Major Brazilian stakeholders are opposing new regulation changes to safeguard global carbon markets from double counting, and old credits. The concern is that credits from an old government regime could undermine the Paris climate agreement.
A new proposal, the Sustainable Development Mechanism (SDM), SDM would replace the Clean Development Mechanism (CDM) set up under the Kyoto Protocol. Brazil, India and China, who together hold the most credits, insist they must be able to bring forward old CDM credits into the new SDM market. This allows countries who make additional emission reductions beyond their climate pledges to sell these as offsets to other companies or countries. Brazil has led the resistance toward tougher restrictions.
No final decisions on the transition have been made at this time as negotiations ended in a stalemate during the UN climate meeting this month in San Jose, Costa Rica.