Brazil’s rising deforestation to draw US scrutiny

Brazil's shrinking Amazon rainforest is expected to draw intense scrutiny from the incoming US administration of president-elect Joe Biden, who has pledged to incorporate environmental commitments into trade policy.

The controversy over deforestation is a window into broader energy transition challenges facing developing countries such as Brazil, which is a major non-Opec oil supplier.

In a typically vitriolic speech on 10 November, Brazil's president Jair Bolsonaro warned against any potential commercial impact from deforestation and associated fires that have further eroded the diminishing resource, seen as critical to tackling climate change.

"A lot of crooks are interested in our wealth. We just saw an important presidential candidate saying there will be trade consequences if I don't fix the Amazon fires. How to respond? Diplomacy isn't enough. When you run out of saliva, you have to have gunpowder," Bolsonaro said.

In his first presidential debate with incumbent US president Donald Trump in September, Biden proposed a $20bn international offer to Brazil to stop deforestation, with a warning of "significant economic consequences" if it does not.

Trump lost to Biden in 3 November elections, but he has so far refused to concede. Bolsonaro, a close Trump ally, is among a handful of foreign leaders who have not already congratulated Biden.

Similar to Trump, Bolsonaro has systematically dismantled his country's environmental safeguards. Among his constituents are cattle ranchers and large agricultural groups that oppose land-use restrictions.

According to preliminary data from Brazil's national institute of space research (Inpe), Amazon deforestation soared for a second consecutive year. Satellite imagery from Inpe's real-time deforestation system (Deter) indicate that during the 2019-20 season, which runs from August to July, deforestation in the Amazon basin increased by nearly 35pc to 9,216km2, up from 6,844km2 in the previous 2018-19 cycle.

The official deforestation figure, which is based on the Amazon deforestation satellite monitoring system (Prodes), will not be released until late November. Prodes uses high-resolution satellite imagery and typically posts a higher number than the Deter system.

According to data compiled by local environmental NGO Imazon using data from the Google Earth Engine platform, deforestation in the 2019-20 season reached 6,536km2, up 29pc from the previous cycle.

Despite Bolsonaro's defiance, there is growing domestic concern about deforestation. Federal prosecutors are currently trying to remove environment minister Ricardo Salles for the "destruction of environmental policies and for reduced oversight."

This week, the Brazil's supreme court created a judiciary environmental oversight committee, which seeks to expand legal mechanisms to carry out a constitutional mandate of protecting the environment.

Trade risks But pressure is mounting faster from abroad. On 7 October, the European Parliament rejected a trade deal with the Mercosur trade bloc in a non-binding vote, citing Brazil's spotty environmental policy.

In a 10 November joint statement, Brazil and the US said they established an "environmental framework dialogue", outlining largely symbolic steps that address some of the issues that have raised the ire of US congressional Democrats.

The prospect of a free trade agreement between Brazil and the US looked unlikely even under a Trump presidency, according to US trade representative Robert Lighthizer, who cited Democratic opposition.

A Biden administration is not expected to prioritize trade agreements with any country in the short term, former Commerce Department official Ken Hyatt told a US-Brazil business forum earlier this month. With respect to Brazil, "the private sector needs to get out in front of us," Hyatt says, citing policy differences on clean energy and other issues.

Deforestation in Brazilian states Km2

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