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Factors determining the price of the Decarbonization Credit (CBIO) and implications for Brazil's RenovaBio Policy

Author

Listed:
  • Marianna Henriques Ferreira Lima

    (Educación Tecnológica Celso Suckow da Fonseca)

  • Herlander Costa Alegre da Gama Afonso

    (Centro Federal de Educación Tecnológica Celso Suckow da Fonseca)

Abstract

Introduction: Global warming poses challenges for economic decarbonization, highlighting the pricing of environmental assets such as the Decarbonization Certificate (CBIO). Objective: To analyze the influence of macroeconomic and market variables oil (WTI), natural gas, dollar exchange rate (USD/BRL), VIX index, and traded volume on CBIO price formation under the RenovaBio policy. Methodology: A multiple linear regression model estimated by Ordinary Least Squares (OLS) was applied to daily time series data spanning four years. Augmented Dickey-Fuller (ADF) unit root and Engle-Granger cointegration tests were used to validate estimation in levels, along with the Breusch-Godfrey test for autocorrelation and re-estimation using Newey-West Heteroskedasticity and Autocorrelation Consistent (HAC) standard errors. Results: Oil, the dollar, and the VIX are statistically significant predictors of the CBIO price, even after correcting standard errors. Discussion: Sensitivity to external volatility and energy commodities links Brazilian decarbonization to global dynamics, limiting national autonomy in the face of external shocks. Conclusions: CBIO behaves as a financial asset sensitive to market variables, but requires regulatory mechanisms to mitigate exchange rate volatility in order to incentivize stable investments in biofuels.

Suggested Citation

  • Marianna Henriques Ferreira Lima & Herlander Costa Alegre da Gama Afonso, 2026. "Factors determining the price of the Decarbonization Credit (CBIO) and implications for Brazil's RenovaBio Policy," Revista Tendencias, Universidad de Narino, vol. 27(02), pages 174-200, July.
    • Handle: RePEc:col:000520:023327
    DOI: 10.22267/rtend.26272.301
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    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics

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