14 November, 2009

Brazil sets a target to reduce future carbon emissions by 2020

After months of political infighting Brazilian authorities have finally agreed last Friday to commit to a voluntary target to curb between 36 percent and 39 percent of projected emissions under a Business As Usual (BAU) scenario to 2020. It is a major political shift, although real carbon cuts could be much lower than the percentages seem to indicate.

Sergio Abranches

The major contribution to this deviation from a BAU trajectory of GHG emissions will come from reduction of deforestation and degradation, around 25 percentage points. The remaining will come mainly from agriculture, and a ban on the use of charcoal from native forest logging by pig iron mills. Contributions from the manufacturing and transport sectors will be very modest.

Real emissions reductions will depend on the baseline adopted and on the assumptions used to project the future trajectory of emissions. Part of the conflict between the so-called “developmentalists” led by Chief of Staff Dilma Roussef and the “environmentalists” with Environment minister Carlos Minc at the front was over the rate of future growth used for the estimates.

Original projections from the Secretary for Climate Change of the Environment Ministry used a yearly 4 percent average GDP growth as reference, already higher than the average economic growth of the last decade. The projections were then rerun using 5 percent and 6 percent growth averages, that seem highly unlikely to obtain in the near future. Higher growth figures tend to overestimate both the physical values and the pace of increase of emissions associated to the percentages.

Another important issue the government has yet to clear regards the emissions data used in the projections. The only official figures publicly available for emissions date from 1994. An explanation is still due for how government experts have calculated the future trajectory of emissions, without a series of actual emissions for the last 14 years.

Structural change since currency stabilization, commercial opening, and privatization have totally reconfigured the Brazilian industrial, agricultural and transport sectors. The auto industry has more than doubled output from 1994 to 2008. Commodity exports have increased dramatically. The manufacturing, transport, agribusiness, and energy industries are totally different today compared to their condition in 1994. All this structural change has deeply affected the distribution of GHG emissions among the different areas of activity.

The current coefficients for all sectors ought to be very different from those of 1994. Deforestation, for instance, averaged 20,700 sq. km for the period 1994-1996. The average for the last 3 years came down to 14,800 sq. km. The government has used an average of 19,500 sq. km to set the target of 80% reduction to 2020. This means that to meet the target, actual decline in logging will have to be far less steeply than if the government chose more recent figures as a baseline. This lower figure will, however, also contribute to lower the five-year average for the next period. The target is defined by periods using a five-year moving average.

This week the government has announced the smallest estimate for annual deforestation since measurement began: 7,000 sq. km. If this number is confirmed, and can be sustained after recession is gone, it means that half the target set for 2020 would have already been met, due to the high starting point chosen to define the goal.

Contribution of deforestation to GHG emissions was much higher in 1994, than it is today. The contribution of the transport and energy industries has increased significantly. Over the last 8 years most of the new electricity added to the Brazilian grid came from fossil fuel fired power plants.

How seriously this target will be taken by the government remains to be seen. It could well be no more than an act of electoral marketing. One of the reasons to suspect that much is that the center stage was occupied by president Lula’s appointee to run for president next year, Chief of Staff Dilma Roussef. She was clearly not at easy defending the same environmental issues she has opposed during all her tenure at the government.

To gain credibility the government has to publish, the sooner the better, the model and the data base used to project future emissions, the scenario assumptions, and the coefficients for the contribution of each sector to the reduction of emissions. Transparency and independent review of the data and projections used to set these goals will be a necessary condition for a credible commitment.

Depending on the data used for the projections, the announced policy could represent a reduction between 10% and 20% of 2005 emissions.

The final GHG emissions cut resulting from the policy notwithstanding, the fact remains it is a major political shift. After years denying any responsibility to mitigation and rejecting the idea of committing to a quantified goal, the government has finally decided to present a quantifiable and verifiable mitigation action at COP15.

Once the diplomats officially announce the target, Brazil will become accountable for it. The country will have crossed a point of no return. Whether it is legally binding or not is just a formality. Politically it will make the government accountable.

From this point onwards it will be a matter of refining and enlarging the country’s commitment. The next step will likely be for the new administration to take office in 2011 to substitute this deviation from a projection of future emissions with a target based on real emissions for a base-year, probably 2005.

The state of São Paulo, whose governor, José Serra, from PSDB, the main opposition party, is a likely presidential candidate, has already written into law a reduction of 20 percent of 2005 GHG emissions, by 2020. A far more concrete and incontrovertible goal.

This move from Brazil, together with the likely cooperative attitude from China, and depending on what the US will do could well change for the better the prospects of a meaningful political deal in Copenhagen.

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