i-see global research Brazilintel : Comment 2.

1 November 2009

Brazil at COP-15: Out in front

Having flaunted its economic durability post-crisis, Brazil now has the chance to demonstrate its
unique environmental conditions at the United Nations Climate Change Conference in Copenhagen,
further embedding the perception that it is well equipped to confront the challenges of a
rebalancing planet. How far it is prepared to go will have a significant bearing on its long-term
prosperity and global standing.
NOVEMBER 2009 • Jimmy Greer

As the world’s 4th largest emitter of greenhouse certain until the typical 11th hour negotiations,
gases (GHGs), Brazil has a key role to play in the opportunity for Brazil to emerge as a global
tackling climate change. However, compared to environmental leader is clear. Lula, who made an
other big emitters, the country diverges from its early commitment to attend the talks, will be re-
peers in the makeup of its total emissions, due to turning to the scene of his Olympics victory. This
its developed renewable energy capacity (stem- time, though not flanked by Pelé, Paulo Coelho
ming largely from hydroelectric power) and its or (bizarrely) Central Bank governor Henrique
leading standing in the production and use of Mereilles, his entourage will deliver a similar
ethanol for fuel. Approximately 75% of its to- message to the assembled nations: Brazil, acting
tal emissions comes from deforestation and land on behalf of the all too often underrepresented
use change, principally attributed to the interre- nations, is now ready to step up to the plate and
lated soy and cattle industries. deliver on its commitments to help achieve a
global deal. Provided, of course, that rich nations
This difference from the rest of world’s estab- come good on their promises as well.
lished and emerging economic centres should at-
tract to Brazil those who see rising environmen- As far off as at times it seems that a compre-
tal costs to entry as unknown barriers to moving hensive global agreement will emerge from COP-
into new markets. It will also bestow on Brazil a 15 that includes a) deep cuts in emissions from
leading role in global environmental stewardship developed nations, b) emissions targets for de-
through its conservation of the Amazon – the veloping countries, c) adequate climate change
world’s most feted source of ecosystem servic- financing commitments and d) China, India and
es. Add to this Brazil’s importance to global food the USA, a deal on forests does seem likely. This
supply and you have the makings of an environ- is in part due to the rapid and high impacts that
mental superpower. an agreement on deforestation would achieve,
added to the relatively low and uncomplicated
In spite of these traits, concerns remain that evi- delivery costs when compared to industrial up-
ronmental leadership will constrain an economy grading.
that post-crisis is taking its rightful place on the
world stage. Will it be unable to turn back the Brazil has pledged to commit to an 80% reduc-
clock on a model of generating prosperity that tion in deforestation by 2020. Currently land use
has relied on the permanent cultivation and change and deforestation is principally driven
extraction of seemingly abundant resources - by global demand for both soy (to feed cattle
which have existed since its discovery? Or, will and humans) and cattle (to feed humans). A key
the prospect of global leadership in this sphere player in the world’s food supply with 6% of its
encourage deeper environmental committments, pasture and 4.3% of its cultivable land, Brazil cur-
vital to its long-term economic wellbeing. rently supplies the world with 30% of its soy and
25% of its meat. The geographic good fortune
Chances for Copenhagen of Brazil has made these industries a no-brainer
for all involved. Spurred on by Asian economic
While the outcomes of COP-15 will remain un- development and concentrated land ownership,

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i-see global research Brazilintel : Comment 2.1 November 2009

the Brazilian soy, cattle, and to a certain extent, ferent user groups. Additionally, this kickstart to
timber industries have proven too lucrative lead- developing region specific institutional capacity,
ing to poor enforcement of environmental pro- in areas of the world characterised by weak gov-
tection and an economic vacuum in the worst ernance, cannot come soon enough.
affected regions. Lacking a regular way to make
a living and surrounded by millions of hectares Corporate Responsibility
of unpoliced, harvestable land, a resident may
be undeterred from clearing the forest even if Beyond the spheres of deforestation, cows and
he was informed that the trees provide greater other commodities, Brazil’s corporate base is
benefits to the world if left standing. keen to align itself with international standards
of corporate responsibility. Be it through emis-
REDD way forward sions measurement and reporting, greater levels
of transparency and dialogue with stakeholders,
Attempting to fill this void is a scheme called or political affiliation, Brazilian businesses have
REDD. Reducing Emissions from Deforestation made it clear that their ongoing competitiveness
and Degradation has emerged as the plan that is tied to ever improving management of their
governments want to see plug that vacuum of social and environmental impacts.
opportunities using a combination of market and
institutional mechanisms to create incentives for The Brazilian World Resources Institute GHG
forests to be worth more standing than felled. Protocol programme brought together a group
of businesses to measure and publicly report
REDD, once enshrined in a declaration at COP- their emissions for the first time this year. In-
15, will essentially put a price on conserving the cluding companies such as Petrobras, Ford Bra-
carbon contained in an area of forest. This price sil, Wal-Mart Brasil, and Whirlpool, participation
will pay for its conservation by people living in will be extended next year due to high demand
the forests, paving the way for long-term liveli- amongst the business community to properly ad-
hood generation. The broad adoption of REDD, dress this impact.
alongside stronger enforcement should lead to
a shift in behaviour in areas on the fringes of Beyond that recent initiative, the BM&F Bove-
agricultural exploration. Concerns over REDD do spa’s Corporate Sustainability Index, which has
exist, significantly around its ability to generate been in existence since 2005, has deepened en-
carbon credits. This, it is argued, will allow rich vironmental, social and governance thinking at
nations to finance their polluting industries cre- an investor level, leading to greater promimence
ating a disincentive for shifting to low carbon in- of issues in the boardroom.
frastructure.
In a more direct fashion, pressure from NGO
However, there is significant momentum behind Greenpeace, which highlighted to companies
REDD, with a number of proposals being put for- such as Nike and Timberland environmental and
ward to mitigate possible negative, unintended social issues surrounding their leather sourced
consequences. Its central tenet of transforming from Brazil, drew action from Brazilian firm JBS
forests into long-term economically viable cen- Friboi, the world’s largest ‘protein producer’. With
tres concerns reconfiguring the conception of an the capacity to process 40,000 heads of cattle
environmental resource. This must be welcomed. per day, JBS Friboi, alongside other Brazilian beef
The world faces this type of transformation on exporters, announced a number of measures to
many fronts, where environmental resources ensure they did not purchase meat of unreliable
(synonymous with depletion and extraction) provenance. This shift in attitudes - due to the in-
change their identity to become environmental escapability, and growing importance, of the NGO
services able to share their benefits across dif- spotlight on corporate behaviour (and corporate

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i-see global research Brazilintel : Comment 2.1 November 2009

earnings) - should demonstrate to Brazilian com- understands the costs of using these resources,
panies that greater transparency is a competitive in the near to medium term Brazil should emerge
advantage in an interconnected world. on the international environmental map as a
country that is responding to the challenges and
Elsewhere, the emergence of the Green Party is less exposed than others.
in Brazil drawing significant corporate support
within sight of a general election, is, for some, However, the fear of inhibiting growth by set-
reminiscent of the emergence of Greens across ting prohibitive targets will make it more difficult
Europe. Their rising prominence, in part due to for Brazil to emerge as the saviour of COP-15.
their own superstar candidate, former Workers Instead of taking a total emmissions reduction
Party environment minister Marina Silva, sends figure to Copenhagen, it is more likely that the
a clear message to mainstream political parties delegation will outline the package of measures
that the business community in Brazil want more it will adopt to reduce the impacts of significant
action on environmental issues. sectors. These measures will certainly address
some of the biggest problem areas, but the in-
New challenges defining a new era ability to set a binding target sends out a mixed
signal.
Before climate migrants and pension fund man-
agers alter their course en masse, it is necessary In a world competing for resources, grappling
to recognise that Brazil does face a laundry list of with the cost of environmental upgrading and
environmental challenges that impact on the dai- adapting to a new understanding of the value
ly lives of its citizens rich and poor – but mainly of ecosystem services, Brazil is set to become a
poor. Most of the rural population were herded to dominant voice. However, for all the perceived
the cities by decades old industrial development success in Copenhagen, every step away from
policies that began under the dictatorships dur- tough commitments weakens the country’s posi-
ing Brazil’s last economic miracle. This migration tion at a national and international level. Short-
pattern has not relented, with urban environ- term externalities associated with setting binding
ments in need of urgent investment. Basic sani- targets shold not be confused with driving for-
tation coverage is not widespread, air pollution ward a model of economic development that is
is a growing concern and large scale floodingis responsive to new environmental realities.©
a regular occurrence. Brazil’s infrastructure defi- To receive the Brazilintel Comment series free of
ciencies and most recent growth spurt have also charge email news@i-seeglobal.com
contributed to rises in emissions from the trans- inserting ‘Brazilintel Comment’ in the subject line.
port and industrial sectors.
Forthcoming analysis to include:
• Review of Brazilian corporate sustainability land-
In all these instances, Brazil is no different to
scape
other countries undergoing big transformations.
• Snapshot of the ‘infamous Brazilian shopper’
The world has plenty of environmental problems
to learn to live with, intimately tied to the way Previous Comment piece explored the significance of
resources are consumed to produce prosperity. Brazil winning the Olympic Games:
As the US and Europe try and find the will and • Rio2016: more than a coming out party?
capital to shift to low carbon economies, China,
India and Brazil - as most of the developing world Brazilintel is part of i-see global, a consultancy spe-
- face daily environmental challenges alongside cialising in integrated social, economic and environ-
the issues associated with becoming low carbon mental thinking for a rebalancing world.
and remaining high growth.
To find out more contact Jimmy Greer:
While the shift will occur over time that better e: jimmygreer@i-seeglobal.com
or visit: http://i-seeglobal.com

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