover crops.
Rio de Janeiro believes this will help the environment create domestic and international jobs.
According to Secretary of State for Finance Nelson Rocha, “We are going to create a favorable environment for this expansion to take place in the coming years. We want to make Rio a hub (base) for investments in environmental assets.”
Currently, 31% of Rio has natural forests. They expect to increase that coverage by 10% by 2050 by investing $410 million into reforesting projects.
This program will create more than 5,000 jobs.
Rio is actively working towards carbon neutrality – with the goal of 2045.