Brazil can become a global clean energy power and save the Amazon
BRASILIA, May 4, 2023 – Brazil is in a strong position to provide its people with better lives while successfully confronting the threat of climate change, according to a new World Bank Group report released today.
According to National report on climate and development for Brazil, the country can become a global clean energy power and save the Amazon with a development plan that produces more food on less land and better protects forests. Brazil can grow its economy and combat climate change with relatively modest investments in agriculture and deforestation, the energy sector, and cities and transportation systems.
“Climate shocks could push between 800,000 and 3,000,000 Brazilians into extreme poverty by 2030. It is crucial that Brazil accelerates its investments towards a resilient, low-carbon growth path. said Johannes Zutt, World Bank Country Director for Brazil. “To realize its full potential, Brazil would need net investments equivalent to 0.8% of its annual GDP each year by 2030. The World Bank is committed to working with the Government of Brazil to achieve its development objectives while respecting climate commitments. action.”
The report highlights that Brazil is already in a strong position to source more renewable energy. Nearly half of Brazil’s energy supply, including more than 80 percent of its electricity, already comes from renewable sources, compared to a global average of between 15 and 27 percent.
Adding more clean energy would cost Brazil no more than current plans to increase fossil fuel production. Increased investment in renewable energy would lead to higher upfront costs for electricity generation, transmission and storage. But the report said those sums would be fully recouped through fuel savings and operating costs. Likewise, a shift in transport and industry towards more electrification and green hydrogen, produced with wind and solar power rather than gas, would not increase costs for the economy.
The report indicates that Brazil has a significant competitive advantage in the growing global market for greener goods and services. Its private sector is already competitive in several products needed to transition away from fossil fuels, including those related to wind turbines and parts for electric motors and generators. Brazil could enter markets for solar-related products, expand into the green hydrogen sector and take advantage of its major deposits of climate-impacting minerals.
“The private sector can and must play a central role in the transition of the Brazilian economy towards a more resilient and decarbonized economy. Private sector engagement will be crucial to, among other aspects, finance the majority of capital investment needs for climate action, thereby helping to mobilize climate finance and public spending,” said Carlos Leiria Pinto, Country Director of IFC Brazil. “But for this to happen, we need a favorable business environment and public support to attract private investors and accelerate innovation. »
The report says the Amazon rainforest is nearing a tipping point with potentially dramatic consequences for the Brazilian population in areas such as agriculture, urban water supply, flood mitigation and hydroelectricity, can be saved through a development plan that better coordinates the needs of agriculture with conservation. the forest. This plan could remove incentives to destroy the Amazon while protecting jobs and ensuring food security. Investments to boost agricultural productivity could make it more resilient and sustainable. These investments could provide technical assistance and extension services, including private sector investments, as well as rural credit program reforms and irrigation improvements.
Spending will also be needed to facilitate the transition of workers and asset owners to greener sectors, including compensation for the early retirement of carbon-emitting assets. However, according to the Brazilian CCDR, these investment needs will be largely offset by economic savings, in the form of avoided energy savings or reductions in traffic jams or air pollution.
Overall, the total economic costs of the resilient and carbon-neutral pathway proposed in Brazil’s RMTC amount to around 0.5% of GDP, without taking into account the national and global benefits resulting from avoiding the impacts of the change climate and the economic and non-economic benefits of preserving the unique environment. biodiversity and ecosystem services offered by native forests.
Main recommendations: a combination of structural reforms, economy-wide climate policies and targeted sectoral measures
The CCDR highlights one of the multiple pathways through which Brazil could leverage its position, thereby achieving greater climate resilience and net zero GHG emissions and, based on a set of actions such as:
- Meet the commitment to zero illegal deforestation by 2028 (according to the current Forest Code) – around 90 percent of current deforestation is illegal.
- Enable land management and sustainable and productive land uses (e.g. protected areas, establishment of indigenous territories and restoration of degraded pastures) and sustainable economic activities based on natural resources (e.g. ecotourism and forest plantations) to boost carbon storage, eliminating approximately 600 million tonnes of carbon dioxide equivalent (MtCO2e) per year (“negative emissions”).
- Strengthening climate-smart agriculture (agriculture that can tolerate climate change while polluting less and emitting less carbon). Priorities such as intensifying livestock production, increasing crop productivity and reducing farmers’ exposure to climate risks can at the same time halve the sector’s emissions, from 500 MtCO2e per year. year in 2020 to 250 MtCO2e per year in 2050.
- Leveraging the competitive advantages of renewable energy to become a leading producer of green hydrogenwhich can help accelerate the transition to renewable energy, particularly in transport and heavy industries, while diversifying exports and attracting investment.
- Improving energy efficiency, transition to low carbon fuels (particularly in transport and industry), increase the use of rail and waterways rather than road freight and promote greater use of public transport rather than personal vehicles.
- Use urban planning, urban management, finance and also invest in nature-based solutions (such as creating green spaces, protecting wetlands and strengthening natural protection against coastal flooding) and creating an enabling environment for green and resilient cities.
- Accelerate reforms aimed at increasing productivityincluding trade policy reform that can help Brazil integrate into global value chains beyond commodities.
- Implement economy-wide interventions, including changing incentives for private investors and consumers through tax reforms and subsidies (including carbon pricing mechanisms) in a way that benefits them and society. This will need to be accompanied by measures to help people adapt to climate change and support the transition to a low-carbon economy, such as job placement and training in new skills. Promoting such resilience and a just transition involves investments in health and education as well as relevant labor and social protection support.
About the National Climate and Development Reports (CCDR)
The World Bank Group’s Country Climate and Development Reports (CCDRs) are new core diagnostic reports that integrate climate change and development considerations. They will help countries prioritize the most effective actions that can reduce greenhouse gas (GHG) emissions and boost adaptation, while achieving broader development goals. RMTCs draw on rigorous data and research and identify key pathways to reducing GHG emissions and climate vulnerabilities, including the costs and challenges as well as the resulting benefits and opportunities. The reports suggest concrete and priority actions to support a resilient and low-carbon transition. As public documents, CCDRs aim to inform governments, citizens, the private sector and development partners and enable engagement in the development and climate agenda. The CCDRs will feed into other core Bank Group national diagnostics, engagements and operations, and help attract financing and direct financing for high-impact climate action.
Download Brazil’s National Climate and Development Report here
View previously launched reports here
