Only China Can End Brazil’s Climate Crisis

Only China Can End Brazil’s Climate Crisis

Deforestation is devastating the Amazon, but Beijing has the political and economic leverage to stop it.

Last week, Brazil’s embattled environment minister, Ricardo Salles, resigned after presiding over the country’s rising deforestation for almost two and a half years. Under his watch, more than 4,250 square miles of the Amazon were destroyed by largely human-made fires in 2020—an almost 50 percent increase from losses sustained in 2018. These fires, ignited by farmers and cattle ranchers during the Amazon’s annual burning season, were initially set on deforested land but spread like wildfire into the rainforest.

But Salles’s departure should not be seen as a harbinger of any major policy changes. Deforestation has also been facilitated by Brazilian President Jair Bolsonaro, who transferred the certification of Indigenous territories to the ministry of agriculture, thus giving farming and pastoral interests a greater say over protected lands.

The environmental impact of their decisions has been devastating. Deforestation depletes carbon sinks, or reservoirs that absorb carbon dioxide from the atmosphere, which are critical to combating climate change. With this damage, scientists warn that the Amazon is quickly approaching a point of no return, after which it will become a parched savanna.

As the fight against climate change takes center stage in the United States and Europe, activists and policymakers are increasingly calling on the world to shun Brazil—but doing so would be a mistake. While divesting from Brazil’s economy or imposing sanctions may satisfy a moral urge and placate powerful domestic lobbies, it would not stop deforestation. Instead, Washington and Brussels must turn to China, the only country with sufficient leverage to end Brazil’s environmental crisis.

It is remarkable how quickly European and U.S. relations with Brazil have deteriorated. Just this past October, the United States agreed to facilitate trade with Brazil, which it designated a major non-NATO ally in 2019. Two years ago, the European Union also signed a monumental trade agreement with Mercosur, the South American bloc of which Brazil makes up the lion’s share. If applied and ratified, the EU-Mercosur deal would cover 780 million people and 25 percent of global GDP.

The EU and Mercosur concluded their negotiations right as the first burning season of Bolsonaro’s presidency began. After Bolsonaro replaced the environmental protection professionals in charge of anti-deforestation efforts with the military, his disregard for the environment became clear. In 2020, deforestation fire activity in Brazil’s southern Amazon was 60 percent greater than it was the previous year.

As the Amazon burned, the United States and Europe were quick to hit back against Brazil. Then-presidential candidate Joe Biden warned that Brazil could suffer “significant economic consequences.” European countries withheld donations to Brasília’s Amazon Fund and turned against the Mercosur trade deal.

But neither Washington nor Brussels is in the position to play police—only Beijing, Brazil’s largest trading partner, is. Since the 2008-2009 financial crisis, during which global trade waned, Chinese demand for Brazilian soybeans and other agricultural, forestry, and mining products has kept Brazil’s economy afloat. As Beijing’s influence in Brasília soared, Washington’s and Brussels’s fell. Today, Brazil’s exports to mainland China exceed its combined exports to the United States and the EU.

As much as Beijing must be part of the solution, it is also part of the problem: Sino-Brazilian trade deals and investments leave Beijing to benefit from Brasília’s unsustainable practices and illegal deforestation. In order to capture more of the Chinese market, Brazil’s agricultural frontiersmen are incentivized to burn the forest to clear space for farms or livestock. Brazil has also signed up for infrastructure projects in the Amazon under China’s Belt and Road Initiative, an undertaking marred by a poor environmental record.

Many U.S. and European companies and investors are currently deliberating how to best continue engaging with Brazil; Chinese firms must be brought into the same fold. Just as asset managers, from the U.S. behemoth BlackRock to Nordic pensions funds, must closely monitor the environmental impact of their engagements in the Amazon, European and American leaders must place a similar onus on the Chinese actors driving demand in Brazil. Chinese corporations must commit, for a start, to using sustainable palm oil, soy, meat, and timber and subjecting themselves to global compliance standards. Only through doing so can Beijing extricate itself from deforestation.

The United States and Europe have several avenues for coaxing China to act sustainably. Ensuring Beijing’s compliance will not be easy, but one option is turning to multilateral channels such as the newly reinvigorated World Trade Organization and the broader climate agenda. Beijing should be encouraged to improve the supply chain monitoring of its investments and trade with Brasília while strengthening its climate impact assessments. If used effectively, these courses are the best avenues for strengthening global chains of responsibility.

Washington and Brussels can also turn to their own bilateral channels with Beijing. The United States, for example, can use its trade talks with China, which already include soy, beef, and other produce. The United States held the global lead in grain and oilseed production throughout the 20th century and remains an agricultural powerhouse. It must insist that China does not circumvent the increasing pressure toward sustainable farming practices by instead reaping the benefits of Brazilian deforestation.

European leaders have also worked to negotiate the Comprehensive Agreement on Investment (CAI), a new framework for trade and investment between the EU and China. The CAI explicitly calls for a “high degree of transparency,” “corporate social responsibility” for labor and the environment, and to “effectively implement the Paris Agreement on climate.” While the CAI has now been frozen by the European Parliament, Brussels’s ties to Beijing can still be used to compel change. Even without the agreement, Europe should not accept a noncommittal China but instead develop new ways of measuring China’s global environmental impact.

Brussels and Washington must prioritize their climate commitments with Beijing as strongly as they do with Brasília—and quickly. As Sino-Brazilian trade surges, the window for aligning Brazil with their priorities is rapidly closing. In early 2021, Brazil welcomed both the Chinese telecommunications giant Huawei and Sinovac vaccines into the country, despite Bolsonaro’s previous anti-Chinese protestations. In March, Ernesto Araújo, Brazil’s China-bashing foreign minister, resigned after clashing with congressional leadership, including over his criticism of China. For genuine progress to be made on the Amazon, Beijing must be encouraged to use the leverage it so clearly has.

Beyond persuading Beijing, Washington and Brussels must cooperate to prevent a greater wedge from forming between them or them and Brasília. Alone, neither is likely to succeed at much, other than further diminishing their sway in Brazil. Yet together, they can work to counter China’s influence and ensure that Beijing does not continue to reap the financial and geopolitical benefits of deforestation.

It is tempting for Europeans and Americans to think they can just wait out Bolsonaro’s term—but the Brazilian general election in 2022 offers no guarantee that he will be voted out or that a successor would shift course. At any rate, there will be two burning seasons before the election, which Bolsonaro could use to secure support among his agricultural base. Bolsonaro could also dismiss any criticism from the United States and the EU as foreign meddling, especially as they become less politically and economically relevant to Brasília.

Brussels and Washington’s only long-term solution is to work with Beijing, the sole power with the economic and political heft to sway Brazil’s decisions. And, ultimately, Brazil itself must come to see how the short-term benefits of burning are far outweighed by the long-term damage it causes. If Brazil committed to fighting illegal deforestation across administrations, there would be a lasting solution—and even a possible future for the country as a “green superpower.”

Such an outcome could also have a profound regional impact: Success in Brazil, home to 60 percent of the Amazon rainforest, could spill into the country’s Amazonian neighbors. It could also extend to other places where China’s economic initiatives have significant environmental costs, such as Indonesia’s rainforests. More broadly, Brazil could serve as an example of how Brussels and Washington can work together to balance Chinese influence.

In the meantime, Europe and the United States must ensure that their climate and trade agenda does not give China free rein to benefit from the burning Amazon. Instead, they should nudge Beijing to become a responsible stakeholder of the Amazon and all of its rewards.

For years, China has emphasized its policy of noninterference in the affairs of other countries. In Brazil, however, Beijing’s policy has resulted in—and even supported—environmental degradation and an impending climate crisis. As Brazil prepares to enter another burning season, Washington and Brussels must insist that Beijing also work to reverse Brasília’s environmental policy and safeguard the future of the Amazon—an outcome that neither Europe nor the United States can accomplish on its own.

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