RIO DE JANEIRO, June 18 (Reuters Point Carbon) - Brazil this weekend announced targets to reduce greenhouse gas emissions in its heavy industry, transports and mining sectors, but the goals are likely to fall short of creating domestic demand for offset credits, observers said.
The government wants to cut industrial sector emissions by 5 percent below business as usual levels by 2020, mining sector emissions by 4 percent and transport by 2 percent.
But the modest targets could won't likely stimulate demand for offset credits generated by projects that reduce emissions from deforestation and degradation (REDD) in a future Brazilian carbon market.
"With those targets I don't see companies having the necessity to offset emissions. They could easily reach their reductions goals with changes on their production systems," said Plinio Ribeiro, executive director of consulting and trading company Biofilica.
"If we progress with a REDD strategy in Brazil we will run the risk of generating a lot of carbon credits that will have no demand," he said.
Brazil has pledged to keep its emissions 36 percent below projected levels by 2020, and deforestation, which accounts for over 60 percent of Brazil's total GHG output, will be key in achieving these reductions.
In documents released this weekend, the government said previously announced plans in the forest, energy and agriculture sectors could cut emissions by as much as 40 percent below expected levels in 2020, meaning it may not require the new targets published over the weekend.
Brazilian Climate Change Secretary Carlos Klink said deforestation remains the government's main focus, but said it also look for emissions reductions from energy efficiency and innovation.
The government's latest plans also require companies to be able to accurately measure and verify their emissions. (Reporting by Marcelo Teixeira)