1. Brazil approves regulation of carbon market, focusing on sustainability and competitiveness

Congress approved the regulation of Brazil’s carbon market, taking a significant step toward reducing greenhouse gas emissions and meeting the environmental targets of the Paris Agreement. The proposal includes the establishment of a regulated market, the Brazilian Emissions Trading System (SBCE), while reinforcing the foundation of the existing voluntary market. The regulated model will be gradually implemented, allowing companies to trade carbon credits to offset emissions exceeding established limits.

The measure aims not only to mitigate the impacts of climate change but also to enhance the international competitiveness of Brazilian exports in light of initiatives such as the Carbon Border Adjustment Mechanism (CBAM), which imposes carbon taxes in the European Union. The proposal excludes the agricultural sector from reduction demands, despite it accounting for approximately 27% of national emissions, according to 2022 data. Additionally, the proposal includes safeguards for Indigenous and traditional communities, ensuring a fair distribution of resources generated from credit commercialization.

With this regulation, Brazil moves closer to aligning with global climate legislation, such as that already implemented by G20 countries. The project also solidifies the strategic role of national forests in the voluntary market, presenting an opportunity to attract investments and promote reforestation and conservation projects that are essential to combating global warming. The bill now awaits presidential approval.

Agência Câmara: Câmara aprova projeto que regulamenta o mercado de carbono no Brasil; texto segue para sanção
O Globo: Congresso aprova mercado de crédito de carbono. Sabe o que é isso? Entenda

2. G20 reaffirms commitment to sustainability, equality, and peace in final statement

At the summit held in Rio de Janeiro, the G20 reinforced key commitments, including the launch of a global alliance against hunger and poverty, joined by 82 countries. The final statement of the group underscored the urgent need for fair measures to tackle inequalities, promoting sustainable growth and energy transition. Taxation of large fortunes was identified as a strategy to fund these initiatives, while reforms in the governance of multilateral institutions were advocated to enhance effectiveness in human rights and peace efforts.

The document reaffirmed support for the Paris Agreement, initiatives for gender equality, and strengthening the United Nations, including its General Assembly and Security Council. It also condemned the use of force against state sovereignty and emphasized diplomatic solutions to conflicts such as those in Ukraine and Gaza, advocating for a comprehensive and sustainable approach to peace. The declaration, hailed as a diplomatic milestone for Brazil, reflects the priorities of its G20 presidency, focused on reducing global disparities.

CNN Brasil: G20 aprova declaração final; leia íntegra
G1: Declaração final do G20 e aliança contra fome são vitórias bem demarcadas do Brasil
Jornal do Brasil: Declaração final do G20 exalta combate à fome, taxação de super-ricos e mudanças na governança global; leia a íntegra do documento

3. Market expects Selic hike amid rising inflation

The financial market expects that the Central Bank (BC) will raise the Selic rate by 0.75 percentage points at the next Monetary Policy Committee (Copom) meeting, responding to inflation. Following this month’s 0.5-point hike, which brought the rate to 11.25% per year, economists highlight the need for a faster pace of adjustment given the continuous upward trend in inflation projections for 2024 and 2025.

While fiscal adjustment measures may ease some pressure, the economic landscape already presents sufficient signs to justify a more aggressive monetary approach. The Focus report has recorded consecutive weeks of upward revisions in IPCA projections, while the Selic forecast for 2024 has also increased, with the median now at 12% per year, up from the previously estimated 11.5%. This scenario underscores the challenges faced by the monetary authority in keeping inflation within target ranges.

Valor: Expectativa de alta de 0,75 ponto na Selic ganha força

4. Minimum wage could exceed R$ 1,520 in 2025

Brazil’s minimum wage for 2025 could reach R$ 1,521, according to projections by the Ministry of Finance based on inflation and GDP growth. The calculation considers the National Consumer Price Index (INPC) accumulated over 12 months through November, as well as the 2023 economic growth rate of 2.9%. This adjustment would represent a 7.71% increase from the current value of R$ 1,412, surpassing the initially budgeted R$ 1,509 presented to Congress.

However, the government is considering limiting the adjustment to 2.5% above inflation to manage the projected R$ 13.3 billion impact on the budget. This measure would bring the minimum wage to R$ 1,513, aligning with fiscal policy constraints. The final minimum wage will be confirmed in December after the release of the accumulated INPC through November.

G1: Salário mínimo pode chegar a R$ 1.521 em 2025, se confirmadas projeções da equipe econômica
MoneyTimes: Novas projeções do Governo para inflação indicam salário mínimo de R$ 1.524 em 2025, calcula XP

5. Inflation rises in São Paulo in November, with food prices seeing biggest hike since 2022

The Consumer Price Index (IPC) from the Fundação Instituto de Pesquisas Econômicas (FIPE) rose by 1.08% in the second forecast of November, growing from the previous increase of 1.02%. The main driver was the Food category, which saw a sharp 1.99% rise – the highest since May 2022 – fueled by significant price increases in items like meat, vegetables, and coffee. Products such as soybean oil and lower-cost meat cuts also surged, with price hikes of up to 11% over 30 days.

Other categories showed mixed behavior. Personal Expenses grew to 1.82%, while Housing, Health, and Clothing experienced a slowdown. Transportation nearly stabilized, with a slight increase of 0.02%. Within the food segment, while staples like rice and beans remained stable, products such as bread, sugar, and dairy resumed upward trends. Meat prices continued to weigh heavily on household budgets, with significant increases in beef, chicken, and pork.

The price hikes reflect market-specific pressures, including rising soybean prices and increased industrial demand for milk, but also highlight persistent challenges in controlling inflation, particularly in the food sector, which remains a significant burden for São Paulo consumers.

CNN Brasil: IPC-Fipe sobe 1,08% na 2ª quadrissemana de novembro
Folha: Alimentação sobe 2% e tem maior alta desde maio de 2022 em SP