Opinion – Marcos Mendes: Rude environmental arguments have justified transfers to the rich

Since the government abandoned the job of barring tortoises in Congress, it’s amazing how easily lobbies are getting their proposals passed. Nobody questions. Everyone swallows superficial justifications, without ballast with reality. It has become fashionable to use the argument of environmental preservation to justify the unjustifiable.

In the column of April 8, I warned that the so-called “Program to Increase the Productivity of the Highway Fleet in the Country – Renovar”, announced with the objective of exchanging old trucks for new ones, through public subsidy, would be a trojan horse to make possible, later on, , subsidies for the exchange of passenger cars.

Two months later, on June 8, Valor Econômico ran the headline “Old car pollutes 23 times more than a new one, says Anfavea”. The article reads that this is “one of the arguments that the industry has taken to several ministers to convince the government to expand the fleet renewal plan to cars, which has begun to be prepared for trucks.”

How does anyone in their right mind have the courage to advocate spending public money to subsidize consumers to trade their car for a zero? Does this have any priority in an impoverished country where hunger is on the rise?

The environmental appeal of the proposal is laughable. It is evident that there are other more urgent environmental agendas, such as the containment of deforestation. There are also several options to combine environmental preservation and poverty reduction, such as basic sanitation. Soon this subsidy to the automobile industry will be a priority in the public debate.

Even more agile have been the mill owners. In ten days they managed to get a PEC into Congress, find a congressman willing to sign it and see it approved in the Senate by 72 votes to zero. No votes against!

This PEC 15/2022 amends article 225 of the Constitution, which deals with the principles of environmental preservation, to establish a permanent tax benefit for biofuels, on the grounds that they are less polluting than fossils. There is no calculation, no number, no objective evidence to justify the fact that the entire Brazilian population will transfer income to biofuel producers.

Just half a dozen paragraphs citing the “Paris Agreement”, “emissions targets”, without any comparison of the costs and benefits of this policy option with those of other emission reduction instruments.

This same sector managed to approve, in 2017, the Renovabio Program. Under the argument that it mimicked a carbon credit market, an obligation was created for fuel distributors to buy certificates (CBIOS) in proportion to their sales of fossil fuels. Certificates are sold by biofuel producers.

This is not emissions trading. In such a market, different economic sectors are given emission targets. The company that makes an effort, and manages to emit less than its target, can sell the surplus to the one that preferred to emit more.

Everyone incurs costs: the company that has invested to reduce emissions spends money on it. The company that had to buy more credits also spends on it. It is a cost-benefit analysis of each company that will make the decision to reduce emissions or buy the right to emit more.

The market works to keep total emissions within the limit allowed by law and, at the same time, allocate emission rights to companies that value them the most, and that pay for them.

At Renovabio, it has already been defined a priori who will sell the credits (biofuel producers) and who will buy them (distributors, who will pass the cost on to consumers). There is no market mechanism arbitrating the reorganization of production. The mill owners always win.

Renovabio is nothing more than a “Bolsa Usineiro”, whose cost makes up the final price paid at the fuel pump. Despite all the mobilization to reduce fuel costs, not a soul is questioning such a program.

These things are not only being approved by the Centrão. Everyone is voting in favor. Including the “third way” and the left, which are not ashamed to approve subsidies to capital. Then they make emotional speeches about Brazil’s scandalous inequality and the lack of resources to serve the poor.