Sign up to receive the latest news from Brazil for free with a myFT Daily Digest email every morning. The Minister of Finance of Brazil discusses the challenges faced by the country and the efforts made to address them. Initially, after the appointment of the new government, Brazil experienced a downturn in its economy, with slowed growth, alarming debt trends, and high real interest rates. Additionally, there was a need to reorganize the social structure of Brazilian society following an attack on its democratic institutions. However, the country has embarked on a cycle of reforms aimed at restoring confidence in democratic solutions to economic and social challenges.
Looking forward, Brazil is now focused on an ambitious and comprehensive plan for ecosystem transformation. The country has already emerged as a leader in the green economy, with a significant percentage of electricity coming from renewable sources and a considerable amount of native vegetation still intact. However, meeting the commitments of the Paris Agreement has proven challenging, and Brazil aims to achieve a net-zero economy by 2050. While decarbonization and diversification away from fossil fuels may present costs, they also provide opportunities to create jobs, increase incomes, and improve the lives of millions of Brazilians.
The new vision for Brazil includes greener infrastructure, sustainable agriculture, reforestation, a circular economy, increased use of technology in production processes, and climate adaptation. The country is committed to sharing its experiences and supporting other nations in implementing green transitions. The approach differs from the American Inflation Control Act, as Brazil’s policies are a mosaic of regulatory and tax measures approved by Congress in a gradual and focused manner.
One of the landmark measures is the carbon market, which follows the procedures of the EU Emissions Trading System and applies to all production units emitting significant carbon. Revenue generated from this market will be used for research and development, with a focus on protecting indigenous and traditional communities and redistributing benefits. Forest protection is also a priority, with strengthened management and monitoring systems, forest concessions to private partners, and improved environmental standards for agricultural financing.
Brazil welcomes foreign investors interested in decarbonization and clean innovation to help accelerate the country’s development. Productivity, innovation, and environmentally friendly practices will be crucial in reducing emissions and creating investment opportunities and high-quality jobs. The government has implemented strong fiscal rules and reforms to address budget deficits, ensuring a solid financial and regulatory foundation to support these plans.
The efforts of the Brazilian administration have already shown positive results, with a significant reduction in deforestation. The ultimate goal is to achieve strong economic growth, social change, and environmental protection, allowing Brazil to improve its position in the global economy. As the G20 Presidency approaches, Brazil is eager to reaffirm its leadership in sustainable and inclusive development.