Remarks by Angel Gurría,
Brasília, 4 November 2015
(As prepared for delivery)
Dear Ministers, dear Ambassadors, ladies and gentlemen,
I am delighted to present the first ever OECD Environmental Performance Review of Brazil. And, I would like to take this opportunity to thank you, Minister Teixeira, for your excellent collaboration in bringing this project to fruition.
As the world’s most biodiverse country, Brazil is blessed with both the responsibility to protect - and the opportunity to benefit socially and economically from - its abundant natural capital. Moreover, Brazil has long played a leading role in the global dialogue on sustainable development, from the Rio Summit in 1992 to Rio+20 two decades later.
Next month, of course, we will have a once in a generation opportunity to secure a lasting and binding global agreement on climate change at the COP 21 in Paris. We are on a collision course with nature. We need to reach an ambitious yet credible agreement that puts us on a path that keeps the rise in global temperatures to below 2oC, the globally agreed target.
For its part, Brazil has already had significant success in reducing emissions, and has committed to further reducing them to 37% below 2005 levels by 2025. Notwithstanding Brazil’s significant progress in greening its economy, however, it still has plenty of homework. With this in mind, let me share with you some of the main messages from our Environmental Performance Review.
Minister Teixeira has been instrumental in initiating and backing key pieces of environmental legislation. While this is already a major achievement, there are three ingredients to the success of these reforms: implementation, implementation, and implementation!
Policy ambitions need to be backed up by sufficient financial and human resources, as well as effective coordination across all levels of government. Brazilian states and municipalities have many environmental responsibilities, but their capacity and resources vary widely across the country. Many subnational governments struggle to fulfil their mandates. Environmental impact assessment and licensing are often excessively cumbersome, leading to delays in green infrastructure projects.
This is an area where the OECD can help. Our recent report Water Resources Governance in Brazil is a prime example of how we are providing concrete advice on how to tackle this challenge of multi-level governance in environmental policy.
As home to the Amazon, the world’s largest rainforest, it is no surprise that our Environmental Performance Review takes a close look at the deforestation challenge, where Brazil has had notable success. Slashing the Amazon deforestation rate in four in the past decade has helped Brazil reduce greenhouse gas (GHG) emissions by 40% since 2000.
This has come about as a result of first-class satellite imaging monitoring systems, strengthened enforcement and the extension of protected areas over thousands of square kilometres. But above all, it is the consequence of a resolute whole-of-government effort that brought the fight against deforestation into other sectoral agendas.
Having said that, Brazil still this highest annual forest loss in the world. This means that a forest area the size of the state of Sergipe is lost every four years! There remains a challenge to ensure that sustainable forestry and farming can provide a decent income to rural communities so that these activities are more attractive than illegal logging and land clearing.
The 2012 Forest Code and the nearly 2000 protected areas are crucial weapons in the fight against deforestation. Coming back to that key ingredient, implementation, it is only through full enforcement that the Forest Code can achieve the twin objectives of agricultural development and forest conservation.
Effectively managing protected areas that extend over a surface nearly three times the size of (metropolitan) France (1.5 million km2) is a herculean task. Implementing the code is a matter of financial and human resources, of course, but also of leveraging private investment and unleashing the economic potential of protected areas, for instance as destinations for eco-tourism.
Identifying ‘triple win’ policies – that contribute to social and economic as well as environmental goals – is one of several important contributions of the Environmental Performance Review. A good example is investing in water, waste and public transport infrastructure. As also pointed out in the OECD’s 2015 Economic Survey of Brazil, however, there is a need to cut red tape, encourage private investment and improve administrative capacity so as to deliver infrastructure projects, especially at local level.
Brazil is lucky to have a low-carbon energy mix: about 80% of its electricity is generated from renewable sources, mainly hydropower - the highest shares among BRIICS countries. Ethanol accounts for 17% of fuels used in transport, by far the highest share in the world, and most cars are flex-fuel (i.e. can run on both ethanol and petrol). In 2013, Brazil was already the world’s 7th largest investor in renewables! Further tapping renewable, as well as other ‘green markets’ – like sustainable forestry and reforestation, eco-tourism and expansion of recycling – could contribute up to 7% of GDP!
Greening the economy is not just about environmental policy. Fiscal policy can play a role too. Green taxes in Brazil are less than 2% of total tax revenue, less than half the OECD average, while excise taxes on petrol and diesel are still far below international averages. As we also point out in the 2015 Economic Survey, raising them, and introducing other ‘green taxes’ – such as on emissions of pollutants, waste, fertilisers and pesticides – can improve fiscal and environmental sustainability at the same time. Now this is why our report welcomes the increase in fuel taxes, Minister Levy.
Ladies and gentlemen,
No doubt, this is a challenging moment for Brazil. At the same time as we recognise the great strides the country has made since the turn of the century, we cannot ignore the pressing environmental, social and economic challenges that remain. On the environmental front, I am confident that the analysis and 53 recommendations contained in the Environmental Performance Review will be an important contribution to the policy debate here.
We also hope to partner with Brazil on implementation. In the context of the OECD-Brazil Programme of Work, launched yesterday with Minister Vieira, we hope that the OECD can contribute for many years to come to the design, development and delivery of better environmental policies for better lives.