New study recommends radical shift in energy policies in Brazil to improve integration with climate goals

SÃO PAOLO (September 21, 2015) – A new report by World Resources Institute and University of São Paolo’s Institute of Energy and Environment finds that Brazil could change its energy mix and move toward a lower-carbon economy by modernizing transport, improving renewable energy capacity and increasing industrial efficiency. The report, Bridging the Gap Between Energy and Climate Policies in Brazil, analyses different emissions scenarios and makes recommendations to strengthen the portfolio of policies that would enable Brazil to meet both its energy and climate objectives.

As the world’s seventh-largest emitter of greenhouse gases, Brazil’s climate commitment is an important piece of the global response to climate change. The report is especially timely as Brazil is expected to release its Intended Nationally Determined Contribution (INDC) this week. The report finds that under current policies Brazilian GHG emissions are likely to exceed the country’s share of the remaining carbon budget between 2024 and 2035 if it does not change its current energy mix.

“Brazil has the opportunity to strengthen and implement policies that will set us on an ambitious climate and energy trajectory,” said Viviane Romeiro, WRI-Brasil Climate Policy Associate Researcher and co-author. “There are a number of international good practices that can and should be incorporated concerning decarbonisation of the energy mix, improving efficiency and leveraging smart integration of decentralized power into the grid.”

“Our research shows that Brazil could act to change its energy mix and move toward a lower-carbon economy, but we need to strengthen them to remain a climate leader amongst key players such as China, the US, and India,” said Oswaldo Lucon, lecturer at the University of São Paolo’s Energy and Environment Institute and co-author.

The country anticipates approximately $500 billion USD to be invested in energy infrastructure over the next decade - how Brazil chooses to allocate those funds can either lock in carbon-intensive infrastructure or advance Brazil’s position as a leader in the low-carbon economy.

“In contrast to many other major emerging economies, Brazil’s energy mix has become more carbon intensive as a result of droughts, regulatory stalemates, infrastructure investments predominantly on fossil fuels and road transport, subsidies and tax breaks that encouraged unsustainable patterns of consumption, and lack of innovation favouring obsolete practices and technologies,” explained Rachel Biderman, Director of WRI-Brasil. "Some 70% of those investments are going to be allocated on fossil fuels according to current plans."

Bridging the Gap finds that Brazil can reverse this trend. With nearly half of Brazil’s energy-related GHG emissions now coming from transportation, the report finds that Brazil can make significant reductions by tapping its vast renewable energy potential (especially on wind and solar), modernizing its vehicles, and encouraging mass electrification and hybridization of its transportation fleet. Such efforts would not only make a major contribution to Brazil's mitigation efforts, they would also deliver health co-benefits to its citizens and increase the livability and competitiveness of its cities.

“Following the present trends, within 20 years Brazil will use up all of its remaining carbon budget. The fact that other countries may also have carbon deficits does not excuse the country from its common responsibility,” warned Lucon.

The report provides important insights for short-term decisions that can have strong repercussions over many decades and should be considered in infrastructure investments. The current economic crisis and water stress can become drivers for innovative thinking, shaping Brazilian policies and taking the country back to its position as a global leader in the low carbon economy.

Historically, deforestation and land use change have been the biggest source of emissions in Brazil, but fossil fuel energy emissions surpassed agriculture in 2012 and is expected to become the main source of Brazilian emissions in the near future. With the right policies, Brazil can greatly reduce its energy-related GHG emissions while improving energy security, mobility, health, and economic competitiveness.

Read the full report: