The Brazilian economy benefits when the climate agenda is treated as an ally of growth—not as an obstacle.
Brazil is experiencing a structural tension between two agendas that, although complementary, frequently clash: accelerated economic development and climate change mitigation. In a country with high inequality, significant social needs, and a strong reliance on resource-intensive sectors, urgent economic priorities often conflict with environmental goals and international commitments, such as the global effort to limit warming to 1.5°C, as the IPCC indicates.
The federal government and the states maintain some clear economic development priorities. Among them is the expansion of national infrastructure, considered essential to reduce logistical costs and strengthen the competitiveness of agribusiness and industry. Expanding oil and gas production, which still accounts for a significant share of public revenue and the trade balance, is also a priority. Furthermore, the country has sought to boost the construction industry as an engine for job creation, as well as encourage industrialization in sectors such as fertilizers, renewable energy, and technology. In parallel, there is interest in modernizing the electricity sector, expanding railways, and integrating production hubs to attract foreign investment.
These priorities translate into concrete policies. The New Industry Brazil program, for example, aims to recover the country’s industrial capacity through tax incentives, targeted credit, and encouragement of innovation. The Ecological Transformation Plan, while including environmental components, also reinforces strategic mining, hydrogen production, and energy infrastructure. There is also the PAC (Growth Acceleration Program), which resumes major highway, railway, and sanitation projects. In the oil sector, the policy of auctioning new pre-salt blocks and expanding refineries confirms the continued reliance on fossil fuels as an economic pillar. In agribusiness, programs such as the Plano Safra (Harvest Plan) expand credit for productive expansion, though with incentives that favor sustainability over traditional intensification.
This set of policies directly impacts Brazil’s capacity to reduce emissions. Agribusiness, despite being highly productive, still faces structural problems of illegal deforestation and extensive management. The expansion of oil and gas activities creates a paradox: while generating income and investment, it deepens dependence on fossil fuels in a world moving towards decarbonization and infrastructure projects. Although necessary, increased emissions from transportation and construction put pressure on the country’s ecological balance. The combined effect of these factors makes it more difficult to meet climate commitments, especially in the land-use sector, which accounts for the largest share of Brazilian emissions.
This tension helps explain recent changes in the political prioritization of the climate agenda in Brazil. In times of economic crisis, unemployment, or inflationary pressure, mitigation tends to lose ground to projects with quick financial returns. The perception that climate policies can “delay” growth persists in parts of the productive sector and among political leaders. However, increasingly frequent extreme weather events, such as floods in the South, droughts in the Amazon, and heat waves, are slowly altering this scenario, demonstrating that ignoring mitigation also brings high economic costs.
Despite the conflicts, there are possible paths to bring development and emissions reduction closer together. The Amazonian bioeconomy offers an economic alternative that generates local income while preserving the forest, with product chains such as açaí, Brazil nuts, vegetable oils, and biocosmetics. Other opportunities arise in the expansion of distributed solar energy, which reduces costs for families and businesses and strengthens the regional economy. The electrification of public transport, already underway in cities like São Paulo and Curitiba, improves mobility, reduces local pollution, and decreases emissions. Investments in low-carbon agriculture, such as integrated systems and the restoration of degraded pastures, which increase productivity while causing less environmental impact, also stand out.
Brazil’s challenge is not to choose between development and mitigation, but to build a strategy that allows both to go hand in hand. The Brazilian economy benefits when the climate agenda is treated as an ally of growth, not as an obstacle. With proper planning, integrated policies, and the right incentives, the country can transform its environmental advantage into a global competitive advantage.
This post was submitted by Climate Scorecard Brazil Country Manager, Carlos Alexandre de Oliveira.