Brazil Must Not Follow Chile into Climate Suicide

by | Apr 5, 2022 |

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At the end of March, Alok Sharma, President of the 2021 United Nations Climate Change Conference, visited Brazil to thank the government for, among other things, the announcement of its 2030 climate action plan and long-term strategy for “net zero” by 2050. While it is understandable that a UN official would think these actions are laudable, Brazilian citizens have nothing to be thankful for as the country begins its slide toward climate suicide. 

Let’s take a closer look at what has happened in Brazil of late.

A decade ago, Brazil was named one of the world’s best-emerging economies. Plenty of foreign companies came to do business in Brazil, buoyed by a commodities boom and increased family consumption. Playing host to both the football World Cup (2014) and the Olympic Games (2016) did not hurt Brazil’s attractiveness either.

Government support may have lifted more than 30 million people out of poverty during this time, but the sporting stages generated controversy, especially around how much it actually cost. Government budget deficits are up to 10% of economic output, up from around 3% in 2013. That, in turn, impacts doing business in Brazil.

It’s not all doom and gloom, though. Brazil’s consumer confidence is climbing, with households more optimistic about inflation, unemployment, personal income, their own financial situation, and debt. And following the impeachment of then-president Dilma Rousseff in August 2016 for breaking budget laws, President Michel Temer of the centrist Brazilian Democratic Movement Party set out to restructure the economy. 

After almost three years of economic recession, the Brazilian economy is now slowly heading towards recovery, and interest rates are decreasing.

Yet, doing business in Brazil remains notoriously complicated. Brazil is still considered a developing nation, and its consumer base, regulatory environment, and sphere of investment are not as mature as those of developed nations. The reform of the laws and regulations for opening and running a business in Brazil has not adapted at the rate with which the economy has grown, presenting many hurdles to overseas corporations.

Brazil ranked 125th out of 190 countries in the World Bank’s latest annual global report, which evaluates the ease of starting a business, dealing with construction permits, registering property, and paying taxes. On average, it takes 11 procedures and around 90 days of work to start a business in Brazil – though this used to be almost 120 days – and construction permits demand an average of 20 procedures and 404 days to finally get authorized.

While Brazil is among the world’s leading investment destinations and is formally a well-functioning business environment, corruption and bribery are still serious obstacles. The federal structure of the political system means there is a wide range of regulatory agencies, which can lead to demands for bribes from public officials. In 2016, Brazil was ranked 76th in Transparency International’s corruption perception index, and organized crime is also a significant problem in some parts of the country. Credit risks in Brazil are growing, and insolvencies are forecast to again increase as financial conditions in the market tighten. 

Brazil’s tax regime is one of the driving forces behind its complexity. More than 90 taxes, duties, and contributions are charged in Brazil, and all taxes are based on different government spheres of federal taxes, state taxes, and municipal taxes. 

Being on the world stage for the football World Cup and the Olympic Games pushed the Brazilian government to improve the country’s infrastructure, auctioning road, railway, and airport concessions as well as cutting financial transaction tax on several major projects. Yet, the build was fraught with controversy, and according to the World Economic Forum, Brazil still ranks a dismal 107 out of 144 countries in the level of infrastructure development. 

Brazil has been hampered by a lack of technology during its development; however, there are concerted efforts to improve this. Indeed, many technology start-ups have grabbed the headlines of late, and large corporations have also pledged a commitment to the economy; Microsoft invested $100 million in Rio de Janeiro in the lead-up to the Olympics. Smart technologies are already being implemented in Brazil to: manage the use of resources in cities, facilitate the movement of people, improve emergency services coverage, and make shopping more efficient. Big data, security and surveillance, risk assessment, and 3D modeling are seen as the big opportunities in tech.

Unions have a lot of influence in Brazil. Although their achievements have led to a more developed labor market, it is easy to fall prey to Brazil’s labor laws, which are set out in 900 articles and are difficult to navigate. Non-compliance can lead to fines and a soured reputation.

When it comes to Brazil’s position on climate change, they are one of the most strident in falling in line with the socialist efforts to rid the country of its use of fossil fuel. And it appears things are going to get even worse unless Brazilians rise up to oppose this trend. Our guest on our America Out Loud Talk Radio weekend radio show, The Other Side of the Story, will be Rafaella Nascimento. She is one of Brazil’s leading activists trying to educate the nation’s children and adults about the outstanding benefits of increasing carbon dioxide in opposition to the fraudulent claims that this beneficial gas is going to have a negative impact on the environment.

Rafaella works with the news platform Canal PHVOX and Instituto Intelectos, an organization created to promote education in Brazil to demystify the radical environmental narrative, including those related to the Amazon and climate change. 

Brazil is at a crossroads such that, without the strong efforts of activists like Rafaella, the country’s progress will be brought to a screeching halt. Join us at AmericaOutLoud.com on Saturday or Sunday, April 9 and 10 at 11 am or 8 pm to hear about yet another country America must learn from if it is to avoid climate suicide.

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Dr. Jay Lehr is a Senior Policy Analyst with the International Climate Science Coalition and former Science Director of The Heartland Institute. He is an internationally renowned scientist, author, and speaker who has testified before Congress on dozens of occasions on environmental issues and consulted with nearly every agency of the national government and many foreign countries. After graduating from Princeton University at the age of 20 with a degree in Geological Engineering, he received the nation’s first Ph.D. in Groundwater Hydrology from the University of Arizona. He later became executive director of the National Association of Groundwater Scientists and Engineers.

Tom Harris is Executive Director of the Ottawa, Canada-based International Climate Science Coalition, and a policy advisor to The Heartland Institute. He has 40 years experience as a mechanical engineer/project manager, science and technology communications professional, technical trainer, and S&T advisor to a former Opposition Senior Environment Critic in Canada’s Parliament.

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