In the past few years, Brazil has experienced its worst economic recession in history, political crises, and corruption in the energy sector (especially the state company Petrobras). Now, the right-wing Jair Bolsonaro has become president of Brazil. What will be the consequences for energy, the environment, and the struggle against climate change? Maximiliano Proaño explains.
Brazil is the ninth largest economy in the world, and a serious energy power worldwide. It is the ninth oil producer of the world, the second biofuels and hydropowerproducer of the world and the eighth largest country by wind power installed capacity. Brazil’s government is heavily involved in the energy sector: it owns half of Brazil’s major electric utility Electrobras, and half of the oil company Petrobras. How will this change under Bolsonaro?
The state of renewable energy in Brazil
Renewable energy is on the rise in Brazil. In an average month – for example, June of this year – renewable energy sources represented 81.9% of the installed capacity of electricity generation in Brazil (according to data from the Ministry of Mines and Energy).
Hydropower is still by far the main source of energy in the country and represents 63.7% of all electricity generated. This is a decrease from the usual average of around 70% of the total electricity matrix, as hydroelectricity has come under increased opposition from communities and environmentalists. In addition, the production of hydroelectricity has been reduced due to the recent years of drought in the Amazon and the south of the country, and cases of corruption such as millionaire bribes in Belo Monte dam project (which has been also criticized for displacing indigenous communities). Brazil has therefore begun to import electricity from countries such as Argentina and Uruguay.
All these reasons generated consensus in the country on the need to diversify the energy matrix towards renewable energies wind energy and biomass (from sugarcane, rice husks and wood residues, among others).
In the past years Brazil has experienced an important deployment of wind and solar power. Wind energy already represented 8.1 percent of the energy produced in June 2018, while solar plants added 1 percent. Although solar energy’s development in Brazil is still incipient, it grew explosively from 80 mw in 2016 to 1097 mw of installed capacity in 2017.
The growth of wind energy was promoted through tenders as well as credits for the private sector, for around nine billion dollars, granted by the National Development Bank (BNDES) between 2003 and 2016. Solar energy has grown by means of public incentives that allow domestic users to install their own solar panels and connect to the grid, supplying electricity to the grid when there is a surplus.
Bolsonaro’s government could stop energy transition
Unfortunately, Brazil’s new president-elect Jair Bolsonaro may take the country on a different path. Due to his neoliberal stance, subsidies and incentives in renewable energies such as solar and wind power could be eliminated. Instead of that, it is possible Bolsonaro’s government policies will invest in fossil fuels.
The future of Electrobras (the public electricity utility) and Petrobras (one of the 20 largest oil companies in the world) seems uncertain under Bolsonaro. His government plan first states that the energy sector “needs a liberal shock.” However, consulted on the privatization of Electrobras, Bolsonaro said “Electric power is vital, and therefore cannot be handed over to other countries,” and he added “I’m in favor of privatizing many things in Brazil, but not in the energy sector”. Regarding Petrobras, Bolsonaro’s chief economic adviser Pablo Guedes, has spoken of the company’s total privatization; yet, Bolsonaro said in an interview in October the “core” of Petrobras should be preserved.
One of the main concerns with respect to the energy policy of Bolsonaro’s government is in environmental matters. Brazil is the sixth largest country greenhouse gas (GHG) emissions of the world. Under the Paris Agreement, the country promised to reduce its GHG emissions by 37% by 2025 in relation to 2005 emissions. The focus has been on combating deforestation in the Amazon, investing in renewable energies, and better efficiency in the agricultural sector.
Yet Bolsonaro seems to disregard environmetal protections. His government plans to lower taxes on fossil fuels, stating that: “In the formulation of energy prices, including fuels, there is a strong influence of state taxes, which will need to be reviewed among all the federative entities, in order not to overload the Brazilian consumer.” In addition, Bolsonaro has often raised the need to speed up environmental licensing processes, including for new hydroelectric plants in the Amazon region. His government plan wants to push through environmental licensing for small hydroelectric power plants, promising that they will “ensure that the licensing is evaluated within a maximum period of three months. ”
Another concern for Brazilian energy are the 3 nuclear plants it already has, and other projects that are planned. According to a report from Reuters, Oswaldo Ferreira, one of several retired generals advising Bolsonaro, said that if he were elected, the government would also complete Brazil’s corruption-plagued Angra 3 nuclear power station on the coast between Sao Paulo and Rio de Janeiro.
If the measures described throughout this article are carried out during Bolsonaro’s government, there will be both local and global consequences. The negative socio-environmental impact of this energy policy would harm indigenous communities and the poorest sectors of society. And it will be impossible for Brazil to comply with its to reduce greenhouse gases – bad news for the already uphill fight against climate change.