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Brazil Will Tax Oil Profits To Fund Climate Change Adaptation

Brazil Will Tax Oil Profits To Fund Climate Change Adaptation

During Brazil’s Forum on Climate Change earlier this week, it was announced that the country was on track to meet carbon dioxide emissions reduction targets four years earlier than promised.

Brazil is one of the world’s biggest sources of carbon dioxide due to the clearing of the Amazon rainforest, 17 percent of which has been destroyed.

As part of the country’s continued plan to reduce emissions, it has decided to impose a levy on domestic oil production (Mongabay).

The tax, recently signed into law by President Luiz Inacio Lula da Silva, helps establish the National Fund on Climate Change, and makes Brazil the first country in the world to use funds from the profits of an oil supply chain to finance mitigation and adaptation to climate change (ENS).

Izabella Teixeira, Brazil’s Minister of Environment, told Reuters the fund is expected to receive around $132 million in 2011, a figure that would climb with rising oil production. Brazil expected to substantially expand production after the recent discovery of massive offshore oil deposits.

The Fund would also be eligible to receive money from other sources, including international funds, according to Teixeira.

In short, Brazil wants to have its cake and eat it too.

The idea of taxing oil companies to mitigate the effects of their existiance seems refreshing, but could be ultimately futile. Creating such a fund merely soothes the conscience of a government torn between an environmental agenda and oil profits.

“The Ministry of Environment is aware of the strategic role that the Fund plays in promoting a low carbon sustainable development model [that] will consolidate Brazil into a superpower of the 21st century,” said the acting Minister Jose Machado during the signing ceremony.

Sorry Mr. Acting Minister, but the oil industry, and the dirty energy that it produces, are the main accelerators of climate change. One cannot increase the activity of such an industry while simultaneously decreasing its affects.

Taxing the existing oil industry while refusing to allow future expansion- now that would really be the action of an environmental superpower.

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6:10PM PDT on Nov 4, 2010

it is a start for sure we all should do the same

10:10PM PDT on Nov 3, 2010

it's a start and it might begin something bigger but still Earth needs much more than that and fast!

7:22PM PDT on Nov 3, 2010

The other thing that will help is the institution of making the industrial nations pay for programs and industry that are ecologically sound; such as the alternative industries to logging. They don't need oil and neither does the rest of us. All oil companies should be forced at gunpoint to clean up their messes.
I remember the rain forest in Costa Rica before they started cutting it up. I think they have since ceased to do this. I also remember seeing satellite photos of the Amazon pre 1992 and post 1992. Post 1992 it looked like someone had taken a large comb and raked it in all directions. It was so bare you could actually count the rows. Disgusting.

6:25PM PDT on Nov 3, 2010

It is an illusion. Oil must Go Away .

5:58PM PDT on Nov 3, 2010

I actually think that this is a brilliant idea. That way there will be more money for things that are really important and research can be funded. I think that all countries should follow suit on this iniciative, actually.

4:30PM PDT on Nov 3, 2010

Im with Patricia... I hope it works =/

1:33PM PDT on Nov 3, 2010

it is a start

11:58AM PDT on Nov 3, 2010


As a Brazilian, I hope it really works. But I know we still have a LOT to do.

8:27AM PDT on Nov 3, 2010

Hard to point fingers at another country trying to become independent of foreign oil. At least they are trying to make those responsible for some of the pollution be responsible financially. And if oil companies have to pay higher taxes for the privilege of doing business in Brazil, maybe it will become an incentive to start researching/investing in alternative sources of renewable energy. This is not an easy issue. No right or wrong answer in my opinion.

7:02AM PDT on Nov 3, 2010


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