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.
Image Credit: Mongabay.com