Case Study Source: The Joint U.S.-Brazil Initiative on Urban Sustainability, part of the U.S. Environmental Protection Agency.
Bolsa Verde do Rio de Janeiro (BVRio) or the Rio de Janeiro Green Exchange is an organization created to develop and operate environmental markets in Brazil. Created in partnership with the State of Rio de Janeiro Secretariat of Environment and the Rio Municipal Finance Secretariat, BVRio aims to become the leading platform for the trading of environmental securities in Brazil. Such securities will include not only those based on existing asset classes, such as renewable energy or biomass, but also those of a regulatory nature, created for the compliance of environmental obligations, such as forest certificates, waste recovery and recycling certificates, greenhouse gas emission allowances and credits, and allowances of liquid effluents. These environmental securities will be created through multistakeholder processes involving the government, industry, and civil society. For this reason, BVRio was structured as an independent, not-for-profit partnership with membership from across different sectors (e.g., private, nongovernmental organizations and academia, and leaders in environment and sustainable finance). Each sector is represented on the BVRio Board, which is complemented by an Advisory Board that includes representatives of the three spheres of the government (municipal, state, and federal levels).
Tradable environmental securities, which may come in the form of either allowances or credits, allow for flexibility in controlling emissions or use of natural resources. BVRio will help provide the architecture that allows for the creation and trading of environmental allowances and credits while also incorporating the diverse views of government, nonprofit, community, and business actors with an interest in the outcome of emissions reductions, for example. In order to include the views of all relevant stakeholders, its membership represents different sectors of the economy and society. In addition to creating the registries and trading platforms, BVRio also works with potential market actors-buyers and sellers-to enhance their capacity in regards to environmental securities.
BVRio is designed to help develop markets such as those that the U.S. EPA created for sulfur dioxide (SO2) emissions allowance trading. This innovative, market-based system enables utilities that produce this pollutant to comply with their acid rain requirements under the Clean Air Act in the most cost-effective way. The system provides incentives for energy conservation and technology innovation that can both lower the cost of compliance and yield pollution prevention benefits.
Pedro Mouro Costa