Brazil’s road to a low carbon economy
In recent years, a new phrase has entered the public consciousness – the low-carbon economy.
There is a consensus across almost all the world that there must be a reduction in carbon emissions and less reliance on fossil fuels if global warming is going to be stopped.
This shift to a low-carbon economy is also going to create numerous business opportunities for many countries.
And owners of property in Brazil will be pleased to hear that the country is likely to be at the forefront of these efforts.
Brazil already has a strong record for renewable energy generation and, according to Bloomberg, was one of the top ten countries in the world for investment in green electricity.
Now, a new report by the World Bank, entitled the Brazil Low-Carbon Country Case Study, has claimed that the country will form an integral part of the world’s movement to a more sustainable economy. This is good news for Brazilian property owners.
"Without Brazil playing a prominent role, it is difficult to envisage an effective solution at the global level, given its importance in setting political agendas," the report explained.
The report lays out a scenario whereby Brazil will be able to reduce its greenhouse gas emissions (GHG) by up to 37 per cent between 2010 and 2030.
Importantly, it will be able to achieve these ambitious targets while still meeting its goals for development and without a negative impact on jobs or economic growth, which could happen in some countries.
As more people and businesses look to focus on the green credentials of countries, there are also likely to be many competitive advantages for a country like Brazil which is able to make an effective transfer to a low-carbon economy.
"Countries that pursue low-carbon development are more likely to benefit from strategic and competitive advantages, such as the transfer of financial resources through the carbon market, new international financing instruments, and access to emerging global markets for low-carbon products," the report explains.
Advantages to come out of this for owners of property in Brazil are likely to be reduced pollution and congestion in urban areas and improved waste management.
However, an area which was identified as needing to be improved was Brazil’s record of deforestation. Although this has improved in recent years, the World Bank said that further work may still need to be done.
One of the reasons why Brazil has so much potential for the creation of a low-carbon economy is its previous investments in renewable energy sources.
The report identified that hydropower already represents more than three-quarters of installed electricity generation capacity.
Brazil’s size means that if it generated its electricity based on the same percentages as the rest of the world, emissions from the energy sector would be twice as high as they are currently.
"The energy and transport sectors in Brazil are, thus, already widely based on low-carbon alternatives and current efforts to keep the energy matrix clean must be acknowledged," report stated.
All this is positive for the Brazilian property market, as more and more savvy investors are looking to place their money in green and sustainable industries.
F&C’s latest question of the month survey shows that nearly 75 per cent of investors would consider joining an ethical investment trust, which shows interest in the worldwide low-carbon economy is increasing.
Penny Shepherd, chief executive of UKSIF – the sustainable investment and finance association, said: "Given this opportunity to combine financial with social and environmental goals, we fully expect demand for green and ethical investments to increase over the next few years."
