Jason Barton

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Archive for the ‘Brazil’ tag

A Recipe for Brazil’s Resurgence

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The four years I was privileged to live in Brazil, from 2002 until 2006, were a pivotal time in the country’s success. The groundwork may have been laid by Pres. Fernando Henrique Cardoso in the 1990’s (I had the pleasure of meeting him when he came to speak at the school where I was teaching), but it was during Lula’s first term (2003-’07) that the country took off. While doing my PhD research on Brazilian sugarcane ethanol production (2006-2010) there was still abundant optimism both inside and outside Brazil for the country’s economic and political future.

While it has since plateaued, the article below provides a three-point recipe for its resurgence:

1. Reform the tax code and public spending. Make taxes less burdensome and more transparent, and direct public funds toward infrastructure instead of bloated entitlements.

2. Open the economy and integrate with the rest of the world.

3. Reform the political system to diminish corruption and pork barrel spending.

In my (admittedly limited) experience, these are bang on. A colleague and I earned roughly the same salary, but he paid 40% less in taxes than I did, and no one, including experienced Brazilian accountants, could explain why. The vestiges of import substitution policies from the 1980’s have continued to hold the country back. And the politics are so dirty that one prominent politician, Paulo Maluf, continues to serve in their congress even while he is wanted by Interpol. His name has been turned into a verb, malufar, which means to steal.

Brazil is a great country populated by wonderful people, and I am grateful to have lived and worked among them. Like many countries, including mine, it needs reform.

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Brazil’s future

Has Brazil blown it?

A stagnant economy, a bloated state and mass protests mean Dilma Rousseff must change course

FOUR years ago this newspaper put on its cover a picture of the statue of Christ the Redeemer ascending like a rocket from Rio de Janeiro’s Corcovado mountain, under the rubric “Brazil takes off”. The economy, having stabilised under Fernando Henrique Cardoso in the mid-1990s, accelerated under Luiz Inácio Lula da Silva in the early 2000s. It barely stumbled after the Lehman collapse in 2008 and in 2010 grew by 7.5%, its strongest performance in a quarter-century. To add to the magic, Brazil was awarded both next year’s football World Cup and the summer 2016 Olympics. On the strength of all that, Lula persuaded voters in the same year to choose as president his technocratic protégée, Dilma Rousseff.

Read the entire article here.

Written by Jason

October 4th, 2013 at 2:48 pm

Ethanol Mills in the Amazon?

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It’s true that ethanol mills have the potential to protect forests, particularly in the Amazon region where cane producers are required by law to leave 75-80% of each plot of land forested. The question is whether or not these laws will be observed and enforced.

The Brazilian Forest Code mandates that agricultural producers do not plant crops on 75% of their land, and also leave riparian corridors and other sensitive areas fallow. These laws have traditionally not been enforced, however, as they risk causing production costs to rise, making Brazilian agricultural products uncompetitive.

Yes, ethanol production in the Amazon can create jobs, protect forests, and reduce petroleum consumption, all while localizing energy production for people who would use the fuel there in the Amazon where the cane is grown and the ethanol is milled. It will take vigilance by Brazilian citizens and media to ensure these laws are followed if this expansion of cane and ethanol production is to occur.

Reuters

Brazil Bill Seeks to Open Amazon to New Ethanol Mills

Tue, Jun 04 13:01 PM EDT

* Investors say ethanol production in Amazon economically viable

* Environmentalists fear pressure on land use

By Reese Ewing

SAO PAULO, June 4 (Reuters) – Brazil plans to vote on a bill in the coming weeks to reopen large areas of the Amazon to sugar cane mills, rekindling fears that ethanol production could accelerate deforestation and create a major marketing challenge for the country’s biofuels industry.

Environmentalists are concerned Congress’ vote could overturn a ban on cane expansion in the region that went into place in 2009 and increase pressure on land use in areas that amount to nearly a third of the broader Amazon region in Brazil.

Meanwhile, the expansion into the environmentally sensitive areas could hurt ethanol producers’ plans to open new export markets, economists say.

Read the entire article here.

Raizen and Iogen to Cooperate for Cellulosic Ethanol Plant in Brazil

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This has been a long time in coming, and is still a ways off, but is an important step towards renewable fuels from non-food feedstocks. Rather than use the sugar that has to date been the feedstock for ethanol production in Brazil, and is otherwise use as food, this process would separate the sugars in the bagasse, or the green leaves of the cane stalks, and ferment those for ethanol. Previously this bagasse was either burned in the field before manual harvest, or more recently harvested mechanically either to be left in the field to maintain soil structure or burned in the refinery to provide electricity.

The ethanol produced from cellulose in processes like this would be a tremendous leap forward in the production of renewable fuels.

Published 18 October 2012

Raízen Group, Iogen Energy to develop cellulosic ethanol facility in Brazil

Brazilian sugarcane ethanol producer Raízen and Canada-based cellulosic ethanol fuel manufacturer Iogen Energy will collaborate together to develop a commercial cellulosic ethanol project in Brazil.

The collaboration will be the first step towards commercialization of cellulosic ethanol biofuels in the country.

Continue reading here.

By Susanne Retka Schill | October 17, 2012

Engineering begins on Iogen-based cellulosic plant in Brazil

Ottawa-based Iogen Energy Corp. announced an initial investment by Raízen Group to develop a commercial cellulosic ethanol project in Brazil. Raízen, a joint venture between Royal Dutch Shell and Cosan SA is the world’s largest producer of sugarcane ethanol. Iogen Energy, a joint venture with Shell and Iogen Corp., operates a demonstration facility in Ottawa where it has produced over 2 million liters (560,000 gallons) of cellulosic ethanol as it refined its process since 2004.

Continue reading this article here.

Cooperation on Biofuels Increasing between Brazil and US

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With the US ending both the tariff on imported ethanol and the tax credit for domestic blenders, cooperation between the US and Brazil on biofuel technology is increasing, as well as efforts to trade renewable fuels on global markets. (See my post at the end of last year)

Yes, we need to be ever vigilant on the possible effects of increased biofuel production on food availability and prices as well as on land use, soil and water quality, and related issues. In my doctoral dissertation, however, I examined these issues in depth and contend that increased production can occur along with protection of ecological health.

The cooperation discussed in the article below can lead to greater efficiency of renewable fuel production, using less land and less water to produce more fuel.

Energy is fundamental to economic growth, and as countries in Latin America and Africa increase their ability to produce renewable energy domestically, they create more jobs and better the lives of their people in ways that will improve economic as well as environmental conditions for generations. These are undoubtedly positive.

It is a fascinating time to be alive.

Insight: U.S. and Brazil – At last, friends on ethanol

A gas station worker fills a car's tank with ethanol in Rio de Janeiro April 30, 2008. Brazil is the world's largest producer and exporter of ethanol. REUTERS/Sergio Moraes

By Brian Winter

BRASILIA | Fri Sep 14, 2012 11:21pm IST

(Reuters) – After years at each other’s throats, Brazil and the United States are working together to promote the use of ethanol in a collaboration that could revolutionize global markets and the makeup of the biofuel itself.

The breakthrough came in January when Washington allowed a three-decade-old subsidy for U.S. ethanol producers to expire and ended a steep tariff on foreign biofuels. The tariff, in particular, had poisoned diplomatic relations between the world’s top two ethanol-producing countries for years.

Continue reading this article here.

US Ends Tariff on Imported Ethanol

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With surprisingly little fanfare, the US has ended the $0.54 per gallon tariff on imported ethanol. This comes at the same time that Congress also allowed the $0.45 per gallon of ethanol tax credit for blenders to expire, potentially opening the door to much more US importation of Brazilian ethanol, as well as cooperation between the two countries on more advanced biofuels. Brazil was the leading producer of renewable fuel until 2005 when US production of ethanol from corn surpassed production of Brazil’s sugarcane ethanol.

The article below is clearly biased, quoting two top officials from UNICA, Brazil’s powerful sugarcane industry association, without presenting views from American officials who have been opposing these measures as they work to protect domestic energy production and agricultural markets.

That said, decreasing government intervention has always been favored by this humble author, and the elimination of these barriers to trade should make for the more efficient functioning of energy and agricultural markets.

Cooperation between the two largest producers of renewable fuels could also lead to faster development of fuels from non-food crop residues such as corn stover, sugarcane bagasse, and other cellulosic feedstocks.

Congressional Recess Means the End of Three Decades of US Tariffs on Imported Ethanol

Time for the world’s top two ethanol producers, the United States and Brazil, to lead a global effort for increased production and free, unobstructed trade for biofuels, says Brazilian Sugarcane Industry Association.

SAO PAULO, Dec. 23, 2011 /PRNewswire/ — For the first time in more than three decades of generous US government subsidies for the domestic ethanol industry, coupled with a steep tariff on imports, the United States market will be open to imported ethanol as of January 1st, 2012, without protectionist measures. The adjournment of the 112th Congress means both the US$0,54 per gallon tax on imported ethanol and a corresponding tax credit of US$0,45 per gallon for blenders, the VEETC (Volumetric Ethanol Excise Tax Credit), will expire as expected on December 31st.

Continue reading this story here.

Obama and the New Brazil

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After a first visit to Brazil earlier in the 20th Century, a foreign diplomat boldly stated that “Brazil is the country of the future!” Self-deprecating Brazilians quickly added, “And it always will be.”

Based on my four years of living in Brazil and many return visits in the four years since, I don’t think Brazilians are saying this any longer, nor are the popular media or President Obama.

It has been fascinating to watch the changes in Brazil since my first arrival shortly before Lula’s election in 2002. I feel very fortunate to have earned the job that first brought me there, and to have stayed in close contact with the amazing colleagues and friends with whom I worked and laughed during the past decade.

Mr. Obama, Meet the New Brazil

By JULIA SWEIG and MATIAS SPEKTOR
Published: March 18, 2011

When Barack Obama lands in Brazil this weekend, he will find a country transformed. In little more than a decade, some 30 million people have been lifted out of poverty and the country has risen to seventh place in the world economy.

Change at home has revolutionized policies abroad. Brazil has woken up to the 10 states along its borders, becoming the eminent power and driver of regional integration in South America. It has set out to develop closer ties simultaneously with Israel, Syria and Iran.

[…]

With most of the Amazon within its borders, the world’s 10th largest oil stores, and nearly a fifth of the world’s fresh water, Brazil is an environmental power, an energy power, and guarantor of global food security.

Read the entire article here.

Patience, Efficiency Are Key to Safe, Profitable Use of Brazil’s Oil

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There are a lot of people with a lot to gain from drilling this “presal” oil off Brazil’s coast as quickly as possible. I have worked with some of them and understand their desire to move forward with the extraction now, not later. I also understand their many good intentions as well as their confidence that the oil can be extracted safely using existing technology, even if I don’t agree.

I can also attest, from personal experience, to the truth of the article’s contention that government bureaucracy will be as inefficient at getting the job done as it will be at distributing any public funds to Brazilians and much needed government services. The barrier however, is not the Brazilian government, but existing technology.

And yes, prices at the pump are rising with no sign of abating, but it’s hard to see how speeding this oil drilling ahead in the next few years will do much to ease those prices in anything but the longest term. Plus, oil is a great example for supply creating its own demand. Increase the supply of oil and the lowered prices will drive us to use enough gasoline, diesel, and jet fuel to keep demand and prices high.

The first paragraph in the article below describes a process that is every bit as difficult, and as dangerous, as the one employed for the Deepwater Horizon platform formerly situated in the Gulf of Mexico. These processes and others like them can be and have been done safely, though recent experience tells us that not only is this safety far from ensured, but also that if something goes wrong, the consequences remind us exactly what the word “disaster” means.

The pressure to drill now is exacerbated by the high current demand for oil in the face of growing constraints. Some are reluctant to continue drilling off U.S. shores while the people and economies of Louisiana and other Gulf states are still reeling from last summer’s spill. Regardless of your political stripe, Middle East politics make us all a bit uneasy, especially when we think of how much of our oil comes from despotic and unstable regimes there.

Slowing our demand for oil, first by increasing efficiency and reducing use of transportation fuels, and then by continuing to develop viable alternatives to petroleum, will decrease the drive to rush drilling in places like the oil fields over 7000m beneath the ocean’s surface, through 3000m of rock and another 2000m of salt.

Given time, companies such as Petrobras will certainly improve technologies so that this oil can be reached more safely, with more effective failsafes in the event something does go wrong, and likely it will all be doable at lower costs, to the companies doing the drilling and to the consumer.

The additional time will also allow Brazil to continue eliminating corruption and streamlining its bureaucracy so that the permitting process is more efficient, as are the avenues through which the government spends its revenues and improves infrastructure.

These factors combine to create win-win-win situations for people, profit, and ecological health. Patience and efficiency are key.

Brazil’s offshore oil

In deep waters

Extracting the black gold buried beneath the South Atlantic will be hard. Spending the profits wisely will be harder

Feb 3rd 2011 | CIDADE DE ANGRA DOS REIS | From The Economist print edition

THE coast of Rio de Janeiro is 290km and 70 minutes away as the helicopter flies. High overhead, gas is flaring; underfoot, enough oil to fill 330,000 barrels is waiting to be offloaded. The ocean floor is 2,150 metres beneath. Drill past 3,000 metres of rock and you will hit a layer of salt 2,140m thick. Only after boring through that fossilised ocean will you strike oil—6.5 billion barrels’ worth in the “Lula” field alone. (Supposedly, it is named for the Portuguese word for squid, not the former president called Lula for his curly hair.)

[…]

More hopeful is the prospect that technological progress, led by Petrobras, can diversify Brazil’s economy. The company employs more than 1,600 people in research and development, says Carlos Fraga, who leads these efforts. It also works with 85 Brazilian universities and research institutes, and for every one of its own researchers, another ten outside the company are working on its projects full-time. A technology cluster is springing up around Petrobras’s research labs in Rio, with university facilities alongside new $50m laboratories built by the likes of General Electric and Schlumberger.

From this perspective, the technical obstacles of sub-salt drilling look like an opportunity. Exploiting offshore oil, says Mr Fraga, could spur Brazilian innovation just as the space race did in the United States. “Just extracting the oil is not enough to move Brazil on in technological development,” says Segen Estefan of the Federal University of Rio de Janeiro. “These are finite resources. Brazil must seize the moment to lead in technology, not just in extracting and exporting raw materials.”

Read the entire article here.

Soil is essential, non-renewable, and disappearing

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The headline on the article below borders on yellow journalism (I hope I sufficiently toned down my own headline above), but the problem of soil erosion is very, very real. If there’s any doubt in your mind, head to the rural Midwest and take a look at a church yard nestled amongst the corn and soybean fields. The churchyard will be six to ten feet higher than the surrounding farm fields.

Why? Modern industrial agriculture, the methods widely practiced around the world, too often leads to massive amounts of erosion. The soil simply blows away or is washed downstream.

Deforestation leads to more erosion as plants that would have held the soil, and the water essential to healthy soil, are removed for timber or to make way for agriculture. The crops may be beneficial to the soils, a nice symbiotic relationship common in systems untouched by humans, but if the soil is left bare for months at a time, as is usually the case in the Midwestern US during the winter, that soil is still highly vulnerable to erosion, hence the church yard phenomenon.

Civilization’s Foundation Eroding

September 28, 2010

Lester R. Brown

The thin layer of topsoil that covers the planet’s land surface is the foundation of civilization. This soil, typically 6 inches or so deep, was formed over long stretches of geological time as new soil formation exceeded the natural rate of erosion. But sometime within the last century, as human and livestock populations expanded, soil erosion began to exceed new soil formation over large areas.

Sinai Desert
Credit: iStock Photo/stevenallan

[…]

In a section of his report entitled “The Hundred Dead Cities,” he described a site in northern Syria, near Aleppo, where ancient buildings were still standing in stark isolated relief, but they were on bare rock. During the seventh century, the thriving region had been invaded, initially by a Persian army and later by nomads out of the Arabian Desert. In the process, soil and water conservation practices used for centuries were abandoned. Lowdermilk noted, “Here erosion had done its worst….if the soils had remained, even though the cities were destroyed and the populations dispersed, the area might be re-peopled again and the cities rebuilt, but now that the soils are gone, all is gone.”

[…]
During the late nineteenth century, millions of Americans pushed westward, homesteading on the Great Plains, plowing vast areas of grassland to produce wheat. Much of this land—highly erodible when plowed—should have remained in grass. This overexpansion culminated in the 1930s Dust Bowl, a traumatic period chronicled in John Steinbeck’s novel The Grapes of Wrath. In a crash program to save its soils, the United States returned large areas of eroded cropland to grass, adopted strip-cropping, and planted thousands of miles of tree shelterbelts.

Amazon Deforested

Credit: iStock Photo/Brasil2

During the late nineteenth century, millions of Americans pushed westward, homesteading on the Great Plains, plowing vast areas of grassland to produce wheat. Much of this land—highly erodible when plowed—should have remained in grass. This overexpansion culminated in the 1930s Dust Bowl, a traumatic period chronicled in John Steinbeck’s novel The Grapes of Wrath. In a crash program to save its soils, the United States returned large areas of eroded cropland to grass, adopted strip-cropping, and planted thousands of miles of tree shelterbelts.

Read the entire article here.

Written by Jason

September 29th, 2010 at 7:56 am

Brazil’s Agricultural Miracle?

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There’s no doubt that Brazil has flourished in the agricultural realm in the last several decades, and that its abundance of natural resources are only going to amplify its global importance in the years to come, as the world becomes increasingly resource constrained. The two articles below are typical of The Economist: well researched, well written, and optimistic about the abilities of technology and trade liberalization to continue aiding in Brazil’s, and the world’s, prosperity.

There is much truth to these assertions. Brazil is the world’s largest producer or exporter of beef, coffee, sugar, and oranges, and second only to the U.S. in soy. These are important staple products. Sugarcane ethanol seems to becoming only more attractive to foreign importers such as the U.S. and Europe. If either of these further opens its markets to importation of ethanol, it will have profound impacts on Brazil’s agricultural sector and economy as a whole.

With all of this in mind, there are two downsides that are not discussed in these articles, though they must be considered, both for Brazil’s sake and for others if, as the second article suggests, Brazil’s agricultural model is to be exported to places like Africa.

1. Disparity in wealth and lack of jobs, education, and training for lower-skilled workers. During this agricultural boom, Brazil has continued to suffer from vast disparities in wealth. Mechanization has driven millions of rural poor into the cities as jobs are replaced with tractors.

It is inefficient and simply infeasible to consider reversing this technological progression, but measures must be taken, not necessarily for reasons of altruism, but basic economic realities. Those farm laborers who move to cities like Sao Paulo and Salvador put a strain on public services, crime rates rise, and money spent on police and corrections in the cities can sop up the gains from agricultural exports as that sector innovates. Measures are being taken in Brazil to create more jobs in cities and the countryside, as well as education and training for people who have had far too little of these or the jobs that require them.

2. Biodiversity needs to be protected, and not just in the Amazon. Only about 8% of the Atlantic Rainforest remains, much of its destruction due to expansion of monoculture in states like Sao Paulo, which produces 60% of Brazil’s cane and ethanol. Protection of biodiversity in the cerrado in central Brazil, as well as closer to the coasts, is not a matter of liking flowers and birds, it is essential to the land’s continued productive ability.

Health of soil and water depends on functioning ecosystems, which are difficult to maintain in monocultural systems. Some of the larger cane and ethanol firms, such as Cosan, have done much to re-vegetate stream banks, providing much-needed buffer zones between water resources and agricultural activities. This must continue on all agricultural land as these areas provide continuous threads rather than isolated forests that do not provide the expanse needed for migrating animals essential to healthy soil and water.

It may sound like a stretch, but my doctoral research has shown the interdependency of ecology and economies. The health of each is indeed necessary to continue Brazil’s ability to feed itself and much of the rest of the world.

Please feel free to let me know what you think.

How to feed the world

The emerging conventional wisdom about world farming is gloomy. There is an alternative

Aug 26th 2010

THE world is planting a vigorous new crop: “agro-pessimism”, or fear that mankind will not be able to feed itself except by wrecking the environment. The current harvest of this variety of whine will be a bumper one. Natural disasters—fire in Russia and flood in Pakistan, which are the world’s fifth- and eighth-largest wheat producers respectively—have added a Biblical colouring to an unfolding fear of famine. By 2050 world grain output will have to rise by half and meat production must double to meet demand. And that cannot easily happen because growth in grain yields is flattening out, there is little extra farmland and renewable water is running short.

Read the entire article here.

Brazilian agriculture

The miracle of the cerrado

Brazil has revolutionised its own farms. Can it do the same for others?

Aug 26th 2010 | CREMAQ, PIAUÍ

IN A remote corner of Bahia state, in north-eastern Brazil, a vast new farm is springing out of the dry bush. Thirty years ago eucalyptus and pine were planted in this part of the cerrado (Brazil’s savannah). Native shrubs later reclaimed some of it. Now every field tells the story of a transformation. Some have been cut to a litter of tree stumps and scrub; on others, charcoal-makers have moved in to reduce the rootballs to fuel; next, other fields have been levelled and prepared with lime and fertiliser; and some have already been turned into white oceans of cotton. Next season this farm at Jatobá will plant and harvest cotton, soyabeans and maize on 24,000 hectares, 200 times the size of an average farm in Iowa. It will transform a poverty-stricken part of Brazil’s backlands.

Read the entire article here.

Written by Jason

August 27th, 2010 at 10:23 am

Can Brazil become the world´s first environmental superpower?

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It’s cool even to see the term “environmental superpower” being used in the media. I have said many times that, in a world with increasing constraints on natural resources such as water and land to grow food, fuel, and fiber, Brazil has tremendous potential.

In the article below Carrington hits the nail on the head in the subtitle when he says that “its challenge is to compete economically without destroying the environment.” Perhaps this could be rephrased with some editing on the popular, hippy dictum, ‘we need to behave now so as not to diminish the opportunities of future generations.’ Carrington is also arguing, wisely, that we need to consider the prosperity of future generations without sacrificing prosperity for people today. In addition to being unfair to today’s people, it’s simply unrealistic to believe that people today will make vast sacrifices for people not yet born.

Idealism and pragmatism. I’d like the two of you to meet. I know that my own parents made considerable sacrifices and made decisions that could lead my sisters and I to have a better life than they had. My parents have succeeded beautifully, and are now reaping the happy and healthy benefits.

So many Brazilians are making similar sacrifices today, working exceedingly long hours at often difficult jobs so that their own children have the opportunity to get an education and work better jobs. Since those children will not be able to eat money or education, steps will need to be taken to ensure that they have land and water to grow food and fuel, and other resources to produce the goods that can’t be grown, like laptops and iPhones. Sweet, sweet iPhones.

The popularity of 3rd party candidate, Marina Silva of the Green Party, shows us that Brazilians are indeed thinking about these resource constraints. The fact that Ms. Silva has been given such a prominent place at the discussion table is utterly astonishing, and very exciting, to me.

Brazil would not be the first nation to become rich from its resources – but its challenge is to compete economically without destroying its environment

Thursday August 5, 2010

Damian Carrington

The Itaipu hydroelectric dam stands along the Parana River in Foz do Iguacu, Brazil.

The Itaipu hydroelectric dam stands along the Parana River in Foz do Iguacu, Brazil. Photograph: Adriano Machado/Bloomberg via Getty Images

Outside Dr Gilberto Câmara’s office, there is a large and beautiful satellite map of Brazil. From the fractal elegance of the Amazon and its tributaries, to the ochre fields holding sugar, soy and cattle, to the twinkling mega-cities of São Paulo and Rio de Janeiro in the south, the map shows why he thinks Brazil can be the world’s first environmental superpower.

[…]

Câmara has adopted the slogan: “Brazil – the natural knowledge economy“. He describes this as applying knowledge and technology to commodities to boost their value, and reels off examples: biofuels, in which Brazil leads world research thanks to its sugar cane ethanol and growing biodiesel production; renewable energy – 47% of the country’s energy is already green, a world record; and climate change – Brazil’s Amazon is vital to the planet’s health. Of course, it also has plenty of timber, beef, iron and aluminium, though he doesn’t boast about those.

Read the entire article here.

Written by Jason

August 6th, 2010 at 1:54 am