GREEN GROWTH: FROM RELIGION TO REALITY - Sustainia

Chapter 8ing years increasingly from biodiesel. Table 1 belowshows the changes in Brazil’s energy supply from 1940to 2009 by source. Overall domestic energy supply rosefrom about 23 million toe in 1940 to 243 million toe in2009. Concomitant with growth in the domestic supplyof energy, production grew among all sources of energy.The use of petroleum in Brazil has steadily increasedover time, but the substantial rise in production of sugarcane products (ethanol, biomass) and the generation ofelectricity from dams have reduced petroleum’s overallshare in the energy matrix. The growth of sugar caneand hydroelectric energy production was especially highbetween 1970 and 1980, when the 1973 OPEC oil shockinduced Brazil’s military dictatorship to reduce nationaldependence on imported oil.20Table 1 also illustrates the changing shares of eachsource of energy in Brazil’s energy matrix. The share ofpetroleum in total domestic supply peaked in 2000 at50.9%, and has since fallen marginally to 46.6% in 2009.21 Meanwhile the share of hydropower has risen substantially,from 1.5% in 1940, to 9.6% in 1980 and 25.2% in2009. Much of this is consumed as electricity. At the sametime, sugar cane products (ethanol and biomass from bagasse)have increased their share from 2.4% in 1940 to8% in 1980 and 18.2% today. This changing balance betweenrenewable and non-renewable sources of energyover time makes Brazil an impressive case of energy systemstransition.This section will focus its analysis on three importantand growing renewable energy sectors: ethanol, biodiesel,and hydropower.4.2 EthanolEthanol is Brazil’s signature biofuel, and its productionand consumption both within Brazil and abroad aregrowing due to the advent in 2003 of flex-fuel cars inBrazil (which can run on any combination of petroleumbasedgasoline and ethanol), and to world demand forrenewable energy sources. Though Brazil’s sugar canebasedvariety of ethanol may reduce GHG emissions byup to 92% (from production to burning), sugar cane requiresland on which to grow, and extension of farm landdevoted to sugar cane may directly worsen deforestationrates in Brazil’s Atlantic forest, as well as indirectly increaseAmazon deforestation by displacing other cropsand cattle ranching in coastal regions and the Cerradotoward the Amazon.Ethanol is widely considered to be a carbon-efficientfuel when compared to petroleum because it burns morecleanly than oil and is extracted from crops, the next generationof which re-absorbs some of the carbon emittedfrom the burning of the previous generation. Studies indicatethat Brazil’s sugar cane-based ethanol is especiallyadvantageous, reducing GHG emissions up to 92% perliter of ethanol when compared to one liter of petroleumbasedgasoline (measuring life cycle emissions of eachfrom production to burning). The U.S.’s corn based-ethanol,by contrast, only reduces carbon emissions by 19-47% (La Rovere et al. 2011, 1031). In addition, at aboutArea of sugar caneMillions of Hectares per year12Area Planted109,78645,63,94,3 4,6 4,8201,92,61975 1980 1985 1990 1995 2000 2005 2009Figure 4: Area of sugar cane planted in Brazil, 1975-2009(MAPA 2010)Source: MAPA 2010. (Ministero de Agricultura, Pecuaria e Abastecimento,Anuario Estatistico de Agroenergia,http://www.agricultura.gov.br/arq_editor/file/Desenvolvimento_Sustentavel/Agroenergia/anuario_agroenergia/index.html#)US$23/liter in 2005, Brazilian ethanol is more efficientto produce than sugar cane-based ethanol produced inother leading countries, such as Thailand and Australia(Nassar 2009, 70). Part of these advantages lies in climaticconditions, and part is due to the fact that all ethanoldistilleries in Brazil power the production of ethanol byburning their own sugar cane bagasse, rather than fossilfuels – which reduces their own energy costs as well asnet carbon emissions (Hofstrand 2008; Nassar 2009, 71).State support (including subsidies and the creation ofa domestic market through minimum ethanol-petroleumblending requirements in gasoline) since the implementationof the Pro-Álcool Program in 1975 has enabledthe sugar cane-based ethanol industry to grow andthrive, and there are currently 434 ethanol distilleries inoperation in Brazil (IPEA 26 May 2010, 14). Productionis driven both by high domestic and global demand: In2007, Brazil exported 185 million gallons of ethanol tothe U.S. and produced just under 6 billion gallons for domesticconsumption (Hofstrand 2008).22Furthermore, if environmental laws in the coastal AtlanticForest areas are not effectively enforced, ethanolproduction may lead to higher rates of deforestationthere in the coming decades.However, as land area in Brazil dedicated to sugarcane farming for ethanol grows to meet domestic andworld demand for biofuels, other crops and cattle ranchingmay be displaced toward the Cerrado and Amazon,which may indirectly worsen GHG emissions from Amazondeforestation by increasing competition for landthere (McAllister 2008b, 10,876). Furthermore, if environmentallaws in the coastal Atlantic Forest areas arenot effectively enforced, ethanol production may lead tohigher rates of deforestation there in the coming decades.Figure 4 (below) shows the growth in the land area de-20 Today, most of Brazil’s petroleumis produced domestically,though some light petroleum isimported from elsewhere to mixwith Brazil’s heavy crude in therefining process (Sennes and Narciso2009, 33-34).21 Petroleum’s share may rise inthe coming decades as Brazil beginsto explore its recently discoveredpre-salt oil fields.22 For an extended discussion ofthe development of Brazil’s ethanolindustry, see Appendix 2.92