Lula tries to expand oil and rainforests as Brazil prepares to host climate summit
Sign up now: Get ST's newsletters delivered to your inbox
The Brazilian government is advancing the goals of increasing protected areas and creating a new economy in the Amazon.
PHOTO: REUTERS
Follow topic:
A climate champion calling for more oil. A rainforest defender greenlighting a highway through a pristine part of the Amazon. A promoter of a new Brazilian bioeconomy who accommodates the old beef industry.
These are the tensions that will define the climate legacy of Brazil President Luiz Inacio Lula da Silva, host of the COP30 UN summit, which will start after a preliminary gathering of world leaders
Mr Lula, who plans to run for a fourth term in 2026, insists there is no contradiction: Drilling for oil is essential to fund the country’s energy transition, and commodity-driven agriculture networked by roads can coexist with forest preservation.
But his current term in office – and now as de facto organiser of the most important climate talks – risks clouding his claim to environmental leadership on a global stage.
Mr Lula’s flagship initiative to pay for forest conservation
He has faced distracting fallout from Brazil’s deadliest single-day police raid in Rio de Janeiro
As with any Conference of the Parties (COP), there is danger that a lack of consensus could prevent a positive outcome. Even Mr Lula’s decision to locate COP30 in Belem, a city with limited hotel rooms
Mr Lula himself, like thousands of other participants, is staying on a boat during the two-week summit.
In his remarks in Belem before dozens of world leaders and other national representatives on Nov 6, Lula highlighted Brazil’s progress while hinting at its complications.
He said: “Accelerating the energy transition and protecting nature are the two most effective ways to contain global warming.
“I am convinced that, despite our difficulties and contradictions, we need roadmaps to justly and strategically reverse deforestation, overcome dependence on fossil fuels and mobilise the necessary resources to achieve these goals.”
Mr Lula’s efforts at climate diplomacy yielded some results on Nov 7, when Brazil succeeded in getting the European Union and China to join a coalition aimed at improving collaboration on carbon markets. And initial investment in the rainforest fund had also reached US$5.5 billion, according to the Brazilian government, halfway to the new US$10 billion target.
But in another sign of the trade-offs between climate and economics, Mr Lula also announced on Nov 7 that Brazil will create a fund to finance the energy transition using part of the profits from oil exploration.
That move comes just weeks after Brazil’s state-controlled energy company, Petroleo Brasileiro, received approval to explore for oil near the mouth of the Amazon River.
When Mr Lula attended COP27 in Egypt in 2022 as president-elect, he was greeted like a hero. To cheering crowds, he declared that “Brazil is back” and vowed to bring the world’s most important climate talks to the Amazon.
It was a sharp contrast to his predecessor Jair Bolsonaro, who withdrew Brazil’s bid to host COP25
Three years later, Mr Lula has just celebrated a 50 per cent drop in Amazon deforestation compared with the Bolsonaro years, when forest loss hit a 15-year high fuelled by weakened environmental enforcement and policies favouring agribusiness.
The COP30 delegates from nearly 200 countries descending on Belem, the capital of the Amazonian state of Para, are adjacent to a rainforest that has reached its third-lowest deforestation rate since records began in 1988.
As in much of the world, climate and environmental issues rank low among the Brazilian public’s top concerns, lagging behind issues such as crime, economy and health. Local indigenous and environmental movements depend on international alliances for funding and visibility.
But a survey conducted by AtlasIntel for Bloomberg News found that more than 70 per cent of Brazilians believe they will be affected by climate change in the next 10 years.
The country remains split over priorities: 51 per cent said that Mr Lula should favour environmental protection even if it slows economic growth, while 49 per cent believe the economy should take precedence.
Economic expedience defined the previous government.
In his remarks in Belem before dozens of world leaders and other national representatives on Nov 6, Brazil President Luiz Inacio Lula da Silva highlighted Brazil’s progress while hinting at its complications.
PHOTO: REUTERS
Mr Lula inherited what Dr Suely Araujo, policy coordinator at the Climate Observatory, a network of environmental and academic organisations, described as a “scorched-earth scenario”, with Brazil’s environmental oversight dismantled.
There has been real progress, she said, and a large boost to funding for projects to cut planet-warming emissions through the Climate Fund, which is managed by Brazil’s development bank BNDES.
Since Mr Lula took office, there has been 19 billion reais (S$4.6 billion) in approved projects for renewable energy and forest restoration, compared with just 1.6 billion reais from 2019 to 2022 during Bolsonaro’s term.
Yet Mr Lula’s environmental credentials are under attack at home.
The Climate Observatory has sued the federal government over two controversial projects: a plan to open new offshore oil fields near the ecologically sensitive mouth of the Amazon River, and the paving of the 900km BR-319 highway cutting through largely untouched rainforest.
Despite his claim that Brazil can lead as a global example, he faces domestic scepticism. According to the AtlasIntel poll, 56 per cent of Brazilians disapprove of Mr Lula’s performance on environmental and climate issues, while 35 per cent say he is doing a good job.
Political observer Carlos Melo, coordinator of Insper Political Observatory, said: “Mr Lula has this ambiguity.
“At the same time he signals towards preservation, he does not compromise on a more accelerated pace of growth based on fossil energy.”
Mr Lula’s environment minister, Ms Marina Silva, upholds the banner of the government’s grand goals in the face of the President’s mixed record.
“Obviously, we all live with contradictions, and these contradictions are being managed,” she told reporters in early October.
Since a major discovery in 2006, oil has come to sit at the heart of Brazil’s economy – a characteristic shared by the Azerbaijani and Emirati hosts of the most recent UN climate summits.
Crude became the country’s top export for the first time in 2024.
Daily production broke 4.3 million barrels a day for the first time in October. The chief executive of the state-owned oil giant known as Petrobras, Ms Magda Chambriard, has echoed US President Donald Trump’s “drill, baby, drill” slogan.
Most Brazilians do not oppose offshore oil drilling off the Amazon coast. According to the AtlasIntel survey, only 31 per cent said Petrobras should not explore the region under any circumstances.
Mr Lula has repeated that oil revenue from the Amazon will finance the shift to renewables and that Petrobras will eventually become an energy company, rather than focusing on fossil fuel.
Dr Araujo dismisses these claims.
She said: “The opening of new areas will take time, and we cannot wait 10 or 20 years to invest in the transition.
“Oil production will only worsen the very problem the energy transition is meant to solve. It is not even an environmental issue, it is a matter of logic.”
It means an additional challenge for the success of climate talks in Belem, especially as the US under Mr Trump is withdrawing from the Paris Agreement
There is a power vacuum that Mr Lula might not be capable of filling.
“The world lives in a leadership crisis,” Insper Political Observatory’s Professor Melo said. “Brazil is relevant on the environmental front, but it is not one of the most relevant political players.”
While Mr Lula’s government touts its success in reducing deforestation, Brazil’s main source of greenhouse gas emissions, critics warn that these gains could unravel under any future administration aligned with Bolsonaro’s approach.
Environmental activists want Mr Lula’s government to secure any gains against the threat of reversals.
Mr Beto Verissimo of Imazon, a non-profit based in Belem, calls for officially designating 63 million ha of unclassified public forests in the Amazon – an area roughly the size of Ukraine – as conservation units or indigenous territories.
Without that, he warns, these lands will remain open to illegal deforestation and land grabbing.
Conservation needs to be backed by an economy that values standing forest. That can primarily be achieved by boosting the carbon market, Mr Verissimo added, since it is the most viable alternative to cattle ranching, which has accounted for 90 per cent of all deforestation in the Amazon over the past four decades.
Working out these mechanisms is one of the questions perpetually hanging over COP talks.
“We have a problem of emissions and low productivity,” Mr Verissimo said. “Carbon (markets) can be a key part of the solution, bringing money to the Amazon at a time when Brazil itself cannot finance this transition on the scale required.”
Activists like Mr Verissimo have concluded that the BR-319 highway, which Mr Lula promised to start paving in 2026, is an unstoppable project with strong backing from local politicians. That is an indicator that the balance of power still tilts towards the old economy of deforestation, which typically happens along roads.
“These two agendas are in direct competition,” Mr Verissimo said.
“The government is concerned about deforestation and tries to tighten controls on one side, but infrastructure projects keep the pressure on the forest.”
Progress to rein in the impact from roadways has been slow. Mr Lula’s government has pledged to make Brazilian beef fully traceable by 2032, a key measure to prevent cattle raised on deforested land from entering the supply chain.
But the timeline is long, and another federal programme meant to collect environmental data from farmers and ranchers remains voluntary.
“It is very difficult for any government to box in the sector, given its political and economic clout,” said Imaflora executive manager Marina Guyot. Imaflora is a private sustainability group that recently launched its own deforestation-free beef certification.
While bowing to pressure from agribusiness and its allies in Congress, Mr Lula’s government is advancing the goals of increasing protected areas and creating a new economy in the Amazon. Since 2022, his administration has set aside about 17 million ha – roughly the size of Florida – for the creation of protected areas, according to Mr Andre Lima, secretary of deforestation control at the Ministry of the Environment and Climate Change.
Mr Lima acknowledged that Brazil’s bioeconomy, based on resources that keep the forest standing, will not be fully consolidated within Mr Lula’s four-year term.
But signs of progress are already visible, with new technical assistance programmes for forest restoration and the creation of targeted credit lines for green projects that Mr Lima said increased “from millions to billions” with help from BNDES.
Agriculture Minister Carlos Favaro sees any contradictions as a sign of the government’s pluralism, often encouraged by Mr Lula himself before he makes a decision.
“It is a fact that there are divergences within the government,” Mr Favaro said in an interview in late October. “I am not saying it is a fight. I am saying there are differences in position, and that is healthy.”
Mr Favaro argues that no country in the world is as advanced as Brazil when it comes to the energy transition.
The main source of electricity in Brazil is hydropower, which accounts for more than half of total generation, according to data from the International Energy Agency.
Solar and wind power have also grown over the past decade, while biofuels account for a third of the energy mix.
“It’s not only the environment that matters,” Mr Favaro said. “When we talk about sustainability, we also have to look at the economic and social sides.”
Within the government, the agriculture minister represents the sector that pollutes the most in Brazil. In anticipation of criticism from environmentalists during COP30, he is ready to flex the sector’s muscle.
Mr Favaro said: “We are open to discussing the evolution of global livestock commitments.
“But no one comes here to bad-mouth Brazilian agribusiness and leaves without a response. I will be the one to stand guard over that.” BLOOMBERG
