Brazil: Biofuel Gold Rush Continues

President Luiz Inacio Lula da Silva’s call for Brazil to become a “green Saudi Arabia” over the next few years has investors giddy and environmental and workers organizations panicked.

Lula is a guest at the G8 summit this week in Germany. He recently returned from a three-day trip to India, which resulted in announcements that the two countries plan “to quadruple trade to $10 billion by 2010 and boost India’s use of biofuels.”
While dismissing claims that biofuel production is wreaking environmental havoc in Brazil, Lula proposed that wealthy countries should fund both biofuel production and environmental conservation in developing countries. “Rich countries have to pay for the poor countries to avoid deforestation so they can adopt clean models for development that don’t cause pollution or greenhouse gas emissions,” Lula said. He also said that rich countries should “start to help African countries to start to produce biodiesel and ethanol so that we can create jobs in Africa and wealth.” At the same time, a variety of government entities are predicting that climate change will have a significant impact on Brazil’s agroindustries in the coming years.

Environmental groups such as ActionAid Brazil warn that the ethanol industry could repeat the mistakes of the soy industry, which turned 7 million acres of Amazon jungle into monoculture soy in 5 years. Many also question the sustainability of biofuels.

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