Brazil may stop being a ‘pariah’ and become a green ‘leader’, says Arminio Fraga

Economist and former president of BC (Central Bank) Arminio Fraga assessed this Friday (17) that Brazil has a green vocation and the capacity to lead sustainable and low-carbon initiatives, but, for that, it will have to “reinsert” in the environmental context.

At an event in the city of Rio de Janeiro, the founding partner of Gávea Investimentos stated that the country was in a “very fragile” position on issues related to the environment in recent years.

“Brazil has everything to be the great leader in this area [com a vocação verde]. We’re going to have to reinsert ourselves. It’s no secret that our position in the world has been very fragile,” he commented.

He complemented the assessment by saying that the country has a chance to leave an “almost pariah” position and capture sustainable investments.

“It’s an opportunity, to transform an almost pariah situation into a leader situation.”

Since 2019, Brazil has become the target of a series of criticisms due to the posture of the Jair Bolsonaro (PL) government in the environmental area. The disputes occur amid the advance of deforestation indicators in the Amazon.

Arminio participated in an event organized by Banco Santander at the Museum of Tomorrow, in downtown Rio. The meeting was named “Rio, the capital of green investments in Brazil”.

In addition to addressing the possible attraction of sustainable contributions to the capital of Rio de Janeiro, the event sought to indicate national challenges in the environmental area.

The panel with the presence of Arminio discussed the scenario for the carbon market in Brazil. The debate on this sector dominated the COP26, the UN Conference on Climate Change, held between the end of October and the beginning of November.

In this market, a country that exceeds its goal of reducing greenhouse gas emissions will be able to trade the surplus with a nation that is unable to meet its goal. The intention is to decarbonize the planet.

Carbon is a simplified way of calling the emission of gases that cause global warming. The most common of them is CO2 (carbon dioxide).

The panel with Arminio was also attended by federal deputy Marcelo Ramos (AM), author of a project that seeks to regulate the carbon market in Brazil.

The congressman, who spoke through a video call, defended the advance of the proposal as a way to generate environmental benefits for the next generations, in addition to economic incentives.

“The premise is that this is no longer a choice for Brazil. It is an imposition,” he said.

The municipal secretary of Finance and Planning of Rio, Pedro Paulo, was also one of the panelists. He said that the capital of Rio de Janeiro is studying tax benefits for the development of sustainable businesses.

The president of Santander Brazil, Sergio Rial, was one of the first names to speak at the meeting organized by the bank.

The executive defended the advance of sustainability policies in the country. In his view, one of the trends that gained momentum in the pandemic was the ESG agenda, which stands for defining governance, environmental and social practices.

“Rio is Brazil’s gateway and vision for the world. Designing Rio with this vocation is important for Brazil,” he said.

Mayor Eduardo Paes (PSD), who also attended the opening of the event, mentioned that the natural characteristics represent one of the attractions of the capital of Rio de Janeiro, both for those who want to live and for those who intend to invest in the city.

Paes spoke of incentives to make Rio “the capital of green investments in Brazil and the world”.

“We will make every effort to create the necessary incentives and exemptions so that we can consolidate Rio de Janeiro as the capital of green investments in Brazil and in the world,” he promised.

The BC’s director of International Affairs and Corporate Risk Management, Fernanda Guardado, was responsible for closing the event.

In his speech, he said that the environmental agenda requires a broad set of actions. “It is time for all actors to unite in this agenda, which still has a lot to go forward,” he stated.

The director also recalled that climatic shocks can affect the economy and, consequently, the performance of the monetary authority.

In 2021, for example, extreme phenomena, such as the water crisis and the record of frosts, helped to raise food prices in Brazil. Thus, they generated additional pressure for inflation, which reached double digits in the country and is far from the target pursued by the BC.