March 20, 2008
Sugar and Oil: Learning the Right Lessons from Brazil
by Andrew Jager
Part one of a two-part series
At times it seems I'm surrounded by things Brazilian: Bossa Nova is pumped out of speakers at clothing stores; caipirinhas are on the menu at the local bar, and there's a Brazilian film playing at the cinema up the street. Even environmental writers and energy pundits talk about Brazil's success in substituting ethanol - a biofuel derived from sugarcane in Brazil and corn in the United States - for gasoline and freeing the country from its previous dependence on imported oil. But the odds are that in a few short years cars in the U.S. will be more likely to fill up on Brazilian gasoline than ethanol.
If environmentalists are serious about embracing biofuels as an alternative to gasoline, they must be equally serious about building policy that emulates Brazil's successes, as well as efficiently addresses the problematic elements of ethanol as fuel.
In the United States, the focus on renewable and clean energy has, perhaps belatedly, become a major focus of political campaigns and industry public relations announcements. Television commercials, sponsored by major oil companies, tout industry commitment to green technology. News reports speak of "green collar jobs." Dinner party conversations turn to the viability of ethanol as an alternative to gasoline. While ethanol in the United States is used almost exclusively as an additive to gasoline, in Brazil cars that can run on ethanol alone are quite common. However, the recent discovery of a major offshore oil field in Brazil raises questions about the place of petroleum in the Western Hemisphere's second-largest economy.
AN INVESTMENT IN TECHNOLOGY
After the oil shocks of the 1970s, which created disarray and hyperinflation in the country, Brazil's military government pursued a policy that sought to free the country from its dependence on foreign oil. Though the program, known as Proálcool ('álcool' is the Portuguese term for ethanol), wasn't initially popular, by the 1990s ethanol had become a feasible alternative to gasoline. As the price of oil continued to escalate, persistence had paid off. While the United States, which also reeled from the 1970s oil shocks, had largely abandoned such fuel-saving measures as Corporate Average Fuel Economy (CAFE), Brazil had invested years of research and treasure into developing oil independence. As a paper that São Paulo Secretary of the Environment, José Goldemberg, co-authored correctly points out: "Leaving a technology on the shelf, unlike a fine wine, will not make it better."
Undoubtedly, there were some bumps along the road. Besides the massive initial investment, which many argue would have been difficult to pass had it not been for the dictatorial control of the Brazilian military, there were difficulties convincing Brazilian consumers to switch from petroleum- to biomass-based fuels. Resistance to ethanol, however, was short-lived; by 1983, nine out of 10 cars sold in Brazil ran on ethanol, and the popularity of the program, which provided heavy subsidies to sugarcane-based ethanol producers, was ever increasing. However limitless ethanol's appeal may have seemed there were yet some major obstacles to be overcome. In 1989, José Sarney, one of the first civilian rulers in more than 20 years, responded to IMF pressure and hyperinflation by cutting price supports for ethanol. Consequently, "sales of ethanol cars plummeted and some Brazilians felt the entire experiment had been a waste" according to a 2006 Wall Street Journal piece.
Today, despite the setbacks, Brazil's ethanol program is largely considered to be a success. It has certainly achieved the military leaders' initial intention, as Brazil has, in recent years, become self-sufficient in energy. Today the program is the envy of oil-dependant nations, including the United States, and is seen as a viable strategy for cutting greenhouse gas emissions and the resultant climate problems. Delegations from numerous countries, including one led by U.S. Senator Hillary Clinton, have made visits to the ethanol-processing plants, located mostly in the Southeastern Brazilian state of São Paulo. Further, as the scope of the impending climate crisis becomes more apparent, more focus has been placed on the successes of Proálcool, as a recent PBS documentary narrated by the smooth voice of Morgan Freeman makes abundantly clear.
However, ethanol will not save us from the crisis of global warming alone, despite lofty speeches by politicians looking for even heavier subsibidies for their corn-farming constituencies. In fact, ethanol as a fuel presents some real dilemmas: increased demand for biofuel inputs, such as sugar cane and corn, drives up prices for other commodities, which in turn incentivizes farmers to plow over more land - often in sensitive areas such as the Amazon - to plant crops for which they will reap greater profits. Between September and December of last year, 2,500 square miles of Amazonian rainforest came down, according to the Brazilian Minister of the Environment Marina Silva. "The economic reality is that [increases in commodity prices], without a shadow of a doubt, affect the forest," Silva said. Such land-use changes are obviously damaging to efforts at limiting the worst results of climate change. However, even when the land-use does not cause miles and miles of tropical rainforest to go up in smoke, the effects are quite serious. A recent study has quantified the result, in terms of greenhouse gas output, of bringing fallow land into production. An unsophisticated account of this process goes essentially like this: existing vegetation and soil act as a carbon safe, which is released into the atmosphere when land is cleared. Even when the crop planted is a biofuel input, the benefits of reduced carbon emissions take many decades - in some cases well over a century - to break even.
This isn't to say that efforts to develop biofuels have been for naught. Rather, the hope is that current biofuels will lead us to "second generation" fuels, which would utilize waste products or be grown on wastelands, such as switchgrass on hillsides and algae in deserts. Research must be continued - indeed expanded - to quickly retool energy production and break the link between energy and carbon.
The crisis of global warming is so vast in scope that we will need to look for answers wherever they appear. Brazil's success with ethanol is a promising example of what human intelligence and government investment can produce. However, any claim that Brazil is moving toward a carbon-neutral society should be seen for what it is: simply not true.
Fewer commentators have been willing - or aware, as may be the case - to point out that Brazil's ethanol efforts, while certainly important, are not likely to solve Brazil's numerous environmental - much less social - problems. In a January 2008 column, the New York Times' Roger Cohen discussed that while ethanol, as a fuel, is a wonderful thing, its rise has failed to lift workers from poverty. Further, Brazil has serious land management problems, epitomized by the decades-long struggle with the Landless Workers Movement (Movimento Sem Terra, MST). Currently, much of Brazil's sugarcane crop is planted in the developed farmlands of the Southeast. As researchers work to discover a way to untangle the "Gordian knot" that sees energy generation and greenhouse gas output linked, policy makers must deal with the fact that biofuel inputs are driving increased deforestation, particularly by acknowledging the link between such unsavory phenomena as Amazonian deforestation and urban poverty.
Andrew Jager, a contributor at the Breakthrough Institute, holds an MA in Latin American, Caribbean and Iberian Studies. He is a writer and research analyst based in Albany, California.