Tackling Amazon deforestation is a key climate goal, but offshore exploration plans remain controversial
Brazil is heading to the UN's Cop 28 climate summit in Dubai to showcase recent successes in the fight against deforestation, and to show that its pariah days in the global environmental debate are over. But controversies over an oil and gas project in the Foz do Amazonas basin and delays in key legislation approvals could call the country's aspiration to a climate leadership role into question.
Brazilian president Luiz Inacio Lula da Silva has focused on policies that will not only improve the country's image abroad, but also put it on track to becoming one of the few nations to meet its 2030 emissions-reduction targets. Deforestation in the Amazon basin fell by 42.5pc in January-July compared with the same period in 2022, its lowest in five years, on the back of measures implemented by Lula's government. But the country will need to implement additional policies to meet an ambitious target of eliminating deforestation by 2030. The Cerrado region posted a 21.7pc increase in deforestation in the same period.
Lula is expected to spearhead pressure on wealthy countries to fulfil a decade-old pledge to support developing countries in their efforts to reduce emissions and transition to a low-carbon economy. This has been a recurring theme in his diplomatic missions and he will lead efforts to unite developing countries in Latin America to vocalise demands on climate finance.
The government is also pushing a legislative agenda that aims to boost investment in decarbonising the economy. Its ecological transition plan seeks to revive the economy and up investment in renewable energy and environmental preservation, while reducing poverty and social inequality. The government has been working on developing financing mechanisms, including green bonds, which will offer low-interest loans to projects to finance the plan. Unlike developed countries, Brazil does not have enough federal funding to offer massive subsidies.
And its efforts to bolster investment include a passing a series of decarbonisation bills in the legislature. A long-awaited bill to create a local carbon market passed the senate earlier this month and is being debated in the lower house, and the senate approved a bill that will regulate carbon capture and storage as well as legislation regulating the offshore wind sector.
Flight path
Other legislation is currently being debated in the lower house, including the so-called fuels of the future bill. It will establish blendsfor sustainable aviation fuel and set emissions-reduction targets for the aviation sector. The legislature is working with the government to develop new regulations for hydrogen, including potential incentives.
But for Brazil, the road to net zero must guarantee energy security and affordability alongside sustainability, and its oil and gas sector will continue to play a key part in the national energy mix. Lula, with mines and energy minister Alexandre Silveira, is pushing for regulators to approve offshore drilling in the Foz do Amazonas basin, an environmentally sensitive region off Brazil's northern coast, although environmental regulator Ibama rejected state-controlled oil company Petrobras' request to drill an exploration well in the region.
The push for oil and gas could put Brazil's environmental credentials to the test at Cop 28, as could the fact that the country is unlikely to increase its climate ambitions in the short term. It has reinstated stricter greenhouse gas emissions-reduction targets in its nationally determined contribution climate targets, but it is unlikely to update its goals until Cop 30, which it will host in 2025. And the decision to exclude the agriculture sector from Brazil's carbon market bill will make more difficult the already immense task of reducing emissions from land use.
