Geopolitics over Amazon fire taking complex turn for Brazil

Updated: September 4, 2019 2:58:58 PM

Amid G7 leaders’ outcry and emerging economies silence, the geopolitics over the burning ashes of the Amazon has been taking an ever more complex turn for Brazil.

Efforts by the world’s leading economies are being stated for ‘damage control’ for some and ‘colonialism’ for others as French President Emmanuel Macron announced that the G7 would release US million for relief measures.

By Karin Costa Vazquez and Riddhiman Dey

The world watches in shock as vast stretches of the Amazon rainforests burn in flames. With the skies over Brazil darkening as a result of plumes of smoke spreading from the forest fire, Amazonas, the largest state of Brazil, has been declared in a state of emergency. Faraway cities such as São Paulo and at least four neighboring countries have also borne the brunt of smoke fumes. At the end of the month, President Jair Bolsonaro will open the 74th United Nations General Assembly under severe domestic and international scrutiny. Amid G7 leaders’ outcry and emerging economies silence, the geopolitics over the burning ashes of the Amazon will take an ever more complex turn for Brazil.

Even though forest fires are not a rare occurrence in Brazil, the one of August 2019 was particularly disastrous in nature. According to the National Institute for Space Research, nearly 16,000 fires were registered between January and July 2019, a 35.6% increase on the same period in 2018 and the highest since 2016. Over the past 20 years, the average number of fire outbreaks observed in the first seven months of the year has been 14,015. In August, the number of burns exceeded the total for the month in 2018 and is the highest since 2011. Between January and late August, NASA’s Terra and Aqua satellites have detected 100,000 fire spots in the Brazilian Amazon—the highest number in that period since 2010.

A fair share of the blame is attributed to President Bolsonaro anti-environment rhetoric and politics of denial. According to the Brazilian Minister of Environment, forest fires have been time and again caused by dry weather, wind, and heat. Yet, critics claim that the vast majority of the fires are human-induced as people clear land to graze cattle or grow crops and cannot be attributed to natural causes. Brazil’s strict environmental laws contrast with the country’s limited, and yet diminishing, ability to enforce them. The progressive relaxation of environmental protection to accommodate agribusiness expansion, extractive activities and large-scale infrastructure projects coupled with the demobilization of the apparatus to combat deforestation has incentivized ranchers, farmers and loggers to break the law without fearing the consequences.

A double political victory, an economic debacle

Efforts by the world’s leading economies are being stated for ‘damage control’ for some and ‘colonialism’ for others as French President Emmanuel Macron announced that the G7 would release US$22 million for relief measures. The G7 leaders also intend to discuss plans to reforest the Amazon in their next meeting in September. Dubbed as an environmental buff and gatekeeper of the Paris Climate Deal, Macron has further evoked Europe’s social and environmental standards to block the Mercosur free trade agreement (FTA) unless Brazil accepts responsibility for climate change. The Bolsonaro-made fury over the Amazon burning seems to have won Macron political capital with both French producers against the FTA and Western media.

In the meantime, Brazil encounters hardships on the economic front. Countries like Finland and Ireland have moved by the stance of France and are planning to ban beef imports from Brazil. Despite Donald Trump’s staunch support to the Brazilian government response to the Amazon crisis, US asset managers, pension funds and companies – some of the world’s largest “investors in deforestation” with over US$ 6.5 trillion in sectors directly causing the forest fires in the Amazon and deforestation around the globe – have issued warnings, halted deals and stopped purchases of government bonds given the increased scrutiny and economic risks after the forest fires. Brazilian companies and the Brazilian government lose.

Last week, the Brazilian stock market fell 1.27% to the lowest level in almost three months and the dollar increased to US$4.14 following the US-China trade war and the overall uneasiness with emerging economies aggravated by the Amazon crisis. The shares of the main Brazilian meatpacking companies listed on Ibovespa fell up to 4.85% as a result of the tension between Brazil and the G7 and EU threats to boycott Brazilian meat imports. The EU is Brazil’s second-biggest export market with 17% of the total value. China takes first place with 27% of Brazilian exports and the US comes third with 12%.

Disturbing silence

In contrast to G7 leaders’ hullabaloo, emerging economies silence over the Amazon burning has been rather disturbing. Last week, the spokesperson of China’s Foreign Ministry limited to say that the Chinese government supports the Brazilian government decision to deploy the army to extinguish the fire and to ban forest burning for the next two months. In a prudent move, China need not shout “fire” lest it be known the thorny China-Brazil relations under Bolsonaro might generate further sparks in the future.

China has taken a leading role in the fight against climate change. In 2014, Xi Jinping launched a series of initiatives to curb greenhouse gas emissions and spur a low carbon economy. Two years later, the country ratified the Paris Agreement. The awakening of China’s green policies does not offer immediate solutions to some structural challenges and their wider implications though. China’s overwhelming demand for soy and meat stimulates the Brazilian agribusiness, which advances over the Amazon forest and consolidates as a production model. Infrastructure megaprojects further bring together interests of trading companies such as US’ Bunge and Cargill, France’s Louis Dreyfus and China’s Cofco and other groups exploiting the global trade of agricultural commodities to meet China’s needs.

This scenario tends to be aggravated with the continuation of the US-China trade war as Brazil emerges as a substitute supplier to the Chinese market. Unless the Brazilian government improves surveillance in the Amazon, relocates agribusiness to less critical areas by offering fiscal incentives and other advantages, builds sustainable infrastructure and businesses in the region, and adopts a long-term plan to transition to a green economy while making Brazilian exports competitive and well-accepted abroad, prospects of change remain grim. These could be areas for Brazil-China bilateral cooperation or under the BRICS (Brazil, Russia, India, China, and South Africa) through the New Development Bank (NDB).

India’s “diplomacy of omission” in turn has been one of absolute silence towards the Amazon fires. For some critics, India has sensibly avoided any public statement since neither Bolsonaro nor Macron is defendable. But is Narendra Modi playing his cards too close to his chest? Afterall New Delhi has historically enjoyed friendly relations with Paris in areas like trade and defense, which is in India’s best interest to remain intact especially with the recent scrapping of Article 370 of the Indian constitution that grants autonomy to the disputed Kashmir territory.

India and Brazil, in turn, have been close on all discussions on climate change and in financing for the developing world, particularly in the group of the newly industrialized countries BASIC (Brazil, South Africa, India, and China). Unlike China though, India’s efforts to fight climate change domestically have resulted in far less impressive results. Combined with the lack of positioning on a subject of global relevance, this could lead to a lack of credibility by India and its aspirations to become a leader in global governance.

Common but differentiated responsibilities

Ironically, the BRICS environment ministers met in Brazil just a few days before the Amazon fires made into the world’s headlines. The joint declaration went beyond the token mention of climate cooperation made by the BRICS foreign ministers in July to “acknowledge the importance of global action against climate change” and confirm the five countries’ commitment to “the successful implementation of the United Nations Convention on Climate change (UNFCCC) and its Kyoto Protocol and Paris Agreement”, while “reflecting the principle of equity and common but differentiated responsibilities and respective capabilities in the light of different national circumstances.”

The document further urged developed countries to fulfill their commitment under the UNFCCC and its Kyoto Protocol and Paris Agreement and to provide means of implementation to developing countries including climate finance, technology development, and transfer, and capacity-building support. The efforts of the New Development Bank (NDB) in supporting environmental projects were recognized and the creation of a special NDB grant fund to support BRICS environmental cooperation was proposed. The proposal could make a more meaningful headway into UN Secretary General’s efforts to galvanize global political leadership for climate action ahead of the 74th United Nations General Assembly later this month than the proposed G7 top-down aid package.

Nevertheless, the burning of the Amazon may not only put Brazil’s emission targets in check but also compromise global efforts to fulfill the Paris Climate Deal. This is particularly shocking given the country’s historical leadership in environmental policy.  Brazil hosted the two most important international conferences on sustainability in history – the 1992 Earth Summit and the Rio+20 Conference -, took an ambitious stance in the discussions, and played a decisive role in approving the key documents as well as defining the sustainable development agenda for the coming decades. Brazilian innovations in the field of public policies are also regarded as contributions to the integration of the economic, social and environmental dimensions of sustainable development.

In Brazil and around the world, the burning of the Amazon forest has sent shockwaves of angst, self-interest, denial, and omission. Bolsonaro inability to handle the situation spiraled into an international crisis causing his popularity to plummet along with Brazil’s image abroad. Once a leader in international discussions on the environment, Brazil’s political capital built over 30 years now burns along the Amazon amid global outcry and silence. In the geopolitics of ashes, there are no winners.

(Karin Costa Vazquez is Fudan Scholar, Center for BRICS Studies at Fudan University (China) and Assistant Dean for Global Engagements, Associate Professor and Executive Director of the Center for African, Latin American and Caribbean Studies at O.P. Jindal Global University (India). Riddhiman Dey is at O.P. Jindal Global University School of International Affairs. Views expressed are personal.)

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.