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Title | Brazilian Sustainable Taxonomy: Inputs for Classifying Land Use Activities |
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INTRODUCTION In 2023, the Ministry of Finance (Ministério da Fazenda – MF) began drafting the Brazilian Sustainable Taxonomy, an initiative included in the “sustainable finance” axis of the Ecological Transformation Plan. The Taxonomy Action Plan (MF 2023a) was officially launched at COP28 in Dubai in December 2023 (MF 2023b), following a public consultation. The first version of the Taxonomy is expected to be released by November 2024, while its mandatory adoption is scheduled for January 2026. The Brazilian Sustainable Taxonomy will be applied to various economic sectors. A relevant highlight is the classification of land use activities, which include crop production, cattle, and forestry.[1] Establishing sustainability criteria for these activities is crucial in a country where three quarters of greenhouse gas (GHG) emissions come from agriculture and land-use change—primarily driven by deforestation (SEEG 2022). However, the effort to define sustainability for land use is not new. Various national and international initiatives have sought to develop criteria applicable to this sector.[2] While some of these initiatives focus on classification and monitoring, others have the broader objective of directing finance towards sustainable production. Seeking to contribute to the construction of the Brazilian Sustainable Taxonomy, researchers from Climate Policy Initiative/Pontifical Catholic University of Rio de Janeiro (CPI/PUC-Rio) analyzed the intersections and complementarities between the main initiatives to define land use sustainability in Brazil, as well as international initiatives used as reference for the Brazilian Sustainable Taxonomy. This analysis provides an overview of the sustainability dimensions of the initiatives (environmental, climate, social, etc.), the stage of implementation, objectives, responsible actor, users, applications, type of adherence, among other relevant aspects. The work emphasizes the criteria for defining sustainable land use activities. In addition, using rural credit data, the study shows that the proportion of credit aligned with sustainability objectives varies significantly—from 1% to 44% for the 2022/23 agricultural year—depending on which classification is chosen as a reference. This report also discusses recommendations, seeking to establish priorities and identify points of attention for structuring and implementing the Brazilian Sustainable Taxonomy. CPI/PUC-Rio’s analysis highlights an urgent need to define harmonized, precise and technical criteria for the sustainability of the land use sector in Brazil. This report calls for a prioritization of efforts, looking for criteria that can be verified and monitored at scale with available data, so that the implementation of the taxonomy takes place quickly and has a greater impact. In addition, it is necessary to recognize the dynamic nature of the taxonomy, whose criteria will have to be revised and expanded over the years. However, this need for refinement and progression should not delay the definition and implementation of the taxonomy. Brazil cannot afford to put off the environmental and climate challenges it faces. As the country presiding over the G20 in 2024 and COP30 in 2025, Brazil has a unique opportunity to take a leading role in the transition to a sustainable economy. To this end, the establishment of the Brazilian Sustainable Taxonomy is a fundamental tool for directing public policy and financial flows and for preventing greenwashing. The Brazilian experience can serve as a model and reference at international level. What is a Sustainable Taxonomy? |
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Sources | CPI/Resocrces/Publication |
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