Brazil at a Climate Crossroads: Proposals from Entities Converge on Forests, Finance, and Adaptation, but Diverge on the Future of Oil.
The presidential race in Brazil is gaining a new dimension with the delivery of detailed roadmaps for the climate transition. Various sectors of the economy and civil society have joined forces to present candidates with proposals that go beyond targets and demand concrete results for the 2027 to 2031 cycle.
These initiatives place the climate agenda at the center of Brazil’s economic development and competitiveness strategy, highlighting a growing understanding that a sustainable future is also a prosperous one.
The relevance of these proposals is underscored by the increasing perception that the climate crisis is already directly impacting the lives and finances of Brazilians. Rising electricity bills due to droughts, food inflation, and the frequency of natural disasters in recent years serve as an undeniable warning.
A Comprehensive Look at the Proposals
Four major organizations – the Brazilian Business Council for Sustainable Development (CEBDS), the Brazil Climate, Forests, and Agriculture Coalition, the Talanoa Institute, and the Climate Observatory (OC) – have analyzed and presented their visions.
Despite representing diverse interests, there is a notable convergence on seven crucial areas:
- Commitment to zero deforestation and full implementation of the Forest Code.
- Transition to low-carbon agriculture.
- Implementation of socio-environmental traceability in production chains.
- Advancement in climate finance, focusing on the carbon market and sustainable taxonomy.
- Promotion of the bioeconomy and the restoration economy.
- Ensuring a just energy transition.
- Adaptation, disaster prevention, and crucial water security.
It is imperative that the energy and climate transition be viewed not merely as a technological or market shift, but as a comprehensive social, economic, and political process. It must be directed towards correcting historical inequalities, promoting social inclusion, and combating environmental racism.
The pillars of a just transition include the creation of decent, green jobs, the guarantee of land rights, the fight against energy poverty, and the promotion of inclusive mobility for all.
Forests and Agribusiness: Non-Negotiable Pillars
The protection of Brazil’s biomes and land regularization are unanimously considered non-negotiable. For the organizations, these are the cornerstones for economic stability, rural security, and Brazil’s global image.
Agribusiness, despite being the sector with the highest greenhouse gas (GHG) emissions in the country, is also recognized as a primary source of opportunities for mitigation and boosting economic competitiveness.
There is a consensus on the need to accelerate the analysis of Rural Environmental Registrations (CAR) and the execution of Environmental Regularization Programs (PRA). The regularization of rural properties is seen as a decisive step to unlock new investments.
The proposals suggest conditioning access to financing lines, such as the Safra Plan and the ABC+ Plan, on compliance with the Forest Code and the demonstration of sustainable metrics, offering differentiated interest rates for environmentally responsible producers.
Transparent traceability systems, from farm to consumer, covering products like meat, grains, and minerals, are considered a competitive advantage. They ensure access to increasingly demanding global markets and protect Brazilian exports.
The Brazil Coalition stated:
In an increasingly rigorous international scenario, marked by requirements like the European Union Deforestation Regulation (EUDR), traceability is no longer just a regulatory agenda but a competitive differentiator.
The Talanoa Institute, in turn, proposes financial incentives, such as rural credit with interest rate discounts, for producers who adopt efficient irrigation technologies combined with no-till farming and Crop-Livestock-Forestry Integration (ILPF).
Oil: The Point of Divergence in the Energy Transition
The proposals reveal notable divergences regarding the energy transition, specifically concerning the future of oil. The Climate Observatory and the Talanoa Institute advocate for a more accelerated transition away from fossil fuels.
Their measures include ending new oil exploration auctions, a total ban on fracking, eliminating fossil fuel subsidies, and phasing out coal this decade. Both organizations also reject carbon capture and storage (CCS) technologies.
These entities propose a reorientation of Petrobras‘s business model towards decarbonization. The Climate Observatory suggests limiting oil exploration to existing fields and preventing the opening of new fronts in sensitive areas such as the Equatorial Margin and the Pelotas Basin.
Talanoa proposes that the next President of the Republic appoint a leader for Petrobras committed to transforming the company’s business model towards a just energy transition with clear indicators of progress.
In contrast, CEBDS and the Brazil Coalition advocate for a more gradual energy transition, focusing on the expansion of biofuels and green hydrogen, without explicitly calling for an end to new oil frontier exploration by Petrobras.
Climate Finance: A Crucial Point
An undeniable point of convergence is that the transition to a low-carbon economy requires robust financing. There is a consensus on the need for regulation and operation of the Brazilian Emissions Trading System (SBCE).
CEBDS stated:
Eco Invest and the consolidation of sustainable finance complete this architecture, offering regulatory predictability and attracting capital to Brazil.
However, the ‘how’ of financing presents nuances. While CEBDS and the Brazil Coalition prioritize market mechanisms, the OC and Talanoa argue that the private market is insufficient to serve more vulnerable municipalities.
They advocate for allocating non-reimbursable funds for adaptation, disaster prevention, and climate justice. The OC highlights that, although the Climate Fund has a significant budget, the non-reimbursable portion is insufficient to serve approximately 1,500 municipalities.
Water: The Essence of Climate Adaptation
The entities reinforce the importance of climate adaptation, with a special focus on water security. Water availability is vital for food production, energy generation, and infrastructure.
CEBDS focuses its proposals on water reuse and the creation of a national regulatory framework for the use of treated wastewater in industry and agriculture. The Brazil Climate Coalition advocates for Payments for Environmental Services (PSA).
Talanoa warns of the vulnerability of electricity generation to extreme droughts, proposing modernization of the grid and rapid response mechanisms. The OC argues that, during drought periods, human consumption and animal watering should be prioritized.
These proposals offer a complex panorama of the challenges Brazil faces. How presidential candidates address these roadmaps will determine the country’s economic and social trajectory in the coming decades.
