Brazil and the challenges to funding climate initiatives

Despite a noticeable overall progress, socio-economic improvements tend to favor large urban areas over rural spaces and indigenous communities. With substantially less funding directed towards the latter, little socio-environmental progress has been reported in smaller regions, including indigenous people’s lands, the Amazon and other local economies that depend upon agriculture for survival. The investment gap in Brazil is causing massive delays in mitigation plans, particularly in the sector(s) of transportation and ecosystem/biodiversity management. The national budget for climate change has been reduced by almost 40% since 2019, while the National Climate Change Fund, initially dedicated to eliminating illegal deforestation, pursuing renewable energy alternatives and reforesting the Amazon, has thus far spent unreasonably small amounts for facilitating such changes. With the national budget decreasing, less money is directed towards climate change; donors of the Amazon Fund have paused their investments under the new government structure (since 2019).

Unfortunately, limited funding affects the entire Global South, with an estimated investment gap of $2.5 trillion. Low-carbon technologies and climate-resilient actions will continue to be out of reach, unless investments are significantly increased; implementation of policies for tackling climate change have brought a marginal, at best, outcome.

Such are the challenges addressed by the three guest speakers invited to discuss issues around financing in their video contributions for the project 'Brazilian Voices on the Road to COP26', by the Environment, Energy and Sustainability Research Cluster at King’s Brazil Institute. They point to specific areas of concern in the Brazilian context and to key discussions at COP26 that may define the next decades.

Luciana Ziglio, researcher and specialist in waste management, kicks off the video series by drawing attention to the recycling industry, pointing out that 11% of the methane generated worldwide comes from the urban solid waste sector. Ziglio, however, focuses on the often-overlooked role performed by recyclable material waste pickers, a category that is crucial for recycling efforts in Brazil and Latin America, in general. This provides an example of the kind of global to local connection that must be considered and planned for at COP26, as well as the socially inclusive strategies that must be employed in the financing of actions against climate change.

Another topic discussed is energy transition. Brazil's power generation mix is already mostly based on renewable energy sources - about 84% - due to the country's heavy long-term investment in large hydropower plants. That investment, however, has been proving to have a number of shortcomings, two of which stand out. The first concerns the environmental and human rights issues brought about by the construction of dams, ranging from environmental degradation that compromises entire biomes to the appropriation of indigenous lands. The second concerns the changes in rain patterns, likely due to climate change and deforestation in the Amazon, which are causing increasingly frequent water and, consequently, energy crises. The solution is to push for further diversification of the country's energy and power generation mix through the use of other renewable sources.

As explained by Elbia Gannoum, the executive president of the Brazilian Association of Wind Energy, until the beginning of the 2000s, hydropower plants represented about 90% of Brazil's power generation mix (10% came from thermoelectric sources). However, the years of 2005 and 2006 saw the first investments in wind power, mainly through the introduction of technology developed in Europe, and it now represents 11% of the country's mix. According to Gannoum, the sector has been attracting considerable foreign investment, but needs more investment to keep growing at the current pace. That highlights one of the main discussions in climate financing, which is private investment in green technologies and the active role the private sector must play if we are to limit global warming to 2 degrees.

Private sector involvement, however, is not always that clear cut, as shown by the discussions on carbon crediting mechanisms. Natalie Unterstell, president of Instituto Talanoa, a Brazilian think-tank dedicated to climate policy, brings us the negotiations on Article 6.4, pointing to issues around defining how projects carried out by private actors will be accounted for in the national emissions tally. The Brazilian government has held a rather controversial position on the so-called corresponding adjustments, which are aimed at avoiding potential double-counting of carbon credits that private actors may eventually sell to companies of other countries so that they can reach their targets. Unterstell highlights the fact that, despite the official government position, not adding corresponding adjustments to the national emissions balance is far from a consensus in Brazil.

Finally, Unterstell raises the crucial issue of climate justice, including financing for developing countries and the Warsaw Mechanism for Loss and Damage. She points out that increasingly frequent disasters caused by extreme weather makes us have to adapt not only to future projections, but to deal with current losses and damages. Developed countries have an obvious responsibility, as they emitted more and started sooner when compared to the rest of the world, but discussions around financing are always hard. A country like Brazil could help negotiations, but it has been going through rollbacks of its own Nationally Determined Contribution (NDC) and environmental policies, as deforestation drives away international support and funding. Unterstell sees COP26 as an opportunity for developed countries to offer good-will gestures, so that we can leave Glasgow with believable and respectable results for all countries, specially the poorest ones.

About the authors

Ana Borges Pinho is a PhD Candidate in International Relations at King’s College London and the University of São Paulo. Ana holds an MSc in Development Studies from the London School of Economics and Political Science, is an Erasmus program alumnus (University of Glasgow), and a fellow of the Center on Philanthropy and Civil Society at the City University of New York. Ana has extensive experience working for international and grassroots NGOs in a variety of roles. She interned at Amnesty International (London), was a knowledge management coordinator at philanthropy network WINGS, and a parliamentary research assistant for Baroness Bull (representative at the House of Lords), helping inform evidence-based policymaking.

Ioanna Fotiadis is a recent graduate from the London School of Economics and Political Science (LSE), with an MSc degree in Environment and Development. With a keen interest in climate negotiations and climate action in the Global South, she is currently assisting CLOSER in launching the “Brazilian Voices on the Road to COP-26” project. 

Video contributions

Dr Luciana Ziglio is a research professor at the Latin American Faculty of Social Sciences (FLACSO/Brazil). She completed a post-doctorate in organizations and sustainability (EACH/USP), and holds a PhD in human sciences and human geography from the University of São Paulo. Among others, Luciana is a researcher at the Political Geography and Environment Research Group (GEOPOL-USP) and the Center for Research in Organizations, Society and Sustainability (NOSS/EACH/USP) at University of São Paulo. She is a member of the Organization for Women in Science for the Developing Word, a UNESCO program as well as of the Alliance of World Scientists. Luciana’s teaching and research covers the themes of political geography and waste, and socio-environmentalism from the perspective of political geography.

Elbia Gannoum is the CEO of ABEEólica – Associação Brasileira de Energia Eólica and Vice-chair of GWEC (Global Wind Energy Council). At the head of ABEEólica for a decade, she has been working towards the strengthening and sustainable growth of wind energy, the second most important source of the Brazilian energy mix. An active voice in the global debate on diversity and economic inclusion in the energy sector, she defends the idea of Brazilian energy transformation and has been contributing strongly to the development of renewable energies. She recently co-founded the Energy of Transformation Platform – a collaborative platform to share, inspire and drive initiatives and actions for diversity and social inclusion in the energy sector, highlighting the role of women in STEM areas. In 2019, she received the "C3E - Clean Energy Education & Empowerment - Woman of Distinction Award". C3E is an international initiative of the Clean Energy Ministerial and the International Energy Agency. Since March 2020, Elbia has become a global ambassador for Brazil in the Women in Wind Global Leadership Program (GWEC-GWNET), designed to accelerate women's careers in the wind industry. Elbia is an economist, with more than 20 years of experience in the energy sector. She has accumulated experience at CCEE, the Ministry of Mines and Energy, the Ministry of Finance and ANEEL.

Natalie Unterstell is the President of Instituto Talanoa, a Brazilian think-tank dedicated to climate policy. She has a master's degree in Public Administration from the John F. Kennedy School of Government at Harvard University and a BA in Business Administration from Fundação Getulio Vargas (EAESP-FGV). She has worked in the federal and state governments, where she supported the construction of public policies, including the most ambitious program of adaptation to climate change ever carried out in the country, Brazil 2040, as the director of the SAE/Presidency of the Republic. She was also Brazil's negotiator on climate change issues at the UN and Assistant Secretary of the Brazilian Forum on Climate Change (FBMC). Natalie is a member of the Green Climate Fund's Accreditation Panel and is a co-founder and member of several projects and organizations, such as Política Por Inteiro. Active in social media, she is a columnist for Revista Época and a frequent columnist and commentator in the national and international press.