Brazil: Country Climate and Development Report (EN/PT/ES) – Brazil


Brazil could be richer and greener: The World Bank Group identifies opportunities for climate action and growth

Brazil could become a global clean energy powerhouse and save the Amazon

A new World Bank Group report released today says Brazil is in a strong position to give its people a better life while also successfully confronting the threat of climate change.

According to Brazil’s Climate and Development Report, the country can become a global clean energy powerhouse and save the Amazon with a development plan that grows more food on less land and better protects forests. Brazil can grow its economy and combat climate change with relatively modest investments in agriculture, deforestation, the energy sector, cities, and transportation systems.

“Climate shocks could push between 800,000 and 3,000,000 Brazilians into extreme poverty by 2030,” said Johannes Zott, World Bank Country Director for Brazil. “It is critical that Brazil accelerate its investments towards a resilient, low-carbon growth path.” “To fully realize its potential, Brazil will need to invest a net investment of 0.8 percent of its annual GDP each year between now and 2030. The World Bank is committed to working with the Government of Brazil to achieve its development goals while achieving its climate goals as it does.”

The report highlights that Brazil is already in a strong position to provide more renewable energy. Nearly half of Brazil’s energy supply, including more than 80 percent of its electricity, already comes from renewables, compared to global averages of between 15 and 27 percent.

Adding more clean energy would be no more costly to Brazil than current plans to expand fossil fuel generation. More investment in renewables will have higher upfront costs for power generation, transmission and storage. But the report says this will be fully offset by savings in fuel and operational costs. Likewise, a transition in transportation and industry to more electricity and green hydrogen, which is produced using wind and solar energy instead of gas, will not increase costs for the economy.

The report says Brazil has a significant competitive advantage in the growing global market for greener goods and services. Its private sector is already competitive in many of the products required to move away from fossil fuels, including those related to wind turbines and parts for electric motors and generators. Brazil could enter the markets for solar energy products, expand in green hydrogen, and tap into its major deposits of climate-relevant minerals.

“The private sector can and should play a central role in the Brazilian economy’s transition towards a more resilient and decarbonized economy. Private sector participation will be crucial, among other aspects, to finance the majority of the country’s needs,” said Carlos Leiria Pinto, IFC’s Country Director for Brazil. Capital investments for climate action, helping to boost climate finance and public spending.” “But for that to happen, we need a conducive business environment and public support to attract private investors and accelerate innovation.”

The report says the Amazon rainforest, which is approaching a tipping point with potentially dire consequences for the people of Brazil in areas such as agriculture, urban water supply, flood mitigation, and hydropower, could be saved through a development plan that better coordinates agriculture needs 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 can make it more resilient and sustainable. These investments can provide technical assistance and extension services, including investments from the private sector, as well as rural credit program reforms and irrigation improvements.

Spending will also be needed to ease the transition of workers and asset owners to greener sectors, including compensation for early retirement of carbon-emitting assets. However, according to Brazil’s CCDR, these investment needs will be largely offset by economic savings, in the form of avoiding energy spending or reducing congestion or air pollution.

Overall, the total economic costs of the flexible and net-zero path proposed in the DRR in Brazil are about 0.5 percent of GDP, not counting the domestic and global benefits from avoided climate change impacts and the economic and non-economic benefits from preserving the unique impact. . Biodiversity and ecosystem services provided by native forests.

Key Recommendations: A set of structural reforms, climate policies at the economy level, and targeted sectoral measures

The CCDR highlights one of several paths through which Brazil can take advantage of its location, thereby achieving greater resilience to climate change and net-zero greenhouse gas emissions, based on a combination of actions such as:

Fulfill the pledge not to deforestation illegally by 2028 (according to current forest law) – About 90 percent of deforestation today is illegal.

Enabling land stewardship, sustainable and productive land uses (eg protected areas, creation of indigenous lands, restoration of degraded rangelands) and sustainable economic activities based on natural resources (eg ecotourism and forest plantations) to enhance carbon storage, removing an estimated 600 million tonnes of carbon dioxide equivalent (MtCO2e) per year (“negative emissions”).

Promoting climate-smart agriculture (farming that can tolerate changes in weather while reducing pollution and reducing carbon emissions). Priorities such as intensifying livestock production, increasing crop productivity and reducing farmers’ vulnerability to climate risks could simultaneously cut the sector’s emissions by half, from 500 MtCO2e per year in 2020 to 250 MtCO2e per year in 2050.

Take advantage of competitive advantages in renewable energy to become a leading producer of green hydrogen, which can help accelerate the transition to renewable energy, especially in transportation and heavy industries, while diversifying exports and attracting investment.

Improving energy efficiency, moving to lower carbon fuels (particularly in transportation and industry), increasing the use of rail and waterways in place of road freight, and encouraging greater use of public transportation rather than personal vehicles. Leveraging urban planning, urban management, and finance, as well as investing in nature-based solutions (such as creating green spaces, protecting wetlands, and enhancing natural coastal flood protection) and creating an enabling environment for green and resilient cities.

Accelerate productivity-enhancing reforms, including trade policy reform that can help Brazil integrate with global value chains that go beyond commodities.

Implement economy-wide interventions, including changing incentives for private investors and consumers through tax and subsidy reforms (including carbon pricing mechanisms) in a way that benefits them and society. This must be accompanied by measures to help people adapt to a changing climate and support the transition to a low-carbon economy, such as employment and training in new skills. Promoting this resilience and just transition includes investments in health and education as well as employment support and related social protection.

About Country Climate and Development Reports (CCDRs)

The World Bank Group’s Climate and Country Development Reports are new core diagnostic reports that integrate climate change and development considerations. It will help countries prioritize the most impactful actions that can reduce greenhouse gas (GHG) emissions and enhance adaptation, while achieving broader development goals. Disaster Security Reports is based on rigorous data and research and identifies key pathways to reducing greenhouse gas emissions and climate vulnerabilities, including the costs and challenges as well as the benefits and opportunities of doing so. The reports suggest concrete and priority actions to support a resilient, low-carbon transition. As public documents, CCDRs aim to inform governments, citizens, the private sector and development partners and enable participation in the development and climate agenda. Central Bank Credit Reports will support the Bank Group’s other core diagnostics, country engagements and operations, and help attract financing and direct funding for high-impact climate action.

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