Latin American carbon markets expand as regimes clear way

Brazil, Mexico lead way despite claims the markets help polluters.

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Cattle ranching accounts for 80% of deforestation in the Amazon, says the WWF.

(Michael Molinski is a senior economist at Trendline Economics. He’s worked for Fidelity, Charles Schwab and Wells Fargo, and previously as a foreign correspondent and editor for Bloomberg News and MarketWatch.) 

SÃO PAULO, Brazil (Callaway Climate Insights) — Latin American carbon markets are rapidly expanding as governments develop those markets and clear the way for polluters to buy carbon credits, despite criticism that companies and governments are essentially buying their way out of appearing like environmental villains.

For Brazil, the creation of carbon markets is an ingenious way to package and preserve the Amazon and make a profit from it, and turn around and sell those carbon credits to polluters such as oil giants Exxon Mobil XOM 0.00%↑ and Shell SHEL 0.00%↑. President Luiz Inácio Lula da Silva, a leftist, is leading the charge for creating the carbon markets.

The polluting companies, including Brazilian oil and mining companies, are anxious to buy those carbon credits because it reduces their carbon footprint, at least on paper.