5.4 Conclusions
115
provided substantive economic benefits to agribusiness and increased renewable
energy supplies that support Brazil’s energy independence and position in international climate negotiations; however, this prevailing bioeconomy agenda has also
intensified environmental impacts from unsustainable chemical-intensive monocultures. Moreover, except for some minor poverty reduction achieved through the
biodiesel program, biofuel production in Brazil has been grossly inequitable, with a
skewed distribution of benefits and burdens. There are four conclusions as to why
this development path has been taken and to its particular features.
First, Brazil’s biofuel production patterns and, thus, the shape of its bioeconomy to
date owe primarily to public policies and the particular policy instruments in place. A
combination of regulatory and economic tools (e.g., blending mandates, fiscal incentives and credit to key agroindustries, public investments in biofuel R&D, production
and storage infrastructure) has provided essential support for the private sector—and
to a lesser extent the public as well, through Petrobras—to produce biofuels. In this
context, international market demands seem to have worked only as a supplementary
driver, given that the bulk of Brazil’s biofuel production is domestically consumed.
Those instruments are essentially not transformational, i.e., they do not seek a transition from business as usual. Instead, they build on pre-existing agroindustrial sectors,
with all their virtues (e.g., efficiency, scale) and vices (e.g., unsustainable agricultural practices, social exclusion), even though for a while the government succeeded
in addressing the latter to a small extent through key policy instruments such as
the sugarcane zoning to avoid deforestation and, perhaps most crucially, the social
certification scheme to encourage smallholder integration in biodiesel chains. Such
changes over the years illustrate what this chapter’s assessment shows: that Brazil’s
public policy instruments have not only promoted but also steered the biofuel sector.
Second, behind these policy instruments, there are—sometimes synergistic, sometimes conflictive—fundamental guiding norms and interests that shape the emerging
bioeconomy. On the one hand, there is a clear interest in using biofuels to boost
economic growth, exports, and Brazil’s international status as a rising power in
global governance. On the other hand, there has been a normative underpinning—
expressed in the biodiesel policy—requiring development to be socially inclusive
and help reduce poverty in the country. However, the two imperatives are not that
easily reconcilable. Brazil’s most efficient biofuel production systems are highly
inequitable, while the most inclusive ones are small in scale and could hardly meet
the country’s economic and geopolitical ambitions. The solution has usually been
to have them in parallel, rather than trying to transform one or the other. Gradually,
though, social concerns are being removed from the bioeconomy agenda as even
the socially oriented policy instruments are modified to accommodate soy farmers.
There is also an understanding that biofuels should be environmentally friendly, a
normative underpinning that is mostly absent in other agriculture. It explains, for
instance, why only feedstock crops received zoning policies even though they are
not the main drivers of deforestation or land-use change in Brazil. Critically, however,
this environmental norm has had a narrow focus limited mostly to climate change
and rainforest protection only. Other ecological issues, such as agrobiodiversity loss
and chemical-input use in agriculture, are systematically overlooked.
115
provided substantive economic benefits to agribusiness and increased renewable
energy supplies that support Brazil’s energy independence and position in international climate negotiations; however, this prevailing bioeconomy agenda has also
intensified environmental impacts from unsustainable chemical-intensive monocultures. Moreover, except for some minor poverty reduction achieved through the
biodiesel program, biofuel production in Brazil has been grossly inequitable, with a
skewed distribution of benefits and burdens. There are four conclusions as to why
this development path has been taken and to its particular features.
First, Brazil’s biofuel production patterns and, thus, the shape of its bioeconomy to
date owe primarily to public policies and the particular policy instruments in place. A
combination of regulatory and economic tools (e.g., blending mandates, fiscal incentives and credit to key agroindustries, public investments in biofuel R&D, production
and storage infrastructure) has provided essential support for the private sector—and
to a lesser extent the public as well, through Petrobras—to produce biofuels. In this
context, international market demands seem to have worked only as a supplementary
driver, given that the bulk of Brazil’s biofuel production is domestically consumed.
Those instruments are essentially not transformational, i.e., they do not seek a transition from business as usual. Instead, they build on pre-existing agroindustrial sectors,
with all their virtues (e.g., efficiency, scale) and vices (e.g., unsustainable agricultural practices, social exclusion), even though for a while the government succeeded
in addressing the latter to a small extent through key policy instruments such as
the sugarcane zoning to avoid deforestation and, perhaps most crucially, the social
certification scheme to encourage smallholder integration in biodiesel chains. Such
changes over the years illustrate what this chapter’s assessment shows: that Brazil’s
public policy instruments have not only promoted but also steered the biofuel sector.
Second, behind these policy instruments, there are—sometimes synergistic, sometimes conflictive—fundamental guiding norms and interests that shape the emerging
bioeconomy. On the one hand, there is a clear interest in using biofuels to boost
economic growth, exports, and Brazil’s international status as a rising power in
global governance. On the other hand, there has been a normative underpinning—
expressed in the biodiesel policy—requiring development to be socially inclusive
and help reduce poverty in the country. However, the two imperatives are not that
easily reconcilable. Brazil’s most efficient biofuel production systems are highly
inequitable, while the most inclusive ones are small in scale and could hardly meet
the country’s economic and geopolitical ambitions. The solution has usually been
to have them in parallel, rather than trying to transform one or the other. Gradually,
though, social concerns are being removed from the bioeconomy agenda as even
the socially oriented policy instruments are modified to accommodate soy farmers.
There is also an understanding that biofuels should be environmentally friendly, a
normative underpinning that is mostly absent in other agriculture. It explains, for
instance, why only feedstock crops received zoning policies even though they are
not the main drivers of deforestation or land-use change in Brazil. Critically, however,
this environmental norm has had a narrow focus limited mostly to climate change
and rainforest protection only. Other ecological issues, such as agrobiodiversity loss
and chemical-input use in agriculture, are systematically overlooked.