Suddenly, it seems all the world is heading to zero.
Just a month after Chinese President Xi Jinping promised to reduce carbon emissions to net zero by 2060, the leaders of Japan and South Korea pledged to hit the same target 10 years sooner. The European Union and U.K. have already put their 2050 pledges into law. In total, countries accounting for about 56 per cent of the world’s emissions have now announced or are investigating targets to eliminate their emissions by mid-century.
Looking down the list of the world’s major emitters, you might think we’ve hit a roadblock. Most of those remaining are major exporters of fossil fuels, which you’d expect to be late to the zero-emissions party.
However, a large economy is in a different place: Brazil. While the country has never promised to zero its emissions - and likely won't under its populist President Jair Bolsonaro - it would find that path far easier than most.
The first benefit of Brazil is that the electricity system was largely decarbonized a long time ago. Thanks to its huge river systems, the country is the largest hydropower economy in the world. About 64% of the electricity generated comes from dams. (1) Wind, solar and nuclear power make up a further 21% of the total. fossil fuels with almost 15%.
Even this small disc should be easier to remove than in many other countries. Brazil's abundant hydropower infrastructure means it is unusually well positioned to handle peaks and troughs in electricity demand in a 100% renewable system, and the cost of building new wind farms from scratch is already lower than fueling and maintaining existing gas - and coal-fired power plants. Like fossil-fuel generators (as opposed to wind, sun and nuclear power), dams can be switched on and off as required. If there is excess solar energy available in the middle of the day, they can even pump water uphill to release it again in the evening.
The industry will also be easier to zero. One of the challenges for emerging economies is that development in this sector is uniquely carbon intensive. Emissions from local Chinese industrial companies alone - excluding those associated with electricity consumption in factories and construction sites - account for around 8% of global fossil pollution. This process has long since proven itself in Brazil: the most intensive industrialization and construction took place in the middle of the 20th century, and as a proportion of gross domestic product it is one of the lowest in the world, in line with the USA and Western Europe.
Transport, the third large part of emissions in most countries, is also less of an upturn. In contrast to the emerging economies in Asia, where millions of people will move to cities in the coming decades, Brazil is already one of the most urbanized places in the world, with a higher proportion of the population in cities than in the UK, USA or South Korea.
Public transportation is more developed than most other countries in America, and since the oil crises of the 1970s the country has tried to use sugar cane biofuel to reduce its dependence on petroleum. Such bioethanol currently provides around a third of all road fuel.
Admittedly, this is not a carbon-free option - nor is it guaranteed any promised self-sufficiency. In recent years, Brazil has been a frequent net importer of ethanol, mostly from the US. By harnessing the country's enormous renewable potential to electrify its fleet of cars, biofuel would be released for export to other countries - and for other uses like truck and jet fuel and shipping - that will find substitution outside of petroleum more difficult.
Brazil has the most to gain in agricultural and quasi-agricultural exports. Most of its emissions come from just two activities: deforestation and livestock.
However, each of them has significant room for improvement. Brazilian beef is among the most carbon-intensive in the world. According to a study from 2011, every kilogram of Brazilian cattle raised on newly cut land causes up to 726 kilograms of CO2 equivalent emissions into the atmosphere. More established parts of the country only need about 22 kilograms of CO2, and in other countries farms need half of that, with some numbers as low as 3 kilograms.
This is mainly due to the low productivity of the Brazilian ranch. Often times, the average Brazilian cow lacks the intensive feeding systems that would make cattle in other parts of the world their main weight in a year or two. Grass-fed beef also requires much more land than grain-fed intensive cattle, especially when the latter are also used for milk production.
Encouraging the continuing trend towards intensification of livestock would also have a dramatic impact on deforestation. Brazilian emissions fell by a whopping 39% in just five years between 2005 and 2010, almost entirely due to an 80% reduction in deforestation under the leadership of President Luiz Inacio Lula da Silva. That was reversed long before Bolsonaro's election in 2018 with new forest laws, but it's an example of what can be done with the right incentives for land conservation.
According to a study from 2016, Brazilian forests that were previously deforested and naturally regenerate could save around 22 billion tons of CO2 - roughly enough to absorb the country's own emissions for half a century. However, a better idea would be to turn Brazil's abundant woodland endowment into a new export industry. A growing group of countries that have committed to "net zero" are not yet clear on where to offset gross emissions that are above the net number. Brazilian trees could offer exactly the solution. At $ 50 per tonne of carbon, the price, which restores only 1% of the country's 126 million hectares of grazing land per year, could sequester 150 million tons of CO2 and make it a more valuable export industry
than beef.
Such a change will not take place as part of Bolsonaro's slash and burn policy. The Brazilian opposition is currently bitterly divided ahead of the 2022 presidential election, and poor forest management is often a bipartisan issue - since Silva's left-wing successor Dilma Rousseff bears as much responsibility for the return to deforestation as Bolsonaro.
As my colleague Clara Ferreira Marques wrote, selfish reasons are still the best way to get Brazil to join the group of net zero countries. Failure to protect its forests has put the free trade agreement between the European Union and the South American Mercosur bloc on hold. Bolsonaro ultimately did not pursue an election campaign threat to pull Brazil out of the Paris Agreement, and the powerful agribusiness bloc in Congress can be surprisingly pragmatic on such issues. The dynamics of the climate could be the catalyst to drive trade, while an early seat at the table would give Brasilia the opportunity to make global climate deals to maximize their own economic benefits from decarbonization.
Brazil could be a big winner in the world when it comes to CO2. It is high time you took this opportunity.
(1) Hydropower plants can emit significant amounts of greenhouse gases when plants decompose. However, these are concentrated in the early years after construction, and the majority of Brazilian hydropower plants were built in the 1970s and 1980s. With a number of new dams built in the 2000s and 2010s and now operational, the pipeline of new projects represents only a few percent of the existing installed base.
David Fickling is a Bloomberg Opinion columnist who covers commodities, industrial and consumer businesses.
Source: Bloomberg
