March 18, 2008
Sugar and Oil: Learning the Right Lessons from Brazil
by Andrew Jager
Part two of a two-part series
(Part one published Tuesday, March 18)
MIXING WATER AND OIL
Though Brazil has become self-sufficient in energy terms, sugarcane-based ethanol has not been the only factor. Petrobras, state-sponsored oil giant, has also increased oil production rather dramatically. As recently as 1991, Brazil produced an average of 670,000 barrels of oil per day . By 2006, that number had jumped to nearly 1.8 million barrels per day
Significantly, Brazilian President Luiz Inacio "Lula" da Silva has stated that Brazil would not "pull back even more millimeter" from its biofuel programs despite recent discoveries of massive offshore crude oil reserves . This is, of course, good news for supporters of biofuels. However, it must be noted that at the same time Lula said that "Brazil would obviously participate in OPEC ." Clearly, Brazil intends to become a petroleum exporter. However the story does not end there. One must keep in mind that Brazil's demand for energy has been steadily increasing, and is likely to do so for many years. Add to this Brazil's reliance on hydroelectric power generation, and the fact that electricity has occasionally been scarce in recent years, and it seems likely that Brazil will not only export oil, but consume more domestically as well.
If the recent United Nations Climate Change Conference in Bali didn't produce much in the way of binding agreements, it did sound the alarm for the future of the Amazon forest, the source of most rivers in Brazil's extensive hydropower generation network. This network suffered recent crises, leaving much of the country in the dark and bringing industry to a grinding halt. In 2001, a drought caused Brazil's rivers to run low and led to an energy crisis in which power rationing was imposed.
The U.N. Intergovernmental Panel on Climate Change Fourth Assessment Report warns that rivers with sources in the Amazon are likely to become less reliable in coming years. Particularly, the eastern Amazon is at risk from continued deforestation. As forest is cleared, soil moisture levels decrease, shifting precipitation patterns not only in the Amazon basin, but throughout Brazil. A continuation of current rates of deforestation is likely to result in the lush tropical forests of the eastern Amazon becoming savannah . Such a change would dramatically shift rain patterns throughout the country, making the world's most productive agricultural regions far less reliable. A tragic shift of this sort would lead not only to a food crisis for South America's most populous country; it would also cause a dramatic cut in the production of sugarcane - a crop that requires abundant water - and therefore ethanol.
This scenario, while already worrisome, becomes more troubling in the light of a recent report on the Amazon forest's ability to absorb greenhouse gases. The results of a 20-year study by US and Brazilian scientists show that the ability of the Amazon to function as a "carbon sink" may be decreasing. Areas of the forest, left as control areas in the study and therefore untouched by human activity, demonstrated that an increase in greenhouse gases has led to trees growing - and dying - faster than before. According to study author William Lawrence, "Increases in forest carbon storage may be slowed by the tendency of the canopy and emergent trees to produce wood of reduced density as their size and growth rate increases, and by the decline of densely wooded sub-canopy trees. " The Amazon's days as Earth's lungs may be marked.
ALIGNMENT OF INTERESTS
Brazil's newfound energy independence is clearly a sign that long-term investment can produce real results. One hopes the recent parade of delegations to the country's ethanol refineries come away with lessons that they can then adapt to the situations of their respective countries. The magnitude of the coming global warming crisis is such that humanity must harness every bit of technological development and inventiveness to move us away from fossil fuels and the resultant greenhouse gases. However, the proper response to Brazil's success with biofuels would be to understand the massive investment in research and development that propelled the country to energy self-sufficiency. Instead, American elites have sought to emulate the outcome while, out of ideological rigidity, ignoring the role of government investment in the very outcome they seek to copy. The idea is not to disparage market forces. Rather, we must simply recognize that large-scale technological changes - whether we speak of the laying of infrastructure for electrical transmission or the development of the internet - are always the result of major government investment.
Despite the promise of the open arms Rio de Janeiro's famous Christ the Redeemer statue, Brazil can no more be expected to singly resolve the global warming crisis than can the United States, Australia, China or any nation. Actually, as a 'developing' country with far more limited power and financial resources than the United States and others, its progress has already been disproportionate to the seat afforded Brazil at the table in such organizations as the IMF or World Bank. While countries like the United States and Australia have soundly rejected international agreements such as the Kyoto Protocol, Brazil has managed to mesh its interests with renewable fuel. There is an important lesson to be learned here, However, one must not forget the alignment of interests and advancement in biofuels: Brazil (or other 'developing' countries with ambitions of high standards of living and economic development, such as China) will also use its newfound petroleum wealth to advance its interests, whatever increases in greenhouse-gas output this may entail.
What is imperative is that we find suitable ways to drastically reduce greenhouse gases (80 percent cuts in coming years are thought to be necessary to halt the worst effects of global warming), particularly by breaking the link between energy generation and carbon output. Had the United States stuck with a serious research program - backed up by equally serious research funding - who knows what technologies may have been discovered. Politicians and average people alike now see that national interest is not aligned with the interests of OPEC, for example. Clearly, we can not go back to the past and fund research retroactively, but nor can we expect easy answers from Brazil - a country with deep and longstanding socio-economic problems it must address. The emergence of Brazil as a player in the international petroleum market should serve as an adequate reminder. However, there is a lesson we must take from Brazil's experience: we must force government to fund a serious, committed research effort to develop ways we break the connection between energy generation and carbon output.
Andrew Jager, a contributor at the Breakthrough Institute, holds an MA in Latin American, Caribbean and Iberian Studies and has conducted extensive research on socioeconomic problems in urban Brazil. He is a writer and research analyst based in Albany, California.