Brazil Could Lead Climate Solutions with Potential Investment of $3 Trillion, Says Study
Brazil Could Lead Climate Solutions with Potential Investment of $3 Trillion, Says Study
Mapping by Boston Consulting Group (BCG) indicates that Brazil plays a strategic role in mitigating climate change and could lead the implementation of solutions by 2050 with the realization of investments.
Author: Shagaly Ferreira
Date: 05/27/2024 | 05:00 AM
Updated: 05/27/2024 | 10:54 AM
Brazil's Potential in Climate Solutions
Brazil has the potential to be a global hub for climate solutions, with investment opportunities reaching $3 trillion by 2050. This estimate comes from the study Seizing Brazil’s Climate Potential, released by the Boston Consulting Group (BCG) on Monday, May 27.
Regarding the theoretical potential for nature-based solutions (NBS), Brazil leads compared to eight other economies: China, Indonesia, European Union, India, Russia, Mexico, United States, and Australia.
Investment Attraction Examples
The study highlights examples illustrating the potential for attracting investments, such as Microsoft's agreement to purchase 3 million carbon credits in Brazil over 15 years, and AstraZeneca's investment of about $70 million in planting 12 million native trees in the Atlantic Forest in 2023.
Strategic Position and Advantages
According to Arthur Ramos, BCG's executive director and partner, Brazil's strategic position in this context is linked to its already implemented initiatives, like sustainable agriculture—where Brazil is a world leader—and green industrial products, along with the high competitiveness of renewable energies. These areas have the most potential for future investments, both international and domestic.
“The entire thesis of this study is based on Brazil's very important comparative advantages, resulting from its natural conditions, territorial extension, and energy resources, both fossil and renewable. However, the renewable side is very strong. Therefore, this is the main attraction we see here,” says the specialist.
Investor Attention and Commitment
Ramos believes that international investors and funds that value companies' sustainable commitments will not only monitor whether they comply with socio-environmental requirements but will also look for differentiation. “They view this as a global issue, but in Brazil, they might pay twice as much attention,” he notes. “Hence, more than fulfilling commitments, it is important for companies to become references.”
COP-30 and Investment Opportunities
The study highlights that the 30th UN Climate Change Conference (COP-30) in Brazil in 2025 could be an opportunity for companies involved in the decarbonization ecosystem to attract the necessary investments to integrate these solutions into their business strategies. The event will serve as a showcase to the world.
Global Economy Decarbonization
According to the research, decarbonizing the global economy is urgent for both preventing climate disasters and avoiding losses in global economic activity. It is estimated that without these preventive measures, the climate crisis could result in a 30% decline in global GDP per capita by 2100.
The transition to Net Zero worldwide will require investments of up to $150 trillion over the next three decades. The focus for this includes areas offering solutions in renewable energy, biomass and biofuels, sustainable agriculture, carbon offsetting, electrification and batteries, and green hydrogen.
