Low Carbon Growth in Brazil

June 17, 2010

BRASILIA, June 17th, 2010 — Brazil could reduce its gross greenhouse gas emissions (GHG) by up to 37 percent between 2010 and 2030, while at the same time maintaining the development goals set out by the government for that period, without negatively affecting growth or jobs, says a new World Bank study of low carbon development scenarios in Brazil. This would be the equivalent of taking all of the world’s cars out of circulation for three years. The study was launched today, in Brazil’s capital Brasilia, during a seminar attended by several ministries and research centers.

“Brazil is one of the leading nations at climate negotiations, it has one of the cleanest energy matrixes and is offering creative and constructive solutions both at the global and national levels, as is demonstrated by our voluntary commitment to reduce emissions by between 36.1% and 38.9% by 2020,” said Izabella Teixeira, Environment Minister. “This study joins a list of others proving Brazil’s potential. However, our 2005 emissions represented barely 6.6% of total global emissions. The developed world is responsible for the largest share, and needs to contribute directly and proportionally to the solution of this problem.”

The Brazil Low Carbon Study, indicates that the country has a great opportunity to mitigate and reduce emissions, mainly in areas such as changes in land use (like agriculture and deforestation), energy, transportation and waste management. In each of those areas, the study identifies opportunities to reduce emissions that would have no impact on economic development. The efficiency of those activities is measured against a reference scenario, tracing the current path into the future while incorporating different development levels. Reaching that low carbon scenario would require additional investments of around US$ 400 billion over twenty years.

According to World Bank Director for Brazil Makhtar Diop, “certainly, consolidating this emission reduction scenario is a great challenge in terms of planning and financing. However, the Brazilian economy would be positively affected. Results show a boost in annual GDP growth and job creation. Taking everything into account, doing nothing would be more costly —both in terms of the national as well as the global impact, and the need to adapt to climate change.”

Approximately 40% of Brazil’s gross carbon emissions come from deforestation, even though recent efforts from the government to protect forests have significantly contained that number in the last few years. Together with agriculture and livestock raising, 75% of Brazilian emissions derive from changes in land use.

“Avoiding deforestation is by far the best option to reduce GHG emissions in Brazil,” said Christophe de Gouvello, report coordinator. “The Brazilian government has been fighting deforestation through forest protection policies and programs, but it also has the opportunity to use other instruments — such as increasing the use of pastures and reintegrating degraded areas to the production cycle, avoiding encroachment on new areas.”

According to the study’s estimates, a new land use dynamic in Brazil would reduce deforestation by up to 68% by 2030, compared to the reference scenario estimated for that same year. According to the report, market mechanisms would not be enough to take advantage of all the opportunities Brazil has to mitigate emissions. Public policies and planning are essential, especially with regards to managing land competition and forest protection.

In the energy sector, given that emissions in Brazil are already relatively low due to its renewable matrix, opportunities for reduction are lower. It is estimated that the share of that sector’s emissions will continue to grow along with the economy, and may reach more than a quarter of the country’s total emissions by 2030. Therefore, even if the actions suggested for a low carbon scenario are carried out, such as increasing ethanol exports, achieving energy efficiency in industry and regional integration, emissions would still be approximately 28 percent higher in 2030 than 2008.

As with energy, the Brazilian transportation sector is mentioned in the report as a low-carbon-intensity sector in comparison to other countries, due to the widespread use of ethanol. Nevertheless, the fossil fuels used in transportation accounted for 12 percent of all CO2 emissions in 2008. Public transportation policies in cities and multimodal distribution for regional transportation could reduce emissions by 26 percent and 9 percent, respectively, by 2030. Combining these with an increased use of ethanol could possibly double these reductions. Implementing this low carbon scenario for the transportation sector would mean lowering the rate of emission increases attributed to the sector, from almost 65 percent to less than 17 percent by 2030.

With respect to waste management, which accounts for the lowest share of Brazilian emissions, 4.7 percent in 2008, the report recommends the systematic burning of methane, better planning, more investment and incentives to manage landfills and other collection and processing services. The implementation of adequate policies could reduce sector emissions by up to 80 percent by 2030, a volume comparable to Paraguay’s entire emissions.

“The sum of all the necessary investments for each sector and the collateral effects on the rest of the economy would counterbalance the potential negative effects and even promote growth and job creation. As an investment, the low carbon scenario generates profits in three ways: economic growth, long term environmental sustainability and global benefits,” Diop added.

The Brazil Low Carbon Study is part of a series of analytical works on low carbon development scenarios for several countries. The World Bank recently published the Global Development Report on Climate Change and the Latin America and the Caribbean Report on Low Carbon Development.

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