The Forestry Code was instrumental in reducing deforestation rates. Deforestation although still not entirely sustainable has prevented the loss of a large amount of the Amazon forest. The proposal responds solely to the interests of the more traditional sector of the Brazilian agribusiness. Its main effect, if turned into law, would be to pardon illegal practices that led to deforestation and destruction of riparian vegetation that caused the erosion of river beds and drying of water sources. I’ve been to areas of soybean plantation where producers are desperate about water scarcity brought about by land clearing that destroyed all the previous vegetation, including the riverine, to increase agricultural area. Now rivers and sources are drying, and they’re left with no water for irrigation. In the future they’ll leave the land bare, and look for new areas to occupy pushing deforestation further into the Amazon and the savanna fields (Cerrado).

If approved, the proposal would do harm not only to the environment, but to the economic sustainability of competitive agricultural production in many areas. It benefits a traditional  mode of production that destroys the vegetal riparian protection of river banks and water sources; clears the vegetation that prevents landslides on steep hillsides; disregards the legal reserve of primary forest as a means to protect biodiversity. It is detrimental to a contemporary and competitive agricultural commodity business.

Large global buyers are banning all grain, beef and leather coming from land illegally cleared, or produced with the use of forced labor from their supply chains. In the Brazilian domestic market large retailers such as Walmart, Pão de Açúcar and Carrefour are also banning beef coming from areas of deforestation from their shelves. Major Brazilian exporters of leather goods will soon be forced to do the same.

The bill goes to the extreme of giving fiscal benefits to those who have illegally cleared their land and disrespected rules for the protection of riparian vegetation and primary biodiversity. Farmers who have obeyed all rules and paid a price for being legal will now see those who have thrived in illegality getting subsidized long-term finance to abide by far less demanding rules. Rules that will lead to the resumption of deforestation and destruction of river courses.

How can that happen? An alliance between a communist and the more conservative forces of the right linked to traditional rural practices of production and domination? How come the successors of the Brazilian latifundia can find political help from a supposedly left wing politician? How can a government led by a president who came from the progressive metalworkers union movement, leader of a labor-oriented party let such a bill follow its course unhindered? The government leadership is taking no action either to block or to modify a proposal that contradicts current government policies. It would, among other things, prevent the government from meeting the deforestation targets it has registered under the Copenhagen Accord. Several representatives of the Social-democrat opposition are also supporting the proposal or have adopted an attitude of benign neglect.

The Brazilian political system has some very specific features that help to explain such apparently surreal outcomes. Features that are hard to explain to foreign audiences.

Brazil has a presidential political system in which the President depends on a multiparty coalition to govern. I called it a ‘coalition presidential system’ a long time ago. It explains why president Lula is so uninterested on the fate of the Forestry Code. He has many traditional rural business sectors in his coalition that have a direct interest in changing the Code for their own benefit. The majority of the progressive forces in his coalition are not really interested in what happens to the distant Amazon region or the rich savanna fields of the Brazilian midwest.

Brazilian parties are two-headed entities, with a “national head” focused on presidential coalition politics, and a “regional head” focused on state and local politics. The Forestry Code is far more about regional and local interests than it is about general, strategic national issues. And this is also a measure of the little importance environmental issues have in the national political agenda. There is no place in the Brazilian party system for ideology or policy-oriented behavior. Parties are machines finely tuned to grabbing power and controlling the largest possible share of the national budget. All political dealings are led by the convenience of personalities, factions and their allies. Paramount among allies are business sectors that can provide resources to parties’ and politicians’ campaign finance; labor organizations that can provide loyal vote clusters; and organized sectoral lobbies controlling either money or vote pools.

Ideologies in this system are so fuzzy that ultra-right and ultra-left nationalists can easily coalesce to fight what they see as the perils of globalization. Retrograde business groups and opportunistic politicians who identify themselves as “progressive”, “communist”, or “socialist” can easily find common ground to justify their alliance. Ideological identifications are today no more than meaningless labels. That’s how a “communist” can staunchly defend the interests of landowners. Among the landowners to be benefitted there may be several who have had illegal or illegitimate access to land either by directly appropriating public land, or buying illegally grabbed land with fraudulent property documentation. Some of them are being prosecuted for the use of forced labor in their farms. The proposed version of the bill does not make any clear distinction between legitimate owners of legal land and land-grabbers.

The bill is presently at the stage of House committees review. After being voted at the House floor it has to be reviewed by the Senate. As we are approaching the campaign for general elections, including a presidential election, it is unlikely the bill could become law this year, under normal circumstances. Here lie the hopes of those who want to defend Brazilian forests and rivers: to obstruct the decision-making process and wait for the new correlation of forces that will come out of the elections. Seat turnover is likely to be very high this year: 100% of House seats and two thirds of the Senate seats are up for the grabs. Safe seats will be no more than 30% in the House. In other words only around 30% of the House are likely to get reelected. At least 60% of the Senate seats will change hands, a turnover of around 40%. Newcomers to the House can be as much as 50% of the total. We should also include in the renewal at least another 20% or 30% of seats that will likely be gained by former House members that did not run at the previous election or failed to get elected.

With the possibility of a power shift at the Presidency and a substantial change in party seat share in the Congress, the best strategy for those who oppose these changes to the Forestry Code should be to prevent the bill from being voted this year. The issues addressed by the bill will certainly be debated during the campaign and different points of view will become better known to the public. This would the best way to deal with the complexities and idiosyncrasies of the Brazilian political system.

The proposal responds solely to the interests of the more traditional sector of the Brazilian agribusiness. Its main effect, if turned into law, would be to pardon illegal practices that led to deforestation and destruction of riparian vegetation that caused the erosion of river beds and drying of water sources. I’ve been to areas of soybean plantation where producers are desperate about water scarcity brought about by land clearing that destroyed all the previous vegetation, including the riverine, to increase agricultural area. Now rivers and sources are drying, and they’re left with no water for irrigation. In the future they’ll leave the land bare, and look for new areas to occupy pushing deforestation further into the Amazon and the savanna fields (Cerrado).

The proposal does harm not only to the environment, but to the economic sustainability of competitive agricultural production in many areas. This mode of production destroys the vegetal riparian protection of river banks and water sources; clears the vegetation that prevents landslides on steep hillsides; disregards the legal reserve of primary forest as a means to protect biodiversity. It is detrimental to a contemporary and competitive agricultural commodity business. Large global buyers are banning all grain beef and leather coming from land illegally cleared, or produced with the use of forced labor from their supply chains. In the Brazilian domestic market large chains such as Walmart, Pão de Açúcar and Carrefour are also banning beef coming from areas of deforestation from their shelves. Major Brazilian exporters of leather goods will soon be forced to do the same.

The proposal goes to the extreme of giving fiscal benefits to those who have illegally cleared their land and disrespected rules for the protection of riparian vegetation and primary biodiversity. Farmers who have obeyed all rules and paid a price for being legal will now see those who have thrived in illegality getting subsidized long-term finance to abide by far less demanding rules. Rules that will lead to the resumption of deforestation and destruction of river courses.

How can that happen? An alliance between a communist and the more conservative forces of the right linked to traditional rural practices of production and domination? How come the successors of the Brazilian latifundia can find political help from a supposedly left wing politician? How can a government led by a president who came from the progressive metalworkers union movement, leader of a labor-oriented party let such a bill follow its course unhindered? The government leadership is taking no action either to block or to modify a proposal that runs against current government policies. It will, among other things, prevent the government from meeting the deforestation targets it has registered under the Copenhagen Accord. Several representatives of the Social-democrat opposition are also supporting the proposal or have adopted an attitude of benign neglect.

The Brazilian political system has some very specific features that help to explain such apparently surreal outcomes. Features that are hard to explain to foreign audiences.

Brazil has a presidential political system in which the President depends on a multiparty coalition to govern. I called it a ‘coalition presidential system’ a long time ago. It explains why president Lula is so uninterested on the fate of the Forestry Code. He has many traditional rural business sectors in his coalition that have a direct interest in changing the Code for their own benefit. The majority of the progressive forces in his coalition are not really interested in what happens to the distant Amazon region or the rich savanna fields of the Brazilian midwest.

Brazilian parties are two-headed entities, with a “national head” focused on presidential coalition politics, and a “regional head” focused on state and local politics. The Forestry Code is far more about regional and local interests than it is about general, strategic national issues. And this is also a measure of the little importance environmental issues have in the national political agenda. There is no place in the Brazilian party system for ideology or policy-oriented behavior. Parties are machines finely tuned to grabbing power offices and getting a fair share of the national budget. All political dealings are led by the convenience of personalities, factions and their allies. Paramount among allies are business sectors that can provide resources to parties’ and politicians’ campaign finance; labor organizations that can provide loyal vote clusters; and organized sectoral lobbies controlling either money or vote pools.

Ideologies in this system are so fuzzy that ultra-right and ultra-left nationalists can easily coalesce to fight what they see as the perils of globalization. Retrograde business groups and opportunistic politicians who identify themselves as “progressive”, “communist”, or “socialist” can easily find common ground to justify their alliance. Ideological identifications are today no more than meaningless labels. That’s how a “communist” can staunchly defend the interests of landowners. Among the landowners to be benefitted there may be several who have had illegal or illegitimate access to land either by directly appropriating public land, or buying illegally grabbed land with fraudulent property documentation. Some of them are being prosecuted for the use of forced labor in their farms. The proposed version of the bill does not make any clear distinction between legitimate owners of legal land and land-grabbers.

The proposal is presently under discussion by the House at the committee level. After being voted at the House floor it has to be reviewed by the Senate. As we are approaching the campaign for general elections, including a presidential election, it is unlikely the bill could become law this year, unless President Lula tells his leaders in Congress to give it urgency status. Here lies the hopes of those who want to defend Brazilian forests and rivers: to obstruct the decision-making process and wait for the new correlation of forcers that will come out of the elections. Seat turnover is likely to be very high this year: 100% of House seats and two thirds of the Senate seats are up for the grabs. Safe seats will be no more than 30% in the House. In other words only around 30% of the House are likely to get reelected. At least 60% of the Senate seats will change hands, a turnover of around 40%. Newcomers to the House can be as much as 50% of the total. We should also include in the renewal at least another 20% or 30% of seats that will likely be gained by former House members that did not run at the previous election or failed to get elected.

With the possibility of a power shift at the Presidency and a substantial change in party seat share in the Congress, the best strategy for those who oppose these changes to the Forestry Code should be to prevent the bill from being voted this year. The issues addressed by the bill will certainly be debated during the campaign and different points of view will become better known to the public. This should be the best way to deal with the complexities and idiosyncrasies of the Brazilian political system.

The Brazilian agribusiness is at a crossroads. After a success story it is now running the risk of loosing quality markets due to bad social and environmental practices.Brazil has become the largest market for about a dozen of pesticides that have been banned in the U.S. and the European Union because they are hazardous to human health. One of the largest Brazilian newspapers, the Estado de São Paulo, has a story (Port) showing that producers are using large amounts of these pesticides. It also shows that the Federal regulatory agency, Anvisa, is delaying a ban on these products responding to pressure from politicians and producers. Brazil has, for instance, imported 1.84 thousand tons, in 2008, and 2.37 thousand tons, in 2009, of Endosulfan, an organochlorine chemical that has been banned because of its acute toxicity, potential for bioaccumulation, and role as an endocrine disruptor.

The Brazilian agricultural industry has a story of success and spectacular growth over the last twenty years. Brazilian agricultural export commodities are more technologically advanced than locally manufactured goods. But the progress on animal and plant genetics, as well as several other technological gains were not accompanied by comparable advances in sustainability and corporate social responsibility. The Brazilian agribusiness is a major vector of deforestation in the Amazon, the savannah (Cerrado) and the Atlantic rainforest. The Federal labor authorities, the Federal Prosecutors, and the Federal Police have detected a large number of cases of forced labor in several Brazilian farms and ranches. Several large exporting companies fail to manage their supply chain, buying products originating from illegally grabbed and cleared land.

Tolerance to bad environmental and labor practices leads to a generalized view that Brazilian commodities are of low social and environmental quality. There are, however, producers that do adopt good sustainability practices. But, as there is no segregation between commodities produced according to the best practices and the rest, the good are mixed with the bad. All one can see is the ugly face of the business.

Some segments of the industry have only adopted better practices after facing concrete threats to their exports. Amazon soybean exports were such a case. The major trading companies were forced by their larger consumers to adhere to a moratorium on soy produced on deforested areas. Greenpeace targeted larger Brazilian soy consumers, such as McDonalds, to persuade them to stop buying Amazon soybean. The threat of a ban on Amazon soy led the trading companies to adopt better supply chain management practices, and to commit to the moratorium. This has effectively reduced the contribution of soybean production to Amazon deforestation.

The Brazilian beef wholesalers and slaughterhouses have not yet learned the lesson though. In spite of having committed to steps to ensure that the meat they sell does not contribute to further deforestation, most of them have failed to control their supply chain as promised.

It was also a report from Greenpeace, Slaughtering the Amazon, that triggered the decision of large supermarket chains like Walmart, Carrefour, and Pão de Açúcar to suspend contracts with suppliers found to be involved in Amazon deforestation. Leading shoemakers, including Timberland, Nike, Adidas, and Clarks have also decided to bar leather producers associated with Amazon deforestation from their supply chain.

A few days ago, the Brazilian government, in consultation with U.S. Federal authorities, has just suspended all shipments of beef to the United States, after the U.S. authorities recalled 40 tons of corned beef from large wholesaler JBS Friboi. Samples of the corned beef showed an amount of the antiparasitic Ivermectin exceeding the tolerance level established by the U.S. Food and Drug Administration (FDA).

JBS is one of the signatories of the beef accord, and has failed so far to trace the beef it sells along the supply chain, to ensure it is not contributing to Amazon deforestation. The Brazilian Development Bank, BNDES, has provided generously subsidized finance to its activities, although it obviously fails to meet minimum sustainability requirements.

The Brazilian cattle industry has been a technological and commercial success case. Brazil has become the largest world beef exporter over the last decade, winning over major competitors such as Australia, New Zealand and Canada. Brazilian commodity exports have been the decisive factor behind the country’s trade balance surplus. The trade balance for the manufacturing industry displays a large deficit, while the balance for agriculture shows a significant surplus.

But this story of technical and business success has also its dark side. The Brazilian Agricultural elite responds to the interests of the median producer. They refuse to advocate the adoption of best practices of production and supply chain management as an industry wide strategy. On the contrary, they are trying, for instance, to change the Brazilian Forestry Code to reduce the area of forest protection, and to open the way to further deforestation in the Amazon. They have also lobbied the Federal regulatory agency, Anvisa, to delay the ban on acutely toxic pesticides. Now they justify overusing toxic products because it is not forbidden by the government.

The head of the major agricultural trade organization has openly attacked rules to enforce labor rights, health and safety. By doing so the Agribusiness trade associations are defending the worst practices, rather than working together with farmers and ranchers to raise the bar on product quality, sustainability and CSR practices, as tools to enlarge their markets and profitability.

The labor rules that have been described as excessively bureaucratic, burdensome, and costly by the Agribusiness leadership are simply elementary rules of civilized business practice as the O Globo columnist, Miriam Leitão has showed recently:

“Overall 3o thousand workers were found working in conditions analogous to forced labor in the farms inspected [by the Federal authorities].”

What are these unbearable rules criticized by the Agribusiness elite?

“The company has to provide drinking water to workers. This is one of the 252 rules the Labor Ministry has issued regarding farming practices. Why did the authorities consider it necessary to mandate such an obvious behavior? Because they found workers in 451 farms working without an adequate source of drinking water, between 2003 and 2008. (…)

Other examples of basic humane rules that are often disregarded by employers: housing facilities should provide bathrooms; before each meal workers should have where to wash their hands; housing units should be separated by gender; family housing cannot be collective; a worker shall not pay for the tools or the safety equipment he uses; if there is an accident the worker has to get immediate first aid care. (…) The reports from the monitoring groups who visited near 1,800 farms, since 2003 show that what should be normal labor practice on a civilized society is frequently ignored in several rural properties”. (Miriam Leitão, on her column Against the facts).

I’ve been to a soybean farm area in the savannas (Cerrado) of the state of Minas Gerais, where farmers are desperate about the lack of water. The Brazilian Savannah is a source of water. Water is usually abundant there. Why is it now lacking? Because of deforestation and the devastation of the riparian vegetation. Water sources were not protected. Farmers have also polluted and provoked the erosion of riverbeds and overused water on badly specified irrigation projects. Now they’re trying to get legislation to transform protected neighboring areas into farmland, to have access to the abundant and clear water, as well as to the fertile land of the reserves.

Brazilian export agriculture is threading a very dangerous path. The very short-term gain obtained through unsustainable practice may soon turn into an economic and commercial disaster. The political attitude of its leaders induces the worst practices in the industry, instead of encouraging the adoption of best practices as part of overall business strategy. One that might ensure its sustained competitiveness in global markets.

We are entering an era in which supply chain management will be dictated by the consumer, rather than the producer.  The quest for technical, social, and environmental product quality is an unavoidable trend. Businesses that do not follow this trend will run the risk of being segregated to rogue markets, low quality niches, and marked as low quality suppliers.

The leading Brazilian agribusiness companies, the ones that have already adopted better and sustainable practices as a competitive strategy, are being only too complacent with the risk of accepting such a retrograde political leadership. Trade barriers will be raised against their products. Product recalls will increase. Brazil will loose the best portions of the global commodity market.

Is this really the goal of the Brazilian agribusiness?

Amidst a judicial battle around the hydropower dam of Belo Monte, in the Brazilian Amazon region, the government has hastily auctioned the project. The 7-minute long bidding is being contested at the federal courts.

There are four lawsuits, as of yesterday, to stop the project, and revoke the auction. The government has been able to suspend the injunctions and go on with the auction, but there has been no ruling yet by the Federal Court of Appeals on whether the whole process has been in accordance to the law and environmental rules. See Jeremy Hance story on the Belo Monte auction for Mongabay here.

Only 8 months before being replaced by a new administration, the government has bypassed rules and set all legal and policy precaution aside only to see the project auctioned. What has been puzzling many analysts, including myself, is why is President Lula fighting so stubbornly to speed up a project that clearly requires a more thorough technical evaluation on all grounds.

It is also intriguing why the government has refused to look at any alternative, even other hydro plants already planned. The project has raised doubts on economic, financial, energy efficiency, environmental, and procedural grounds. There is no justification for such a hasty implementation. The country will have a surplus of electric power of about 4,000 mW by 2013. Technological uncertainties may lead to skyrocketing maintenance costs. The dam is more than 1,000 km away from the grid. For its electricity to reach consumer centers the government will have to build a long and very costly transmission line. There are better alternatives within the grid area. The government has never done a comparative analysis of the costs and benefits of the Belo Monte plant against other hydro or wind power alternatives closer to consumer centers.

One of the Federal Prosecutor’s arguments is that the auction has specified a larger flooded area than allowed by the provisional environmental license. If the court finds that there is a difference between what was auctioned, what was licensed, it is likely that it will be revoked.

The environmental license itself is contested at the Federal Court due to several irregularities identified by the Federal Prosecutor. He has argued that it was granted by Ibama, the federal environmental agency, without a complete assessment of the dam’s environmental impact, as required by law. He attached documents showing that Ibama’s analysts wrote several memos stating that there were many technical points requiring clarification, before an appropriate assessment of environmental impact could be effectively made.

The project has a huge environmental impact, endangering forest reproduction over a 100 km long tract of the Amazon rainforest. It would also reduce the fish and water supply of local indigenous communities. Belo Monte is controversial on economic and energy security grounds as well. It is the less efficient electric power project under consideration in Brazil. It will cost over US$ 17 billion and would have to be almost entirely subsidized. The fiscal risk is very high. The maximum tariff adopted as a ceiling for the auction, of US$ 47.00 per kWh, is too low to make it financially viable to private investors. As a result, private investors have decided to participate only under the umbrella of state-owned companies. To circumvent private financial objections, the government has decided to organize consortia led by state-owned power companies. Private investors were invited to join as minority partners. The state-owned investment bank, BNDES, will provide highly subsidized finance for 80% of the project. The return on investment is so low that the pension funds of state-owned corporations the government wanted to bring to the consortia could not participate. ROI is smaller than the minimum set by the law that regulates pension funds.

The Belo Monte project was first released in 1979. Its original design was an environmental nightmare. Although subsequent redesigning has reduced its impact on the environment, it failed to remove its structural flaws. For the plant to be more efficient, the dam would have to be much larger, doing an unbearable damage to the Xingu river and to the Amazon forest. To minimize environmental damage, the project ends up with one of the lowest capacity to yield ratios in the Brazilian power sector. Its annual average power yield would be within the range of 3,500 mW – 4,500 mW, depending on the water flow, for an installed capacity of 11,200 mW.

Even for the plant to generate 4,500 mW annually, channels would have to divert a huge amount of the water flow into the dam. Upriver water availability would be severely compromised. Draining the river upstream would have important environmental consequences. A large portion of the rainforest in this region remains flooded for several months. The flood season coincides with the fruit season. Several species of fish enter the forest area when it is flooded and eat fruits, becoming major vectors for forest spreading and reproduction along the river banks. Depending on the water flow remaining upriver after the diverting channels are operational, most of the forest area would no longer be flooded and the forest would die. The level of remaining water would lead to imbalances on forest life and biodiversity. It would also negatively impact fisheries and the food supply of the local indigenous population. There is risk of spreading vector-borne epidemics, particularly malaria and dengue fever, because of changes in the distribution of water, drying upriver and flooding at the dam site. Levees would be necessary to reduce flooding in the rain season by water overflowing the dam.

Emissions of methane due to forest degradation and death were not counted as environmental impacts. The dam could also become a major source of emissions due to the large amount of organic sediment typical of Amazonian rivers.

The winner of the 7-minute auction was a loose coalition of companies, assembled only a few days before the bidding, and led by state-owned CHESF. The government agency in charge of auctioning, ANEEL, has made several last-minute maneuvers for the group to be entitled to register. Their bid of US$ 44.00 has been unanimously considered as untenable. It is consensus in the financial markets and in the electric power sector that even the US$ 47.00 set as ceiling by the government would not be profitable. Experts who are favorable to the project, although critical of the way the government is conducting the process, say that the minimum profitable tariff would be US$ 57.00, taking finance subsidy into account. O Globo newspaper columnist Miriam Leitão gives more details on the final dealings that led to this objectionable fast-track process. Her column, here, reveals several important aspects of the Belo Monte affair (in Portuguese).

The dominant groups in the Brazilian electric power sector – contractors, experts, consultants, government officials – refuse to even consider wind power as an alternative, in spite of the country’s obvious wind and solar power advantages. Brazil has only 600 mW of wind power installed capacity, compared to China’s almost 30,000 mW. China has increased its capacity by 13,800 mW in 2009, more than Belo Monte’s nominal capacity.

Only two experts, among more than a dozen interviewed in the Brazilian press, said that wind power should be considered as an alternative. The Brazilian energy establishment is so antagonistic to the idea of wind power, that there is no serious official inventory of the country’s wind power potential. There is only a very partial survey of on-shore potential. Recent academic research has estimated that Brazil’s off-shore potential is even greater than on-shore. There are indications that in some on-shore sites in the Northeastern states, and several off-shore sites, along the coast, installed capacity to effective yield ratios could be as high as 50%, compared to the commonly used 30% average. The difference has to do with the direction and strength of the wind during the day and the number of windy days in the year. But no official and systematic appraisal has ever been released.

Senator Marina Silva, the Green Party presidential candidate, has told me that Belo Monte should be reexamined and the government should conduct further public inquiries before it is thoroughly reviewed by Ibama, the federal environmental agency. The forerunner in the polls, the Social Democrat candidate, José Serra, has not commented. But he has adopted greener policies while governor of the State of São Paulo. If the electoral wind does not go in the direction of President Lula’s candidate, he might well have bet his political assets on a damned dam.

Sergio Abranches

The Copenhagen Accord has become the most representative global climate political agreement since the Framework Convention on Climate Change, that entered into force on 21, March, 1994. It now has the formal adhesion of more than 100 countries, including all large carbon emitters of the world, except Russia, amounting to more than 80% of global GHG emissions. But it has no legal force. It depends entirely on the signatories’ willingness to hold to their promised emissions reductions.

The convention is, as its name says, a legal framework, not an operational treaty. The legal operational instrument is the Kyoto Protocol, signed on December, 11, 1997, but coming into force only on 16, February, 2005. The U.S. has never ratified it. The large emerging economies, China, India, and Brazil, have no obligations under the protocol. Only “Annex I Countries” have binding emissions reduction targets. Targets for the period of 2008-2012 were set too low: ~ 5% of 1990 global emissions. Although legally binding, the Protocol has no mechanism of enforcement. The legal consequence of Annex I countries’ noncompliance is unclear.

The Kyoto Protocol has broad support among environmentalists and G77 governments because it is legally binding. Legally binding, it is. Politically representative, it is not. Its targets are too small to make a difference, and there has been no agreement so far on its second commitment period.

The Copenhagen Accord is operational, although not legally binding. Its targets represent around 20% of 1990 global emissions to 2020. They are at least five percentage points below what would be necessary to barely meet the 2^oC limit. The U.S. pledge is far too low, representing a reduction of no more than 5% of its 1990 emissions to 2020.

The history of the major BASIC countries’ (China, India, and Brazil) formal support to the Accord is yet to be told. They’ve initially registered their voluntary targets, without formally and explicitly supporting the accord. The first Brazilian letter, confirming the country’s mitigation actions, was rather ambiguous about the country’s association to the Accord. Afterwards the government has sent a second letter stating its formal support more clearly. It took more time for India and China to follow suit. This delay has to do with Post-Copenhagen political discussions about the Copenhagen Accord between the BASIC countries and their unsupportive G77 partners. At the end of the day, the fact that the BASIC countries were among the Accord’s major brokers has prevailed.

India’s Environment minister, Jairam Ramesh, explained to the Parliament that the decision to officially support the Accord was taken “after careful consideration”. Reuters reports that he told MPs that: “we believe that our decision (…) reflects the role India played in giving shape to the Copenhagen Accord.”

The U.S. sees the Copenhagen Accord as the only way towards a future full climate treaty. Todd Stern, chief U.S. climate envoy has said on several occasions that his country will not ratify the Kyoto Protocol. He also said the Obama Administration would like the Copenhagen Accord to guide talks on a new treaty. The United States has urged further formalization of the Accord at the next major U.N. climate meeting in Cancún, Mexico, Reuters reports.

G77 countries, including the BASIC, consider the continuation of the Kyoto Protocol as a sine qua non to any further deals.

Climate diplomacy has, now, two ways to go. One would be to work towards a new Protocol to substitute Kyoto, having the Copenhagen Accord as a starting point. To achieve that, the G77 would have to be persuaded to abandon the Kyoto Protocol. The other way would be to adopt the “two-track” solution. This track requires the agreement on  a second commitment period for the Kyoto Protocol, and the legal formalization of the Copenhagen Accord in Cancun, at COP16 or, more likely, at COP17, in South Africa, in 2011.

While the U.S. and the European Union embraced the Copenhagen Accord with no reserves, the BASIC countries said the Accord is not legal. The only legal instrument they accept is the Kyoto Protocol. Does it really matter if they adhere and record their quantitative voluntary actions? Is this an important divide between developed and emerging powers?

I feel increasingly inclined to answer no to both questions.

Let’s be practical. The Kyoto Protocol is legal, but its targets were set so low that they became utterly ineffective. The U.S. didn’t ratify the Protocol. The BASIC countries (Brazil, South Africa, India and China) are “non-Annex I” parties, meaning they have no binding obligations.

As a result, the Protocol has a very partial coverage of total GHG emissions. Being legally binding made almost no difference to the trajectory of emissions or to the behavior of the Parties to the Protocol. To the BASIC countries, the legal character of the Kyoto Protocol serves only to make it sure they have no legal obligations, because they do not belong to the Annex I. The U.S. will never ratify it. There has been little progress in the negotiations regarding its Phase 2. The Post 2012 Kyoto Protocol will not have China, Brazil and India among Annex I countries, and without the U.S. as well, it will remain a poor instrument to tackle the global climate change threat.

Now, let’s look at the Copenhagen Accord. With the adhesion of the U.S., the European Union, Canada, Australia, China, India, Brazil, and South Africa it covers most of the global GHG emissions. Add Japan and Russia, and it reaches the level of emissions that, if appropriately regulated, can do the job of preventing a climactic cataclysm. This select group of countries represent most of global political, economic, and scientific power as well.

The Accord is not legal indeed. It is political. With all these countries saying they’re politically committed to its terms, and publicly recording their voluntary actions to reduce emissions, it, nevertheless, gets substance and relevance. All of them are recording quantitative goals. To call them binding targets or voluntary actions seems so far a matter of lesser importance. Just look at what happened to Kyoto’s binding targets. To me it is more important that, for the first time, the U.S., China, Brazil, and India are making political commitments for emissions reductions. And they come with a number attached.

These targets still fall short of responding to scientific requirements. But the Accord also provides for performance reviews to conform actions to the requirement of maintaing global warming near 2^oC. This is already more than the Kyoto Protocol has accomplished. It has also resolved some decade long deadlocks on finance and technology transfer.

What the Copenhagen Accord lacks, the Kyoto Protocol also doesn’t have: a working enforcement mechanism. We are far from having an adequate framework for global climate governance. And we will have to eventually arrive at one.

The Copenhagen Accord can move forward along two different tracks. The first one, would be to enter the diplomatic track of the Climate Convention. Its terms and targets/actions would have to be transcribed into an official document tabled by the Working Group on the Climate Convention (AWG-LCA) to be unanimously approved by the plenary of 192 countries, hopefully during COP16, in Cancun, Mexico.

The alternative route would be to keep going on its own. The countries that have adhered to the Accord would continue to negotiate an appropriate and acceptable legal statute. Negotiations should also address the governance regime that would make this statute enforceable and policy-relevant.

The first road seems to be the harder one. The history of the Climate Convention has showed how difficult it is to reach consensus within such a large and heterogeneous group of countries.

The Copenhagen Accord has gained some new substance with the adhesion of the “carbon powers” of the world. A smaller group of countries, even if a polarized one, is more likely to reach a meaningful agreement than a large group of more than 100 nations with disparate interests.

The convention plenary is so divided that it is even hard to form polarized coalitions within it. What we’ve seen in Copenhagen was the fractionalization of previous clusters of countries, as the likelihood of an agreement increased. That’s how the G77 and China broke down, the BASIC, the AOSIS, and the African block replacing it. These three blocks have proved to be far more politically productive than the G77.

That the Accord is still alive, in spite of the frustrations it has raised at the dismal closing of COP15, seems a good omen. A global climate change deal is still possible.

Sergio Abranches

It is an extensive and complex law with many stakeholders. During the legislative process a few amendments have improved it to some extent. One of them, for instance, has included the emissions reduction targets as a “voluntary contribution” from Brazil to the global fight against climate change.  There were also a few important setbacks, however. President Lula has vetoed three articles. One on constitutional grounds, the other two conceding to pressure from his Minister of Energy.

Lula vetoed the provision that the country should gradually abandon fossil fuels. As there was no time frame, nor any description of actions that should be taken to that end, it amounted to no more than a future policy indication. But the Minister feared that by maintaining it, an enabling decree could make provisions that would do harm to the fossil energy industry. He only accepted that priority should be given to renewable energy sources.

The Minister of Energy has also persuaded President Lula to veto article 10, that restricted government incentives to small hydropower plants, wind, solar, biomass and other alternative sources. He argued that it would impede incentives to large hydropower plants.

The veto damaged the economics of the new law, by removing the structure of incentives to promote non-fossil energy.

There is some room, however, for improvement and correction through carefully drafting the enabling decree. The law can only be enacted after this enabling legislation is published. It can de done through a series of presidential decrees. Presidential decrees are not reviewed by Congress and can be enforced immediately.

The battle around the enabling decree is about to begin. An official source has told me today that they will not try to write all enabling rules at once. They’ll selectively pick the issues and areas they deem to be the most important and try to set the rules to allow their prompt enforcement. Some issues are almost certain to be in this first batch, because they are instrumental to the implementation of the emissions reduction targets that will be offered as the Brazilian contribution to the Copenhagen Accord.

This strategy of partial enablement aims at reducing the scope of conflict of interest and infighting to prevent a decision-making paralysis.

Another source told me they’ll also work on other parts of the enabling legislation with a longer-term perspective, leaving the groundwork done for the next Administration, to take office on January 1^st ,2011.

People at the Environment and Science and Technology ministries want to expedite the approval of the enabling decree, because ministers and higher officials who will run for elective office on October elections will have to leave the government within the next two months. They want the same people who negotiated the Law of Climate Change to lead the deal on the enabling legislation. It is very likely that Lula will replace his political ministers by technical and managerial people who lack the political savvy to tackle the complex and contentious issues the decree will have to address.

A source told me the ideal timing would be to have the enabling legislation approved by right after Carnival.

Sergio Abranches

President Obama had already decided to only accept internationally binding mitigation commitments that were already voted by Congress. Although EPA has a broad mandate, the Executive felt it still needs a Federal Climate Change bill approved by Congress to fully define its range of action at the global arena.

It is unlikely that Congress will approve a climate change bill within the next 20 days. Without it the US would not help designing a legally binding treaty in Copenhagen.

The problem is that without a definition from the US, China will hardly play all the cards it has prepared to take to Copenhagen. The US and China are the two pivotal players to seal a global climate change deal.

The fate of the Copenhagen Summit now depends on a tree-way dilemma, a variation of sorts of the “Prisoner’s Dilemma” game. Obama will only commit the US internationally to what Congress writes into law. China will only move forward after the US plays its hand. As Congress stalls the climate change bill, Obama retreats from his own personal pledge to lead an ambitious climate deal, and China also holds its hand. This amounts to both the US and China defecting from a deal in Copenhagen.

Enters the solution of a “politically binding”, rather than a “legally binding” agreement. It helps Obama to save face, and gives him more time to wrestle with a recalcitrant Democratic majority and a hardline Republican opposition to get a climate change bill voted. But it also breaks the momentum that has been building up towards sealing a meaningful deal in Copenhagen.

China had made an important move at the New York Summit, announcing it was prepared to decide on a relevant reduction of the carbon intensity of its GDP by 2020. The details of what a “relevant reduction” would mean were left to be laid down at the table in Copenhagen. The condition was that the US also made a significant commitment. The European Union has already made a concrete commitment. The Japanese prime-minister Yukio Hatoyama stated that the new government he leads is committed to deeper emissions cuts than his predecessor had approved. Brazil announced, for the first time, its own commitment to a quantified target for emissions cut, just a few hours before president Lula took the presidential plane to visit his French colleague.

Why should all, now, step backwards, just to come into line with the US? Is the fact that president Obama’s domestic leadership has not been strong enough to get Congress to act reason enough for a regress? Should we loose momentum so arduously gained over the last months to keep waiting for Obama’s own momentum?

What would this compromise solution look like anyway? How different would it be from simply redrawing the “Bali Roadmap”?

Denmark’s Prime Minister, Lars Lokke Rasmussen, also chairman of the climate conference, flew to Singapore on Saturday for an emergency meeting to help answer this question.

As Jonathan Weisman reported for The Wall Street Journal, this Sunday, what he said was:

“Even if we may not hammer out the last dot’s of a legally binding instrument, I do believe a political binding agreement with specific commitment to mitigation and finance provides a strong basis for immediate action in the years to come.”

According to The Wall Street Journal:

Mr. Rasmussen laid out in some detail his goals for the Copenhagen summit. He said leaders should produce a five- to eight-page text with “precise language” committing developed countries to reductions of emissions thought to be warming the planet, with provisions on adapting to warmer temperatures, financing adaptation and combating climate change in poor countries, and technological development and diffusion. It would include pledges of immediate financing for early action.

That doesn’t sound much different from the “Bali Roadmap”, and we should be reminded that the Roadmap led us nowhere but to the same deadlock we were before. Remember the Poznan dismal ending.

Mr. Rasmussen was also very much concerned to make it clear that his idea does not serve to save face:

“We are not aiming to let anyone off the hook,” Mr. Rasmussen told the leaders. “We are trying to create a framework that will allow everybody to commit,” reported the Wall Street Journal.

Helene Cooper, writing from Singapore for The New York Times says  Michael Froman, the deputy national security adviser for international economic affairs has explained that:

“There was an assessment by the leaders that it is unrealistic to expect a full internationally, legally binding agreement could be negotiated between now and Copenhagen, which starts in 22 days.”

Nothing that secretary Clinton had not said prior to the APEC meeting. Most of the difficulty now lies on the side of the US, not of other pivotal players that could lead the Copenhagen talks towards a real deal.

The US government keeps talking about a remote future on vague terms. Typical diplomat’s escapist phases were rapidly learned by Secretary of State Clinton to adorn the US pledge for more time. At a news conference earlier this month, she warned that the parties to the climate summit could not

“let the pursuit of perfection get in the way of progress.”

She also said that

“if we all exert maximum effort and embrace the right blend of pragmatism and principle, I believe we can secure a strong outcome at Copenhagen and that would be a stepping stone toward full legal agreement.”

This sounds pretty much like what has been done in Bali. In Poznan, the world agreed to wait until president Obama’s administration fully took hold of affairs so that it could make its pledge at COP15, in Copenhagen.

Most of the nations have already moved a step forward regarding both COP13 and COP14. Only the US remains basically where it was since Obama’s inauguration. Would it not now be the time for the US to get some speed of its own?

President Obama could surely use a “framework agreement” (Secretary Clinton has never used the term “politically binding”) as a powerful resource to persuade the Democratic majority to vote more swiftly the climate change bill, before next year’s midterm elections. But that would come at the cost of another year lost.

It should come as no surprise that president Obama choses the Asia-Pacific Economic Cooperation (APEC) meeting to state the US  position about what is feasible to do in Copenhagen.

It is well known that the US and China have been discussing a common strategy for Copenhagen for some time now. Although they are not playmates entirely at ease with one another, the fact that China conditions its own commitment to the US’s perfectly suits the Obama strategy. Obama needs to seem to be leading the US into a meaningful attitude at the climate talks, to differentiate himself from the Bush era climate diplomacy. He doesn’t want, however, to commit to any concrete action before knowing what Congress has approved. A “framework agreement” suits him well, and he expects China to follow suit.

Their interplay has, however, already raised some strong reactions among other pivotal leaders in Copenhagen. Presidents Sarkozy, of France, and Lula da Silva, of Brazil, reacted to the US-China entente by declaring they would push for a complete deal in Copenhagen. President Lula went as far as raising suspicion that the US and China were trying to create “a G2” to impose their common interests to the rest of the world.

It is unlikely that the United States and China could solve all their conflicts of interest to form an alliance to play a two-party hegemonic role in world affairs. It is true, nevertheless, that the two are the key players regarding many critical global issues, climate change being paramount among them. It is far better that they try to work together, than to build a new bipolarity as the one between the US and the USSR, during the Cold War, that plagued most of last century’s international relations. But this maneuver to delay an agreement in Copenhagen clearly deviates from the endeavors of several other players.

According to The Wall Street Journal, Michael Froman interpreted the decision as meaning that “Copenhagen would be the first step to a legally binding agreement.” This two-step doctrine was also behind the Bali Roadmap, to no avail.

We need far more than that to break the deadlock. If a political agreement is the only way, it cannot be drafted on such vague terms as US authorities have been using. It has to point to concrete political solutions to the hurdles that are still holding back a treaty.

The scientific and technical details for such a deal are well known and there is not much room to deviate from them. It is the political groundwork that is still lacking, and most of what is lacking must come from president Obama and the US.

In other words: it would have to be far more of a “politically binding” agreement, than a “framework agreement”. The US would have to commit to far more real action than it has been willing to do so far. And it would still be a second best, or suboptimal, outcome.

The deadlock and the divide among countries are set into political, not technical grounds. This is a fact. Another roadmap for future talks is not a solution to this political deadlock, only its reiteration.

Copenhagen has not been politically saved yet. It is up to the other world leaders to urge the US and president Obama to come up with a more substantive response. After all we are still talking about the world’s largest emitter.

Sergio Abranches

The major contribution to this deviation from a BAU trajectory of GHG emissions will come from reduction of deforestation and degradation, around 25 percentage points. The remaining will come mainly from agriculture, and a ban on the use of charcoal from native forest logging by pig iron mills. Contributions from the manufacturing and transport sectors will be very modest.

Real emissions reductions will depend on the baseline adopted and on the assumptions used to project the future trajectory of emissions. Part of the conflict between the so-called “developmentalists” led by Chief of Staff Dilma Roussef and the “environmentalists” with Environment minister Carlos Minc at the front was over the rate of future growth used for the estimates.

Original projections from the Secretary for Climate Change of the Environment Ministry used a yearly 4 percent average GDP growth as reference, already higher than the average economic growth of the last decade. The projections were then rerun using 5 percent and 6 percent growth averages, that seem highly unlikely to obtain in the near future. Higher growth figures tend to overestimate both the physical values and the pace of increase of emissions associated to the percentages.

Another important issue the government has yet to clear regards the emissions data used in the projections. The only official figures publicly available for emissions date from 1994. An explanation is still due for how government experts have calculated the future trajectory of emissions, without a series of actual emissions for the last 14 years.

Structural change since currency stabilization, commercial opening, and privatization have totally reconfigured the Brazilian industrial, agricultural and transport sectors. The auto industry has more than doubled output from 1994 to 2008. Commodity exports have increased dramatically. The manufacturing, transport, agribusiness, and energy industries are totally different today compared to their condition in 1994. All this structural change has deeply affected the distribution of GHG emissions among the different areas of activity.

The current coefficients for all sectors ought to be very different from those of 1994. Deforestation, for instance, averaged 20,700 sq. km for the period 1994-1996. The average for the last 3 years came down to 14,800 sq. km. The government has used an average of 19,500 sq. km to set the target of 80% reduction to 2020. This means that to meet the target, actual decline in logging will have to be far less steeply than if the government chose more recent figures as a baseline. This lower figure will, however, also contribute to lower the five-year average for the next period. The target is defined by periods using a five-year moving average.

This week the government has announced the smallest estimate for annual deforestation since measurement began: 7,000 sq. km. If this number is confirmed, and can be sustained after recession is gone, it means that half the target set for 2020 would have already been met, due to the high starting point chosen to define the goal.

Contribution of deforestation to GHG emissions was much higher in 1994, than it is today. The contribution of the transport and energy industries has increased significantly. Over the last 8 years most of the new electricity added to the Brazilian grid came from fossil fuel fired power plants.

How seriously this target will be taken by the government remains to be seen. It could well be no more than an act of electoral marketing. One of the reasons to suspect that much is that the center stage was occupied by president Lula’s appointee to run for president next year, Chief of Staff Dilma Roussef. She was clearly not at easy defending the same environmental issues she has opposed during all her tenure at the government.

To gain credibility the government has to publish, the sooner the better, the model and the data base used to project future emissions, the scenario assumptions, and the coefficients for the contribution of each sector to the reduction of emissions. Transparency and independent review of the data and projections used to set these goals will be a necessary condition for a credible commitment.

Depending on the data used for the projections, the announced policy could represent a reduction between 10% and 20% of 2005 emissions.

The final GHG emissions cut resulting from the policy notwithstanding, the fact remains it is a major political shift. After years denying any responsibility to mitigation and rejecting the idea of committing to a quantified goal, the government has finally decided to present a quantifiable and verifiable mitigation action at COP15.

Once the diplomats officially announce the target, Brazil will become accountable for it. The country will have crossed a point of no return. Whether it is legally binding or not is just a formality. Politically it will make the government accountable.

From this point onwards it will be a matter of refining and enlarging the country’s commitment. The next step will likely be for the new administration to take office in 2011 to substitute this deviation from a projection of future emissions with a target based on real emissions for a base-year, probably 2005.

The state of São Paulo, whose governor, José Serra, from PSDB, the main opposition party, is a likely presidential candidate, has already written into law a reduction of 20 percent of 2005 GHG emissions, by 2020. A far more concrete and incontrovertible goal.

This move from Brazil, together with the likely cooperative attitude from China, and depending on what the US will do could well change for the better the prospects of a meaningful political deal in Copenhagen.

Sergio Abranches

INPE – The National Space Research Agency reports a major reduction of deforestation rates in the Brazilian Amazon. Preliminary satellite data shows that total deforestation from August 2008 to July 2009 reached the lowest level since measurement began: 7,008 sq. km. Although the government, in full electoral drive, attributes this sharp drop in logging activity to policies of land property regularization, it has other causes.

The government is also celebrating these figures as a durable achievement, which is unlikely to be true. The major factor behind such a low number was the recession, that has dramatically reduced housing activities, the major source of demand for Amazon timber – both legal and illegal. The world economic crisis has also substantially reduced foreign demand for agricultural commodities, at the same time their prices fell significantly. There is a historic correlation between agricultural commodities prices and deforestation in the Brazilian Amazon.

Deforestation has been, nevertheless, on a downward trend since 2005. The two major economic drivers of deforestation in Brazil, soybean plantation and cattle ranching are under relative control due to successful action from Greenpeace. First the NGO has targeted soybean production, and led major consumers such as MacDonald’s, and its major supplier, Cargill, to join other large companies on a soy moratorium that is now 3 years old. Earlier this year, Greenpeace targeted cattle retailers, and as a result the larger supermarket chains Wal-Mart, Pão de Açúcar and Carrefour announced a ban on beef from ranchers and slaughterhouses accused of deforestation by state prosecutors. The government became a part of these initiatives after they were already in force.

This downward trend has also resulted from policies the of the command and control introduced by former Environment Minister Marina Silva, and maintained by the present minister Carlos Minc. Minc has also increased Federal Police and Environmental Agents’ raids against cattle ranchers and illegal loggers in the Amazon that began with so-called Operation Arch of Fire created by Marina Silva.

Among the most effective actions taken by the former minister was the resolution by the Monetary Authority prohibiting financing of farms and companies found to be illegally logging.

But it is clear that deforestation will only drop on a sustained way after a whole new development policy for the region is implemented.

Although this lower level of deforestation is good news, it is still too high. According to Warren Dean (With Broadax and Firebrand: The Destruction of the Brazilian Atlantic Forest) it took 150 years for the sugar cane producers to destroy 7,500 sq. km of the Atlantic Rainforest, between 1700 to 1850. In other words the government celebrates as a great achievement the fact that we are logging in one year the same amount of trees that were cut from the Atlantic Rainforest over 150 years. (Thanks to @claudioangelo for reminding us).

The government has been sounding its trumpets at every opportunity regarding the environmental agenda, since former Environment Minister, Marina Silva, quit Lula’s party, PT, to join the Green Party – PV on a bid to the Presidency in 2010. Suddenly a government that has always been aloof to environmental and climate change issues moved them to the center of its political marketing agenda.

This newly found concern for the environment will likely influence the government’s decision to commit to a quantifiable action aiming at curbing carbon emissions in Copenhagen. A good sign of this propensity for a shift on Brazil’s traditional diplomatic state of denial is that Lula has appointed his minister Dilma Roussef as head of the Brazilian delegation. Dilma Roussef, Lula’s Chief of Staff has been personally picked by the president as his party’s presidential candidate. This decision is likely to be announced later today. Tomorrow president Lula leaves for a visit to France, and minister Roussef goes from Paris to Copenhagen for preparatory talks on the way to COP15.

These are all incremental improvements that will require further work to become truly meaningful. The good news is that inertia has been broken. Underneath a heavy clutter of green washing and political marketeering there is some progress that may prove useful in the future, after politics gives room to sound policy.

Sergio Abranches

The convenient official answer is: a branch of the grid was damaged by a thunderstorm, with heavy rain, strong winds and lightning discharges. The Center for Weather Forecast and Climate Research (CPTEC) of the National Institute for Space Research (INPE) could not find any evidence of such a storm at the time and place the failure happened.

The incident revealed repeated mistakes of national energy policy as well as the systemic risks that endanger Brazilian energy security. Energy planning has been poor for decades. Long-range planning has been abandoned. The 10-year government program has a bias towards high carbon solutions. The system is too dependent on power from huge hydroelectric plants. Grid control is too centralized. Grid management is poor. The system is unable to isolate a faulty line, it has no efficient mechanism to rapidly identify failures, it takes too much time to relaunch.

Brazil faces a different type of energy dependency: it is too dependent on hydro sources. The system is, thus, vulnerable to droughts that are becoming more frequent and more severe. Wrong policy choices led to an increase of fossil fuel fired thermoelectric plants. This choice has significantly increased the level of carbon emissions from the power sector, once one of the world’s cleanest. Wind and photovoltaic sources are neglected, so are biomass alternatives.

The regulatory framework prevents decentralized small and medium scale self-generation by blocking its integration to the grid. The system has to work with a large amount of surplus supply to reduce risk of shortages. Every single point of the country depends entirely on the same sources of supply.

Energy authorities seem totally ignorant of the contemporary views on energy security. Even the best experts dismiss too easily any smart-grid solutions. There is a paradigmatic obstruction to renewable sources other than hydro, always deemed “too expensive, and too small scale” to be worth considering.

This “small scale” wind alternative has, for instance, reached 13.240 MW in China, almost the same amount the largest Brazilian hydropower plant (the second largest in the world) Itaipu yields. Wind power in China is on track to beat the government’s target of 30.000 MW by 2020.

It doesn’t look like a small scale option. It looks more like policy blindness or an organized interest barrier to these alternatives in the Brazilian energy policy-making process.

The hydro bias has moved the electric power frontier to the Amazon. Building huge hydropower plants in the Amazon, apart from their environmental impact, only increases the costs and risks to the grid. These plants require huge transmission lines to reach large consumption centers in Southern Brazil, crossing enormous tracts of dense jungle, using very high towers. Servicing of these lines is costly, very difficult and prone to accidents. These lines face higher risk of being damaged by heavy thunderstorms, tornados, and lightning.

New power outages are likely to happen again. This last one was a clear result of systemic failure, and grid fragilities. In the past, energy rationing resulted from a prolonged drought that emptied the reservoirs of the major plants.

Energy plans do not consider the country’s enormous wind and solar power potential. These sources could increase energy security, by diversifying the electric matrix. They would contribute to reduce its carbon intensity, increased by the addition of fossil fuel fired thermoelectric plants. Wind and photovoltaic plants could decentralize power generation, and serve as an alternative to Amazon-based power plants. The Amazon option has greater environmental impact, higher costs (when transmission lines are accounted for) and increases systemic risk.