The Folly of an Economy Going Against the Environment

From economists it is expected that they are in favour of production at any cost and against environmentalists. But it has to be the opposite. The Brazilian economy will suffer immensely if it continues the deforestation of (among others) the Amazon rainforest.

It is a shot in the foot. Export of Brazilian beef, for example, will face difficulties if the exporters are not guaranteeing the world market that the cattle did not come from deforested areas. The same problem producers will face with supermarkets, as they will require a ‘clean origin’ of the meat. Consumers also are awakening. As a consequence it is irrational, from an economic point of view, to go against the protection of the environment.

The Medida Provisória*) No. 458 (Decree MP 458), which passed Congress is foolish. It permits regularization of the lands for those who illegally invaded the Amazon rainforest. It regularizes illegality.

The confrontation between farmers and environmentalists is completely unreasonable. Even if the matter is discussed only in terms of economy, the environmentalists are right. Farmers celebrate victories that will turn against them in the future. The slaughterhouses will have to prove to supermarkets in Brazil and elsewhere that they did not buy cattle from (illegally) deforested areas.
The world is moving in one direction and Brazil running in the opposite direction with eyes fixed on the past, turning the clock back.

The debate, the proposals in Congress, the approval of MP 458, the mistakes of the government, the complicity of the opposition, show countrywide lack of understanding.
The tragedy is a multi-party action for burning down the Amazon.
Even China starts to change. In the United States, the Bush government is dumped in the trash bin of history. President Barack Obama steers the country in another direction. Presented US Congress with a set of federal parameters for reducing emissions of greenhouse gases. What was once just a Californian dream, is now the outlook for the entire country.
At a time when the environment begins to accelerate attention in the world, Brazil still thinks it can bring down the planet's largest tropical forest, as if it were an obstacle.

MP 458, now only pending presidential sanction, is worse than it appears. It is disastrous. It legalises grileiros, who illegally invaded and burned down a part of the Amazon. He, who stole 1,500 hectares before the first of December 2004 could buy it without bidding and without inspection. He has preference over the land and can pay in the most friendly way: in 30 years with three years of grace. And if at the end of the grace he wants to sell the land, the MP allows it. In three years, the property can be passed on. For up to four hundred ‘stolen’ hectares, the period is ten years. And if the grileiro stool the land and left the daily work to his labourers as he himself lives somewhere else? He has also the right to stay with it, because even if the land is run by a "figurehead" the grileiro can buy it. And if it is a company? No problem at all.

Supporters of MP 458 in the House and the Senate say it is to regularize the situation which was initiated by the Military Regime and later abandoned.
Bullshit. As the deadline to acquire land is set by the first of December 2004.
They said it was to benefit the small settlers. Bullshit. As it does allow the sale of land run by a figurehead, and the sale to corporate entities.

The bill creates indecent loopholes for privatization in the worst way of the patrimony of all Brazilians.

Former Minister for the Environment and presently senator Marina Silva said that the day MP 458 was adopted in Congress, it was her third worst day of her life. She feels as if Brazil has lost all the advances of the recent years.
It is almost impossible to agree with Marina Silva as there hasn’t been much progress shown in the last years. The Lula government has always been ambiguous in relation to the environment, and Fernando Henrique, his predecessor, kept silent. If they had shown some stature, Brazil wouldn’t have lost what it lost.
In just the first two years of the Lula government, 2003 and 2004, 51.000 km2 have been deforested. Compare this to the size of the Netherlands (41.528 km2). And many grileiros who were part of that attack at the rainforest will now be ‘regularized’.

Last week Greenpeace released a devastating report, showing that 80% deforestation of the Amazon is due to livestock. Greenpeace published the names of the perpetrators, of which Bertin, Marfrig, Friboi JBS are the largest. The Brazilian Development Bank (BNDES) is their partner and finances the ‘illegal’ operation. The mentioned companies provide meat to numerous retail chains, among them, large supermarkets as Carrefour, Wal-Mart and Pão de Açúcar.

During the Globonews’ programme ‘Espaço Aberto’, the coordinator of the study, Andrew Muggiatti met with Sussumu Honda, the chairman of ABRAS (Brazilian Association of Supermarkets). The BNDES was also invited, but did not show up.
The good news that came out of this programme was the positioning of the supermarkets. According to Sussumu Honda, they are preoccupied and will use their power to pressure the slaughterhouses to prove the origin of the cattle which meat is put on the supermarket shelves.
Brazilian meat exporters have threatened to sue Greenpeace. They should do the opposite and refuse any supplier linked to deforestation. The world will not buy Brazilian beef at this price. Exporters will face barriers. That's for sure.

The backward steps will not eliminate the external market. But that is of less importance. The tragedy is that Brazil is losing its future.
Ironically Brazil adopted MP 458 during the Week of the Environment.

This is a free translation and interpretation of an article which Míriam Leitão wrote on her blog on 05 June 2009

*) Medida Provisória In Brazilian constitutional law, a Medida Provisória (presidential decree) is issued by the President of the Republic, at his discretion, without the participation of the legislative branch. The measure has the force of law, albeit not being really a law in the strict technical sense of this term. Only in cases of importance and urgency the Chief Executive may issue decrees, which he should submit later to Congress. The decree stays in force for sixty days, extendable for another 60. After this time, if Congress does not approve it, and convert it into law, the measure will lose its force.
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World Social Forum - The final balance

The previous articles described the run-up to, the opening and the proceeding of the forum. Now the final balance.

The final balance of the World Social Forum (WSF) in Belém was positive. At least according to the organizers, the mayor of Belém and the governor of the federal state of Pará. Eventually 135 thousand people participated from 142 countries, with 15 thousand participants in the encampment and 4,830 volunteers, translators, technicians and representatives of the organizers.

The governor of Pará, Ana Júlia Carepa emphasized the positive influence of the forum on the economy of the state. (I had expected that, as a socialist, she would highlight the results of this ‘human’ forum, but no, the true socialists: only money counts). She stressed that in Great Belém 40 million reais (€ 13.5 million) was spent, of which 18 million for housing, 16 million with meals and 6 million with transport. According to the governor “the choice of Belém could not be at a more opportune moment, because here in Pará we demonstrate that it is possible to construct a new development model for Pará and the Amazon. We feel one with these hundred thousand people, who believe that another world is possible and in the name of this ideal, we have built our government. In the name of this ideal, we work to transform Pará into a constitutional state.” (If you know Ana Júlia and her political results, you get weak knees listening to these words.)

But the official view is not shared by the university students, who made their appearance to the lecture-rooms on Monday after the forum. Kyone Oliveira, 18 years, of the faculty Zootecnia, says she is shocked by the state the campus is in after the forum. “They have polluted everything and then go away. I thought, that it would go this way, that’s why I have not participated. Neither my university nor the city of Belém has the infrastructure to organize a forum like this. If we as students already suffer from poor toilets, think of all those people. They improved only the roof of the lecture-room and now they say that everything is in order.”

The day after the World Social Forum 2009 ended the two campuses that hosted the event showed significant differences. While the campus of the Federal University of Pará (UFPA) was clean and quiet, on the campus of the Federal Agriculture University of the Amazon (UFRA), you could observe the mess, the stench and the dissatisfaction of the participants.

After the forum many students said they had a ........ continue reading and see more images of the event

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An irreversible trend - It's the economy, stupid!

In Brazil energy products derived from sugar cane were responsible for 16% of the total energy supply in 2007, holding the second position in the total of consumed energy, surpassing for the first time hydraulic power, which supplied 14,7% last year, according to preliminary data released in the balance by the Empresa de Pesquisa Energética (EPE), Brazilian’s Energy Research Company. The fossil-oil and derivatives remained in first place as an energy source, with a 36,7% stake.

The energy consumption rose with 13,5 million tonnes and of this more than 70% was from renewable sources. Once again, renewable energy of sugar cane grew most with 41,4%. The share of renewable energy in the matrix of Brazilian energy increased from 44,9% in 2006 to 46,4% in 2007.

The number of vehicles using bio-fuel exceeded five million in April 2008.

According to the chairman of EPE, the domestic consumption of energy, which takes into account any final energy consumption by individuals, companies and processing, grew 5,9%, more than the GDP, which advanced 5,4%. Of that total, according to him, there was an increase of fuel consumption with a 7,3%, against a 5,4% increase of electric energy, compared with 2006.

“For the first time energy supply from cane sugar exceeded hydro electric energy and became the second source of the Brazilian energy matrix, after fossil oil. I believe it is an irreversible trend” the president of EPE stated. At the end of the presentation of the energy balance of 2007 he defended the production of Brazilian ethanol, saying: “In Brazil, we have sufficient soil to increase the production of ethanol without affecting the production of food”, when asked about the criticism that the production of ethanol affects the prices of food in the world market.

Obviously so far so good. Brazil is a world example for renewable (green) energy resources, thanks to President Lula’s cuddling of his darling pet, promoting his fads and fancies with pride and little essential knowledge during all his official international visits with potential buying countries. Stubbornly fighting off his critics as even his Latin American colleagues call him a traitor.

It is a fact, the country’s emergence is partly accelerated by bio-fuels as bio-fuels have become the vanguard of the green-tech revolution. For politicians and corporations the trendy way to go as most of the damage created by bio-fuels is less direct and less obvious.
Indeed only a tiny portion of the Amazônia region is being torn down to grow the sugarcane that fuels most Brazilian cars. The shocking explosion of deforestation is a result a subtle chain reaction: Farmers in the USA are selling one-fifth of their corn to ethanol production, so US soybean farmers are switching to corn, as a result Brazilian soybean farmers are expanding into cattle pastures, so Brazilian cattlemen are displaced to the Amazônia.

Amazônia rain forest pushed back by large areas of soybean fields in the state of Mato Grosso

So far Lula’s ‘green’ positioning on bio-fuels is correct. Sugar growers here have a greener story to tell than do any other bio-fuel producers. They provide 45% of Brazil's fuel (all cars in the country are able to run on ethanol) on only 1% of its arable land. They've reduced fertilizer use while increasing yields and they convert leftover bio-mass into electricity. With the slogan: "Grain is good for bread, not for cars. But sugar is different." their trade group expects production to double by 2015 with little effect on the Amazônia.

So far, they are right. Corn ethanol and soy bio-diesel produce about twice the emissions of gasoline. Sugarcane ethanol is much cleaner, and bio-fuels created from waste products that don't gobble up land have real potential. So, obviously the Amazônia region is safe.

But take a look at the Cerrado, south of the Amazônia region, an ecological jewel in its own right.

Map of the Cerrado eco-region. The limits of the eco-region are marked in yellow.

Photo: NASA

The Amazônia gets the ink, but the Cerrado is the world's most bio-diverse savannah, with 10.000 species of plants, nearly half of which are found nowhere else on earth, and more mammals than the African bush. You can watch toucans and macaws, find puma tracks and admire a carnivorous flower. The Cerrado's trees aren't as tall or dense as the Amazônia ones, so they don't store as much carbon, but the region of some 2 million km2 (50 times the Netherlands) stores its share. Or should we say ‘stored’ its share, as it is transforming by the march of progress - first into pastures, then into sugarcane fields.

Caracteristic vegetation in the Cerrado

But also in another way sugarcane is a shady business. Sugarcane is a typical product from the slave era and that is exactly what it still is.

In 2007, the federal government freed 3.131 “sugar cane” slaves. In the same period the Brazilian Bank for Development released 3,6 billion USD for projects of the sector.

The Cerrado near "The three lakes" - Mato Grosso do Sul

Almost daily there are stories in the news papers about rescue of sugarcane labour (including children) working under - what is now euphemistically called – a “degrading situation”, but in fact is just pure and simple slavery.
But let us just have a look at one:

In March 2008 the papers headlined, after the Ministry of Labour and Employment visited the premises of a company called Brenco (Brazil Renewable Energy Company, note that this Brazilian company has an English name and you will see why):
- Workers of Brenco are living in precarious housing
- Investigating Brenco ends with 17 labourers freed and 140 “slave” contracts terminated

Brenco is commanded by the former president of Petrobras, Brazil’s giant state-owned petroleum company, Henri Phillipe Reischtul.
Brenco has, among its shareholders, the former US President Bill Clinton, James Wolfensohn, former World Bank chairman, Steve Case, former America Online (AOL)-Time Warner, and Vinod Khosla, multimillionaire Indian rooted in the United States who founded the Sun Microsystems. Not by any means the ordinary slave driver you should expect.

But the story does not end here. In August 2008 Brenco reached the headlines of the news papers another time:
The BNDES (Brazilian’s Bank for Development) releases 1,2 billion USD to deploy four units of sugar cane processing in Mato Grosso, Goias and Mato Grosso do Sul (all Cerrado states). In all, the units will install 15 million tonnes of sugar cane grinding capacity per season, producing 1,4 billion litres of alcohol. And the market could sell up to 220 MW of energy through cogeneration. The project has an estimated investment of 1,8 billion USD, with the BNDES entering with 2/3, although, the BNDESPar should get only some 15% to 20% of the shares of the venture. According to the bank, the venture will generate 8.400 jobs and will run a fully mechanized harvesting.



In regard to the “progressive social policy” of a President who was a militant union leader first, do you understand this? No? Neither do I.
But Clinton himself gave us the answer to this apparent contradiction when he was campaigning for US president in 1992: "It's the economy, stupid!"

Note:
For this post I used some text extracts from the article in Time Magazine “The Clean Energy Scam” by Michael Grunwald published March 27, 2008. The story and facts relating to slavery I took from the websites of Leonardo Sakamoto and Repórter Brasil. Both websites are worth visiting, although unfortunately they are only in Portuguese.

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