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Brazil’s Climate Role
As soon as my wife heard back from her Tia Helena (Aunt Helena, in Portuguese) in May this year, confirming she was safe and sound, we all felt relieved. She lives in Porto Alegre, the capital of Rio Grande do Sul, Brazil’s southernmost state. One of the worst floods in the country in the last 80 years struck the region at that time, resulting in the deaths of over 170 people, around 420 thousand displaced and 2.4 million affected, according to the state government’s civil defence agency[1].
In some regions, the rainfall amounted to nearly one-third of the average annual precipitation, affecting over 60% of the state. These figures are significant considering that Rio Grande do Sul is larger than the UK[2] and has a higher population than Portugal[3]. Porto Alegre’s International Airport, managed by the German concessionaire Fraport, sustained extensive damage and remains inoperable, with partial reopening expected in October this year[4].
In 2013, the Brazilian Panel on Climate Change (“PBMC”), a scientific group established by the Brazilian government and inspired by the United Nation’s Intergovernmental Panel on Climate Change (“IPCC”), issued a report warning of increased rainfall in southern Brazil due to climate change. The report received little attention at the time.
Uncovering the roots of deforestation
Unfortunately, flooding isn’t the only climate emergency the country is facing. The Amazon region is suffering from the worst drought on record. The water level in the Amazon river hit an all-time low in 2023 and is suffering again in 2024. This crisis is driving up freight costs for businesses in Manaus, the capital of the Amazon state, which hosts a significant Free Economic Zone with international corporations from the electronics and automotive industries, among others.
The city’s port, the fifth largest in Brazil, has been heavily impacted. In August, shipping companies started applying a Low Water Surcharge ranging from USD 3,500 to USD 5,000, in addition to the already rising global freight costs. The cost of shipping 40-foot container from Shanghai to Manaus, which used to be under USD 4,000, has now increased fivefold.
One of the leading causes of these drought episodes is deforestation. The Brazilian Legal Amazon, representing over 60% of the country’s territory, has seen 23% of its area deforested[5]. A staggering 97% of this deforested land is now dedicated to crop farming -mainly soybeans- and cattle ranching. Marcelo de Andrade, Founder and Chairman of the internationally recognised and awarded NGO Pro Natura International, argues that much of this deforestation is driven by small and medium-sized farmers. These farmers, seeking to improve their living conditions, are compelled to increase production, thus their income.
While advancements in satellite technology and Artificial Intelligence (“AI”) have enhanced deforestation monitoring and prevention, addressing the root causes remains critical. De Andrade believes there are viable alternatives to help improve the livelihoods of these rural producers. In this sense, Pro Natura is collaborating with the Brazilian Ministry of Agriculture on projects that aim to boost farmers’ productivity, diversify their crops and provide access to agricultural insurance in exchange for carbon credits.
A significant portion of deforestation is also caused by criminal organisations that threaten local settlers, including Indigenous communities, and seize control of large parts of land for agricultural or gold mining purposes.
The growing demand for grain and meat is the primary force behind this situation. Contrary to popular belief, this demand is not solely driven by international markets but also by Brazil’s domestic consumption. While China’s appetite for Brazilian soybeans is substantial -Brazil is the world’s largest producer, exporting 75% of its production to the Asian giant - this accounts for only a part of the total demand.
According to a study by São Paulo University (“USP”), cited by the Brazilian media outlet Exame and published in the scientific journal Nature Sustainability, around 58% of the forest clearing for crop farming, especially soybeans, is indeed driven by rising international demand. However, the remaining 42% is attributable to Brazil’s growing domestic demand. In the case of deforestation for cattle ranching, particularly beef production, internal demand surpasses that of international markets[6].
From denial to action
Former far-right President Jair Bolsonaro (2019-2022), an outspoken climate change denialist, prioritised economic development over environmental protection by reducing the budget and authority of the country’s environmental agencies. This policy shift led to a surge in deforestation, driven by logging, mining and agricultural activities. This policy shift had a negative impact not only on the environment but also on Indigenous lands, which lost federal protections and were opened to exploitation.
The current President, Luiz Inácio Lula da Silva, now serving his third term after leading the country from 2003 to 2010, has adopted a markedly different approach. Brazil has found its way back to the international stage in environmental affairs by implementing policies to combat climate change, curb deforestation and protect the indigenous people and their lands. Lula appointed Marina Silva, a prominent figure in Brazil’s environmental movement, Minister of the Environment and Climate Change. Additionally, his administration created the Ministry of Indigenous People, led by Sônia Guajajara, the first indigenous person to hold a ministerial position.
Lula has pledged to achieve zero deforestation by 2030, a highly ambitious goal that is hardly achievable. According to Brazil’s MapBiomas 2023 Annual Deforestation Report, deforestation in Brazil decreased by 11.6% compared to 2022, driven primarily by a 62.2% reduction in the Amazonia biome. However, other critical areas continue to suffer significant increases in forest clearing, particularly the Cerrado biome, which experienced a 67.7% rise, making it the most affected region in 2023.
In terms of geopolitics and international relations, this new pro-environment policy is prompting several European countries and the United States to resume financing the Amazon Fund, whose purpose is to attract donations for combating deforestation and protecting the Amazon rainforest. The fund had seen most of its donors withhold their contribution under the Bolsonaro administration due to widespread concerns over its environmental policies.
The current government’s approach is also expected to accelerate the negotiations for the Mercosur—European Union trade deal. The agreement would generate a market of 780 million people. Such negotiations, which have been ongoing for years, have seen fluctuations. France leads the opposition over environmental damage and the belief that South American products do not follow the same European standards, resulting in unfair competition.
However, Mercosur members accuse Europeans of protectionism, using environmental concerns as a pretext. They highlight that such a deal includes important climate change commitments, such as implementing the Paris Agreement, which aims to maintain global warming below 1.5 degrees Celsius.
Brazil’s renewable energy surge
In contrast to deforestation, Brazil is demonstrating its ability to foster business opportunities and economic development in a sustainable manner. The country’s electricity matrix is among the most renewable in the world. According to Brazil’s electric power regulator ANEEL, over 84% of the country’s electricity comes from renewable sources, with hydroelectric plants accounting for 55% of the total 200 GW capacity.
Pro-Natura's Marcelo De Andrade, who is also a businessman with ties to Venture Capital and Private Equity firms exclusively focused on sustainable businesses, sees significant wind and solar energy potential. Indeed, wind and solar energy are leading the expansion of Brazil’s installed capacity, representing over 90% of this growth and creating substantial business opportunities. Wind energy contributes 15% to the total electric capacity[7], while solar energy represents 7% [8]. The former saw an installed capacity growth of nearly 21% in 2023 compared to 2022, the latter grew by 55% [9].
De Andrade believes both sectors will continue to expand in the coming years, with solar energy potentially reaching a similar share of the matrix as wind energy. He notes that solar energy, having been regulated later, is now gaining momentum partly due to the lower capital expenditure (“CAPEX”) requirements compared to wind energy.
Brazilian legislators are developing a legal framework to regulate offshore wind farms. Once approved, this framework is expected to attract new national and international investments. De Andrade emphasises that Brazil’s shallow continental shelf—the submerged edge of the continent—makes these projects technically feasible. He also highlights the potential for new business opportunities to emerge in other sectors, such as green hydrogen and Sustainable Aviation Fuel (“SAF”).
The road to COP30
Brazil has reasserted itself on the international stage in terms of environment and climate change. While progress is being made, significant challenges remain. The country’s decision to join OPEC+ group of oil-producing and exporting countries last January, even if only as an observer, is an example of a contradictory policy that creates uncertainty and criticism both domestically and abroad.
In 2025 Brazil will have a significant opportunity to prove its readiness to take a central role in global climate governance. It will host COP30, the UN’s annual climate summit, in Belém do Pará, capital of the Amazonian state of Pará.
The world will be watching, and Brazil must step up so that the event does not become a mere symbolic conference. However, balancing economic growth with environmental sustainability remains a complex challenge. The success of COP30 will depend on Brazil’s ability to demonstrate genuine progress and a lasting commitment to its environmental goals, ensuring that the event serves as a meaningful milestone, rather than a symbolic gesture “just for the show”, or as Brazilians like to say, “para inglês ver”.
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[1] https://www.estado.rs.gov.br/defesa-civil-atualiza-balanco-das-enchentes-no-rs-9-6-9h
[2] https://www.cia.gov/the-world-factbook/countries/united-kingdom/#geography
https://www.estado.rs.gov.br/geografia
[3] https://www.cia.gov/the-world-factbook/countries/portugal/#people-and-society
https://www.cia.gov/the-world-factbook/countries/portugal/#people-and-society
[5] Amazônia Legal: estudo mostra de onde parte a pressão pelo desmatamento | Exame
[6] Amazônia Legal: estudo mostra de onde parte a pressão pelo desmatamento | Exame
[7] Matriz elétrica brasileira alcança 200 GW — Agência Nacional de Energia Elétrica (www.gov.br)
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