💨 Dirtier energy

Happy Friday! Today, why Brazil seems to have relied less on clean energy. Lula attends the G7 Summit. And a surge in asylum requests in Brazil.

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Clean energy sources lose ground in Brazil

Brazil likes to brag about its clean energy matrix. But while the use of renewable sources is much more prevalent in Brazil than elsewhere in the world (89 percent against a world average of 28 percent, according to government data), the country has progressively relied more heavily on “dirty” energy sources.

• The findings stem from a study by Fiemg, the federation of industries in the state of Minas Gerais, which blames the trend on a choice to abandon new hydroelectric power plant projects. 

• Fiemg chairman Flávio Roscoe says hydroelectric plants were “unfairly demonized as if damaging to the environment.” He defends the construction of new projects as a way to guarantee continuous supply in the country.

 Why it matters. Solar and wind power have gained ground in Brazil. However, they suffer from intermittency problems, not always being able to consistently produce energy at all hours of the day. Hydroelectric plants, meanwhile, can produce constant power output.

But, but, but … Hydroelectric plants are not harmless. In areas of Brazil that were purposefully flooded to create vast hydroelectric reservoirs, the surrounding natural environment was drastically transformed: the climate changes, fish species disappear, animals flee, and trees rot. 

• A recent study found that filling reservoirs, switching turbines on and off, and opening and closing spillway gates cause sudden environmental changes. These activities affect the availability of oxygen and other gases in the water, as well as water level itself, which can lead to fish death.

• What’s more, the construction of these massive lakes often involves displacing thousands of families.

Belo Monte. The case of the Belo Monte Dam, in the state of Pará, is a textbook example of the environmental impacts of building major hydroelectric complexes. Satellite images over the region capture the choking of the so-called “Big Bend,” which was a broad river valley interwoven with river channels. Most of the Xingu River’s flow now bypasses the Big Bend, essentially killing biodiversity in the area.

More risks. Hydropower is heavily exposed to the effects of climate change. Brazil in 2021 faced a water crisis, which turned into an energy crisis. Power bills shot up as the country switched on heavily polluting coal plants to compensate for the underperforming dams.

Lula in the G7

President Luiz Inácio Lula da Silva is in Italy for the G7 Summit and will hold bilateral talks with India’s Narendra Modi, France’s Emmanuel Macron, Turkey’s Recep Tayyip Erdoğan, Germany’s Olaf Scholz, and Italy’s Giorgia Meloni. 

 Why it matters. Brazil is presiding over the G20 this year, and Lula wants to take every opportunity to showcase the country as a global power and a place investors should be looking fondly toward. 

Yes, but … Lula will be more of a secondary figure in this year’s summit — unlike when he was invited to the summit last year and 14 years prior. In the 2000s, Brazil was a growth juggernaut that was making strides in reducing poverty. 

• Last year marked Lula’s return to power and Brazil’s reappearance on the global stage after being shunned during the Jair Bolsonaro years (2019-2022).

• This time around, Lula will have to compete for attention with the geopolitical scenario in Europe — with the Russia-Ukraine War and the recent advances made by the far right in the European Parliament elections in the background.

• Moreover, the Brazilian president continues to make statements that sound shocking to many Western powers — from comparing the Israeli government to Nazi Germany or saying just this week that Russia’s Vladimir Putin and Ukraine’s Volodymyr Zelenski “are liking the war” or else they would be negotiating.

The big picture. Lula may give the impression that he is going off script too much and talking himself into trouble, but that is unlikely to be the case. The president believes the world is growing increasingly multipolar and that Brazil must not be overly committed to one of these poles, hence his nods to China, the BRICS group, and Russia.

• In this week’s BRICS foreign minister meeting, Brazil’s Mauro Vieira again defended a reform of global governance institutions — saying “the world has collectively failed to overcome hunger and poverty.” He added: “A tipping point in global warming is looming, and conflicts and humanitarian disasters are proliferating.”

• For some observers, the invitation to this G7 Summit is a way the West has found to force the Brazilian president into taking a more moderate position.

A refugee crisis in Brazil’s busiest airport

Hundreds of asylum seekers have camped in the São Paulo-Guarulhos International Airport — mostly Indian nationals but also people from Vietnam and Senegal. According to the Federal Police, 205 people have set up camp; federal prosecutors cite more than 400 asylum seekers.

 Why it matters. Prosecutors call the situation a “new humanitarian crisis,” as the migrants are enduring precarious conditions and need urgent action from migration offices.

• Back in 2022, Brazil saw a similar situation as hundreds of Afghan asylum seekers camped for months in Guarulhos Airport.

State of play. The National Committee for Refugees (Conare) granted a record 77,193 people refugee status last year, elevating the total number of refugees in Brazil to 143,033 — 117 percent more than in 2022.

• Out of more than 58,000 asylum seekers in 2023, about half (29,467) were from Venezuela, while more than 11,000 were from Cuba and more than 3,900 from Angola.

• Asylum seekers in Brazil are usually young; 80 percent are aged 39 or under.

The immigration issue. Data from 2021 showed that there were 1.3 million immigrants in Brazil, less than one percent of the total population. And while the issue is by no means central to the country’s politics as it is in major economies, it has gained space in public debates in Roraima, Brazil’s northernmost state.

• Roraima borders Venezuela and was the source of more than half of all asylum requests. During the 2020 municipal elections, many conservative candidates in the state campaigned on an anti-Venezuelan platform — and attacks against immigrants became more frequent.

• Two years later, the far-right President Jair Bolsonaro — a public opponent of Venezuelan President Nicolás Maduro — won the most votes in Roraima by a large margin in the presidential runoff election, outstripping eventual winner Luiz Inácio Lula da Silva by a 76-24 margin.

Quick catch-up

Social Security Minister Carlos Lupi believes budgetary laws have turned Brazil into a de facto parliamentary democracy. Controlling the now-oversized congressional budget earmarks is more important than holding any cabinet position, he said in an interview.

Senate President Rodrigo Pacheco said he may propose that the government use money from fines issued by regulatory agencies to compensate for the loss in revenue created by extending payroll tax exemptions for 17 sectors. Congress this week repealed a presidential decree changing the tax credit system that aimed to create new revenue.

 The Brazilian real gained 0.72 percent against the U.S. dollar on Thursday, after Finance Minister Fernando Haddad and Planning Minister Simone Tebet committed to curbing public spending.

Amazon announced a deal with Vrio, the parent company of DirecTV Latin America and Sky Brasil. Amazon wants to use low-orbiting satellites to provide internet connectivity to seven Latin American countries, including Brazil, and compete with Elon Musk’s Starlink.

Bruno Mars will perform at an invite-only concern in Brazil. Only fans who have donated to the relief efforts in Rio Grande do Sul, a state hit by destructive floods, will be allowed to attend.

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