Ana Toni: I didn’t see a plan for oil to support the transition – 03/31/2024 – Market

The Secretary of Climate Change at the Ministry of the Environment, Ana Toni, says that she has not yet seen any clear strategy in Brazil that directs oil resources to finance the energy transition.

“Norway does this with their sovereign wealth fund, but they have a specific strategy there”, he tells Sheet. “It would be something to be debated. I haven’t seen this proposal here in Brazil yet.”

The statements are made while the government maintains oil exploration in the country’s long-term plans despite constant environmental alerts. “The big problem is that we have a bigger enemy than time. There is a climate emergency happening,” he says.

In charge of the secretariat created by Minister Marina Silva (Environment) in 2023, Toni is involved in discussions related to the topic at the G20 and COP30 (Conference of the Parties, meeting of the United Nations Organization on Climate Change) — both in Brazil.

She defends more money from rich nations to developing countries and says that Brazil needs to move forward in the climate debate in the oil and gas sector.

What is your assessment of the result of COP28?
It played a very important, truly significant role in the sense that we had sectoral targets for the energy sector, which pollutes the most in the world. It was a watershed moment. And we talk about fossil fuel, we break this diplomatic taboo of not talking about the subject.

There were important things, tripling renewable energy, doubling efficiency, the “transitioning away”, transitioning away from fossil fuels. Now, how will this all be implemented? Where are the plans? As a legal document, but to measure the success and effectiveness of a COP, we need implementation.

How important is the term “transitioning away”?
There was a fight between “phase out” and “phase down”, and it was interesting that another term emerged. We still have to understand the meaning of this agreement, how it is translated into the different political languages. There is a dispute over the interpretation of this new term. We are interpreting it as “having a transition to the end”, like the [ministra] Marina [Silva] always use.

And what are your expectations for the next COP?
For the 29 [que acontece neste ano, no Azerbaijão], the theme is the global resource target from developed countries to developing countries. This issue is undermining trust in the negotiation process. It was agreed [em 2015] the target of US$100 billion, which we already know is very little due to the climate emergency. However, as this target has not been met so far, this issue is paralyzing the possibility of other agreements in other areas. This is what COP29 has to deliver: who will pay, when and how.

What is the best strategy to finance the energy transition and combat climate change?
One of the biggest problems, if not the biggest, is making financial resources, which exist, flow to emerging countries. It is the big theme that we raised at the G20. There are developing countries that have a lot of climate ambition, I would even say much more than some of the developed countries, but they do not have the means and finances to implement their ambition. This is the Brazilian case. The ecological transformation plan already shows this Brazilian political will. We have ambition, but we could go much further. How do we make it flow? That’s what the Climate Fund is, it’s symbolic, it already existed, and now we’ve raised R$10 billion for it.

But are the funds enough?
We will need many more [fontes]. It’s not enough at all, I have no doubt. Tax reform is a step in the right direction when looking at functional finance. What are we subsidizing more and less? This debate is very much alive here in Brazil, and this process of reviewing tax policies is fundamental. But it’s not one or the other. You have to do everything at the same time, because we are experiencing an emergency.

This definition of tax reform will come in the regulations, when political disputes come into play…
These are new economic instruments. We need to remember that the economy today reflects the consolidation of a historical process, 300 or 400 years old. You don’t change overnight. At COP, we talk about “transitioning away”, transitioning away from fossil fuels, but this transition towards ending the political power of fossil fuels will probably take longer, because it is a consolidated economy. But having arrived at this term, which seems naive, gives a direction for what we are doing: changing from an economy that was not bad, but based on fossil fuel, and going to a renewable one. It was a linear economy, and now we are talking about a circular economy. It’s a process.

I have no doubt that these new renewable energy lobbies will strengthen over time. And others will diminish their political power. The big problem is that we have a bigger enemy, which is time. There’s a climate emergency going on.

And will there be time?
We don’t have a targeting problem, no one wants to put human life at risk. The problem is how quickly this change happens, how we accelerate these processes as much as possible. We know that money is power, and we have a hyper-partner in the Ministry of Finance. So, if we can get the economy to give the right signals, we have hope.

The oil sector, including petclothes, estimates another 20 or 40 years of fossil use. Is it a possible time?
The International Energy Agency gave us another number, talking about until the end of this decade. We have to be guided by science. Now [temos que pensar] that areas dependent on fossil fuels can be repurposed more quickly. Some products already have a substitute — for example, single-use plastic — and others may take longer because they do not have [substituto]. [Precisamos identificar] which areas of production and consumption can move faster.

What about the idea of ​​using fossils to finance the energy transition?
This idea didn’t come up in Brazil, Norway does this with their sovereign wealth fund. But there is a specific strategy there. I’m not saying it’s right, but they designed the background for it. Not us here. If the proposal was “I’m going to explore our oil to decarbonize the economy as a whole, this will take five, ten years, and, with this resource, I’m going to replace plastics first, then cars, I’m going to pay for everyone to have a car electric…” would be something to be debated. I haven’t seen this proposal here in Brazil yet.

I just think that we are no longer at that point where we think we can have that luxury. [de seguir explorando]. As I said, our worst enemy is time. If you explore it, someone will use it.

In the case of Brazil, the most important thing for reducing the carbon footprint is deforestation and agriculture, which account for 75% of our emissions, and that is where we should focus. Deforestation fell by 50% [na Amazônia em 2023]we are doing our homework.

Agribusiness and farmers have really matured a lot, they have realized that they are the first victim of climate change. A few years ago, no one could have dreamed of a president talking about zero deforestation. It was unthinkable.

But fossil fuel is 75% of the world’s pollution. It is important that the energy debate takes place in Brazil. The energy debate in Brazil is not yet at the same maturity. But in other countries, this debate is happening. Colombia has reached a way out [que foi cortar os fósseis]. Norway, which has a very good job, has not decided to stop, continues exploring oil and, for the next 30 or 40 years, wants to continue. It is a choice that each country has to make. Our decision is not made by a ministry, it is by the National Energy Policy Council.

But agriculture was left out of the regulated carbon market…
Yes, and now they are talking and there is a possibility of rethinking. It is true that carbon market methodologies for the agricultural area are not as sophisticated as in the energy area. And it is also true that, in the international carbon market, only two countries have this [o agro dentro do mercado regulado]. But in the Brazilian case, it is absolutely fundamental that they are part of this construction from the beginning, even if they come and join a little later.

How will the R$10 billion from the Climate Fund be applied?
The Climate Fund has six areas covered, already decided by a committee. But, more than just having money —which is fundamental—, when I talk about means of implementation, it’s because we have to have good projects [submetidos ao fundo]. Last year, all resources from the fund were disbursed. 100%. For many renewable energy projects, great, wonderful, but we want to not just finance energy. We need to get into reforestation, bioeconomy, infrastructure. We need to think about other areas. We are talking to the Treasury, the Treasury, and even the BNDES, to build a fund to structure projects.

And are these R$10 billion enough?
We need much more. But you have to start [de algum patamar].

We are again talking about time. Is the speed satisfactory?
I don’t think that, after the government we’ve had in recent years, it would be possible to accelerate more than we are accelerating.

The New PAC [Programa de Aceleração do Crescimento] has works with great environmental impact and provides funding for fossils. It is not a contradiction in government?
For works that would be more degrading, such as BR-319 and Ferrogrão [que cortam a Amazônia]study and research conditions were created… And the PAC brought the climate perspective to municipal choices [contemplados], which is absolutely unprecedented. That’s enough? Need more? Obvious, but just linking it to studies is a benefit for the environmental area.

Are the conditions sufficient to guarantee sustainability?
It’s enough at this point, it’s part of a process.

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X-ray | Ana Toni, 60

Secretary of Climate Change at the Ministry of the Environment. Graduated in economics from Swansea University (Wales), master’s degree from the London School of Economics and doctorate from the State University of Rio de Janeiro. She has worked at the Ford Foundation, Greenpeace, Transparency International and the Climate and Society Institute.