The extreme events climate change causes are affecting Brazil’s infrastructure and economic growth, said the Organization for Economic Co-operation and Development (OECD) on Monday (18). In the report OECD Economic Surveys: Brazil, a biannual document with perspectives about the country, the organization suggests planning public works, new urban policies and the broad compliance of the Forest Code.
“[Brazil’s] Public infrastructure is particularly vulnerable to climate shocks amid a rapid, unplanned, and uncontrolled urbanisation,” OECD emphasized. The organization is formed by countries compromised with economic, social, environmental and institutional goals, to which Brazil is in the accession process. According to the OECD, droughts and floods affect the country’s infrastructure.
“Frequent droughts and rising temperatures will create challenges for energy supply, particularly from hydroelectric sources,” the report reads. Regarding rain, the OECD highlights that landslides and floods harm cities and transportation. “Floods comprise over 65% of the natural hazards, and damages related to flash floods and landslides were responsible for 74% of the deaths related to natural disasters over 1991–2010,” the document states.
The OECD mentions a 2021 World Bank study according to which climate change costs 1.3% of Brazil’s Gross Domestic Product (GDP) every year. The document also says 55% of the losses affect transportation infrastructure, 44% affect energy supply and 2% water supply. The report highlights that the drop in the level of hydroelectric reservoirs between 2013 and 2021 threatened energy supply in a country where two-thirds of the energy matrix is related to hydroelectric plants.
Recommendations
The report provides a set of suggestions for Brazil in order to face climate change. The first recommendation has to do with improving the planning, financing and delivery of infrastructure projects to consider climate resilience. According to the OECD, projects will need legislative and budgetary support and clear responsibilities that consider extreme climate events.
“An optimised portfolio of infrastructure assets would take into account cost-benefit-analysis, with some assets being climate-resilient but necessarily all,” reads the document.
The OECD also suggested reviewing urban policies to prevent new constructions in risk areas and reduce the consequences of climate change. “Elaborating guidelines to support municipalities in assessing climate risks and integrate them in land use planning and providing hazard maps and access to climate information to municipalities to perform climate risk assessment would enhance urban planning,” it says. The report also recommended more investments in public transportation to reduce the vulnerability of this sector’s infrastructure.
Broadly, the OECD called for the development of a carbon market, with the improvement of pricing mechanisms for carbon dioxide emissions to reduce them. Through this market, investors from developed countries finance forest recovery or socio-environmental development projects in exchange for emitting carbon in their countries of origin.
The organization also called for efforts to fulfil legislation against deforestation. “Stricter enforcement of the Forest Code, coupled with more adequate resources for enforcement agencies, are now expected to support national efforts towards reducing deforestation.”
Citing World Bank figures again, the OECD estimates that investments to adapt infrastructure to climate change will cost, on average, 0.8% of Brazil’s GDP between 2022 and 2030, varying depending on the kind of infrastructure. The high cost, the document states, would be compensated for by a decrease in losses and economic resumption. “In the road infrastructure sector, a 1.2% of GDP investment would significantly improve the climate resilience of the 23% of GDP of new investments needed over the next decade. Moreover, it would avoid losses estimated at 2.5% of GDP.”
