Isolated and Without Food in Brazil's Corn Ethanol Capital


Why Is Brazil’s Climate Fund Giving Hundreds of Millions to Big Ag?

In 2015, western Indonesia and Singapore were covered in toxic black smoke.

(02:16.4)  I had family living in Singapore and they couldn't breathe for months. And, uh, it was just billowing black peat smoke.

Tim Sahay is a climate policy expert at Johns Hopkins, we talked to him last episode. Like everyone else living in Singapore at the time, his family was living in hazy smoke for months. The culprit wasn’t a forest fire, it was…well in a way everything we’ve been talking about this season. The U.S. had passed laws incentivizing corn ethanol, so all the corn that used to be used for corn oil in cooking was being used for ethanol instead. The world needed a replacement for cheap cakes and cookies, and it found it in palm oil.

Throughout the early 2000s, much of the rain forests of Borneo were replaced with palm oil plantations. Plantation owners would use fire to quickly clear the rainforest, and then that fire would spread to dried out peatland, which can burn underground for weeks.

 you ended up with vast underground peat fires in Indonesia that you just couldn't put out. You just couldn't put them out. So they're just billowing it all out. Right. And a billion tons of CO2 were produced. (02:39:7)

From June to October 2015 about two and a half million hectares of Indonesia burned.

When Tim sees what is happening now with corn ethanol in the US and Brazil, he thinks about what his family members went through in Singapore.

 corn oil, um, and you say, okay, great, this thing is awesome and green, and now everybody starts to make sort of more corn oil, and that can sort of cause the displacement of land that was previously growing something else. And so then the question becomes how do you count that displaced amount of land into your accounting methods? (00:23.9)

Meaning there’s a domino effect to growing more corn for fuel.

In Mato Grosso, where Bruce Rastetter and his Brazilian business partners, Marino Franz, Paulo Franz, and Miguel Vaz Ribeiro, have driven a massive corn boom, we’ve seen displacement of a bunch of other kinds of agriculture and vegetation, not to mention a whole lot more pollution.

In the U.S., the environmental protection agency used to require that businesses account for this kind of impact, it was called land use and land use change

 (00:38.6) this sounds terribly dull and everybody's as an eyes, like immediately glaze over (00:44)  (00:45.9) but you and I know that this has enormous, absolutely transformational, in fact, horrific impacts upon the world, right? So 

when we did this kind of accounting in the American Congress, in, in the, 

in the 2007 sort of renewable fuel mandate, which is what created this enormous boom of corn ethanol in America well, what happened?

That’s the Renewable Fuel Standard that you heard Bruce Rastetter asking U.S. politicians in the last episode

(1:09.2) Let's talk about the RFS renewable fuels Next subject, the RFS.

Ag industry-backed politicians in the US congress fought to get rid of the requirement to account for land use change.

the cheapest oil that was used, um, for, for your cakes and for your cookies  um, you know, basically stopped becoming corn oil. Because corn oil prices went up because corn's demand went up. And so, well, what's gonna be the cheapest oil became the question. And lo and behold that answer, instead of corn oil became displaced into palm oil and palm oil is one of the most, like horrifically, like ecologically damaging things that happened was, uh, Indonesian rainforests were razed to the ground. Between 2007 and the next 15 years in the forests of Sumatra, Borneo, particularly Borneo, and those rain forests were raised to the ground and replaced with palm oil plantations 

So the corn ethanol boom in the U.S., driven by policies that the industrial ag business lobbied for, all under a giant green “renewable fuels” banner, increased the cost of food and created one of the world’s biggest ecological disasters and carbon dioxide emitters in less than 10 years.

 it's just like one of the most sort of shocking, shocking sort of, um, features of what happens if you don't take into account that displaced land effect,

Now ag businessmen are pushing for similar policies in Brazil.

That’s right, when the government started to regulate where sugar cane for ethanol could be grown, corn ethanol entrepreneurs saw an opportunity. Here’s Lucas Ferrante, the biologist at the National Institute for Amazonian Research that we (heard) from last time.

(39:19) People have to remember that one crop displaces another to an area that will be deforested. We have a finite amount of land. And if we’re introducing a new crop, and all the crops we have are expanding rapidly, where are the crops that made way for the sugarcane plantations going?

Again, when policies or the market encourage the expansion of a particular crop, that means whatever else was happening on the land it expands to–whether it was undeveloped land or planted with a different crop–is impacted.

When sugarcane plantations began to expand, some other crops—especially livestock farming—expanded significantly, particularly at the border between the Cerrado and the Atlantic Forest. So there was massive deforestation. Then, back in 2008, if I’m not mistaken, since sugarcane plantations were causing so much deforestation, a decree was issued by President Lula prohibiting their expansion into the Amazon and the Pantanal. The intention was very good, because it prevented high demand for a new crop from causing the degradation of that biome. However, the problem we need to remember is that the demand was for biofuels, not necessarily for sugarcane. 

So these companies circumvented the ban by using other crops—which are actually less efficient for [ethanol] production—to expand their cultivation in these vulnerable biomes. We need to make this clear: 

we need a ban on crops for biofuel production in these biomes, not just on sugarcane crops.

So a well-intended environmental regulation led not only to more deforestation to plant corn, but to the embrace of a new type of ethanol that everyone already knew was less efficient.

corn isn’t advantageous for biofuel production. Sugarcane is much more efficient. Corn is only being used because of the ban on sugarcane.

That’s right. And while we’ve been fôcuzd (focused) on one particular company and their approach this season, it is far from the only one. The problem is systemic. We’ve seen corn ethanol spread not just from the US to Brasil, but also from Brazil’s Midwest to other parts of the country. More than half the new corn ethanol plants being built in Brazil today are outside of Mato Grosso.

Green colonializãm (colonialism) isn’t green at all of course, it’s just regular old colonializãm (colonialism) with better markering (marketing). But why has it been so easy for fake green solutions to take root and spread?

I’m Felipe Sabrina with Intercept Brasil.

Great question Felipe, especially since it’s been far easier for these supposed solutions to take hold–even when there are so many examples of them causing new and sometimes worse environmental problems–than real ones.

Great question Felipe, especially since it’s been far easier for these supposed solutions to take hold than real solutions–even when there are so many examples of them causing new and sometimes worse environmental problems

Especially when those solutions–like reducing consumption and energy use–run counter to capiralizãms (capitalism’s) model of endless growth. Today, in our final episode, the bigger systemic problem that Bruce and the guys represent.

Welcome to the final episode of Carbon Cowboys

After the break, the three Cs: Capitalism, Colonialism, and Climate Change.

Some political economists trace capitalism back to the Industrial Age, but in certain countries–the U.S. and Brazil, for example–you have to start earlier…with agriculture.

  (00:45.4) in the centuries after Columbus makes landfall on Hispaniola, of course, in 1492.(00:52.5)

in feudal Europe, uh, a, a, uh, critical mass point, uh, was hit in the 14th century when the Little Ice Age arrived, and from there a great wave of peasant revolts defeated Europe's feudal ruling classes.

That’s environmental historian Jason Moore, he co-authored the book A History of the World in 7 Cheap Things about the way that capitalism has devalued nature and humanity.

The Little Ice Age lasted from 1300 to 1850. Scientists call it that because it only impacted the Northern Hemisphere, where temperatures dropped by a little more than half a degree. Side note: that half a degree brought forth a complete societal revolution, so people who say a degree or two of warming is no big deal need to study their history!

 And to make a very long and complex story short, ruling classes had to find a way to find riches and power because they had been defeated in the countryside of Western Europe.

To do that they had to look elsewhere, to other parts of the world where they might be able to acquire land and, with it, cheap labor. The Portuguese empire, which eventually colonizes Brazil, is the first in the world to colonize land outside its realm, beginning with the island of Madeira. The Spanish empire reaches the Americas first and immediately begins capturing and enslaving Indigenous people. Moore says there’s a specific way they’re able to justify this.

  (04:39) Nature enters into the vernacular at this point to mean not human. And oh, by the way, most human beings who work for a living are put into the realm of nature. Women become the savages of Europe, as Silvia Federici reminds us. The language of savagery, wildness, barbarism  comes directly out of the English experience in Ireland, where the English learned 

how to practice genocide, which they then extend to the rest of the world. (05:11) (13:27)  the Spaniards go and reorganize colonial Peru, and then the process redefine indigenous peoples as naturales, right, as part of nature. (13:36)

It’s at this point that we get the whole man versus nature framework that we still hear from industrial agriculture today, this idea that it’s “man’s” job to dominate nature and extract from it.

That message gets emphasized by religion. Here’s just one example from the preacher at the Baptist church in Sorriso, one of the towns near Lucas in Mato Grosso.

 – [2:52] Then God said, “Let us make humankind in our image. They will be like us. They will rule—repeat after me, they will rule—over the fish of the sea, over the birds of the sky, over the domestic animals, over the wild animals, over all the creatures of the earth, and over the creatures that crawl on the ground.”

Right, and Christianity intersects with not just colonialism and capitalism, but with the evolution of private property and agriculture, too, helped along by the idea that Christians are more civilized and evolved than Indigenous peoples.

Right, the “Doctrine of Discovery” gives Christians the right to take any land occupied by non-Christians

And the philosophical musings of John Locke suggest that land should be owned by those who can “improve it” by cutting down trees, planting crops, raising animals, and building homes. This further justifies taking land from Indigenous people because they aren’t “using it.” From there it’s just endless expansion. But at a certain point, colonists run out of land. That happens in the U.S. in the 1930s.

(00:00)  between World War I and World War ii, 

 that was the moment when there was no more land to settle. (00:07)

David Correia is a historical geographer at the University of New Mexico. He says in this moment, just before World War II, the U.S. makes a turn toward industrialization because that’s the only way to keep expanding, once the physical option of more land is no longer available.

We can't exist as a settler society 'cause there's no more land to settle onto. We're, there's no other way to resolve these contradictions.

 So this is the age of like new immigration restrictions, the industrialization of agriculture. 

Um, it's, it's, by the way, and how I got into it, 

it's the moment that like hybrid corn is, 

which dramatically increases yields, right?

Aha, there it is: corn! So the very first step the U.S. takes in the direction of industrialized agriculture is in the cornfield.

 if we can improve plants, we can improve people, right? So that this is the rise of eugenics.(00:58.3) (2:03)  the solution was convert the settler strategy of constant expansion into, a different….or the same strategy,

 we'll expand the genetic capacity of plants and the genetic capacity of people. So it's the same thing, an expansion. (03:37)  This is where the field of genetics is born. It actually starts in a cornfield. Where they're working on corn. So it's not an accident that it's a native crop that they focus all their energy on.(03:50)

First you take Indigenous land to “improve” it, then you take an Indigenous crop–corn, which had been grown by Native people in what is now the United States for 5000 years before the colonizers arrived–and “modernize” it.

This sounds familiar to us. In Brazil, agriculture has always been tied to two words: colonializãm (colonialism) and exports. Another long and complicated story. But ever since the Portuguese colonized the country, our economic cycles have been built around huge landholdings and monoculture crops looking to the international markets.

The idea of agricultural modernization, though—the one that fascinates people like Bruce and his business partners—is much more recent. It took off in the late 1960s, inspired, believe it or not, by the US model. That's when the machines arrived, along with pesticides, genéricali (genetically) modified seeds, and everything that came with them.

Yes! When Bruce talks about what attracted him to Brazil, he talks about how open the country is to “US technology.”

It's the country that most readily accepts US technology outside of the US,

Green colonializãm (colonialism) is like the next phase of that expansion.

[05’18’’]  foi a destruição ecológica causada pelo colonialismo, o que permitiu, séculos atrás, a partir de meados do século XVII, a criação de uma preocupação colonial pela preservação ambiental. [05’34’’]

[05’18’’] It was the ecological destruction caused by colonialism that, centuries ago—beginning in the mid-17th century—gave rise to a colonial concern for environmental preservation. [05’34’’]

Breno Bríngueu (Bringel) is a political science and sociology professor at the Institute of Social and Political Studies at the State University of Rio de Janeiro , and an editor of the book 

Colonialism), (vólium) Vol. 1: Geopolitics and Socio-Ecological Transitions

. He doesn’t argue with the idea that decarbonization and energy transition are critical to addressing the climate crisis, but he says green colonializãm (colonialism) isn’t doing any of that.

[09’03’’]  essa nova face do colonialismo verde, o que está fazendo é reproduzir as relações do colonialismo histórico, buscando uma nova legitimação social em torno da ideia de descarbonização. Porque quem vai ser contra a descarbonização? Essa é a questão. [09’22’’]

[09’03’’] This new face of green colonialism is essentially reproducing the dynamics of historical colonialism, seeking new social legitimacy around the idea of decarbonization. Because who would be against decarbonization? That is the question. [09’22’’]

Right! It’s a genius way to justify continued expansion but market it as something else entirely.

Exactly, Bríngueu (Bringel) points out that when it just continues to commodify nature, this new “green” colonializãm (colonialism) narrative is exactly the same as regular old colonializãm (colonialism).

[18’12’’] Quando a descarbonização se traduz prioritariamente em mercados de compensação, investimento em tecnologias que perpetuam desigualdades ou aumento de produção de matérias-primas verdes, Sem justiça social, sem justiça ambiental, vira canal de acumulação e reprodução do colonialismo verde. [18’30’’]

[18’12’’] When decarbonization primarily translates into carbon offset markets, investment in technologies that perpetuate inequalities, or increased production of green raw materials, without social justice and without environmental justice, it becomes a channel for accumulation and the reproduction of green colonialism. [18’30’’]

Silvia Secchi, an economist, geographer and professor at University of Iowa said something similar about how industrial agriculture approaches “sustainability” in the U.S.

 this is what these people excel at really farming the government and just kind of like coming up with the narrative 

 that will carry the day, right? And then 

without any compunction just switching to another narrative when the next narrative wins the day. (04:41)

And here, we’re going to come back to Bruce Rastetter.

(08:19.9) Rastetter has clearly been instrumental in promoting and, and supporting and navigating and shaping, 

uh, all this kind of like, um. Ethanol story, you know, and, and

but also, as you were saying, the carbon credits, uh, the money for cover crops, the money for, um, um, uh, conservation tillage.

 All these things are integral to this reimagining of ethanol as a

sustainable fuel. (09:01.9) (24:04)  it's 

Luquinha! And in fact FS: Fueling Sustainability, Bruce Rastetter’s Brazilian company has been doing the same thing. In addition to helping to start both the corn ethanol and carbon capture industries in Brazil, and pushing for the policies that will help them grow, FS has been a pioneer in what are called “green bonds.”

YES. Green bonds really exploded when the Paris Agreement was signed, in 2015. That agreement often gets pointed to as this great step forward for climate, and in some ways it was, but it also leaned really hard on the idea of involving the private sector more. And especially on the idea that financializing environmental gains was going to be this huge lever of progress, we just needed to reform the carbon offsets and credit markets to make sure those gains were real. On the sidelines of Paris, global investors even signed their own agreement, called the Paris Green Bond Statement. I don’t know about you Felipe, but I’m not a big finance bro…

No, me neither. So we called up Vanessa Parreira Perin at the Federal University of São Carlos. She wrote a whole paper on green bonds in Brazil, and she walkdãs (walked us) through it.

[03:46] uma corporação, um Estado, parte do Estado, né, pode ser um município, pode ser um órgão, por exemplo, o BNDES, ele precisa de dinheiro pra implementar uma certa atividade, então ele vai buscar captar diretamente com investidores.  Então ele emite esse documento, esse título de dívida, e aí ele é apresentado pra esse, pra uns investidores. (4'45'')  Então, mas por que que é o verde, né? O verde é porque ele vai passar por algumas etapas pra dar a credibilidade. (...) Um título verde, ele tem que ter alocação dos recursos dele, colocado exclusivamente em projetos, em atividades ou mesmo em ativos, né, por exemplo, uma usina, que vá criar benefícios ecológicos, né? É, tem que ser ambientalmente sustentável.

a corporation, a government—or a branch of the government, like a municipality or an agency, for example, the BNDES—needs money to carry out a certain activity, so it goes out to raise funds directly from investors.  So it issues this document, this debt security, and then it’s presented to these investors. (4’45’’) So, but why is it green, right? It’s green because it goes through certain stages to establish credibility. (...) A green bond has to have its funds allocated exclusively to projects, activities, or even assets—like a power plant, for example—that will generate ecological benefits, right? Yeah, it has to be environmentally sustainable.

Vanessa says part of Brazil’s openness to U.S. technology is that technological approaches are viewed by financial markets as things that stabilize agriculture  and make it a good investment. There are so many variables in agriculture–funguses, bugs, extreme weather. Chemicals and machines are seen as a way to control these variables…today’s version of man versus nature.

So the finance market in general created all these tools to support a certain type of “modernized” agriculture, that expansion that Correia talked about. And then green bond market provided the fináncin (financing) for green colonializãm (colonialism).

esse movimento é a partir do começo dos anos 2000,

 12'32''  Os Estados são ineficientes, bem nessa lógica neoliberal, né, de que o ca-- o Estado não é capaz de, de regular o que vai ser feito, né, com esse dinheiro, e é muito dinheiro que vai ser necessário. Então a gente vê como é-- 

que começam a surgir acordos buscando trazer esse capital privado pra canais que possam chegar a projetos de desenvolvimento sustentável, né?

We see this movement beginning in the early 2000s–where we see how agreements are starting to emerge that aim to channel private capital into initiatives that can support “sustainable development projects,” right?

To issue a green bond, you have to go through four procedures. First, you write up a framework.

O governo brasileiro, por exemplo, tem um arcabouço. É, e aí nesse framework, ele precisa dizer onde ele-- o uso dos recursos, onde ele vai alocar os recursos que ele vai receber. E tem que ser nos projetos elegíveis, 

tem que ser, é, projetos que estejam nessa lista, né, que, que os green bonds principles trazem.

The Brazilian government, for example, has a framework. Yeah, and then in that framework, they need to specify 

where they’ll allocate the funds they’ll receive. And it has to be for eligible projects;

 it has to be, you know, projects that are on that list, right, the one provided by the Green Bond Principles.

Then you have to describe the sustainability of the activities you’ll use the green bond for.

Tem uma terceira etapa, quer dizer, como vai ser monitorado ao longo do tempo, né, durante o período que ele vai tá recebendo, né, esses títulos ver-- esse dinheiro do título verde, esse investimento.

There’s a third step—that is, how it will be monitored over time, right, during the period it’s receiving these green bond proceeds—this green bond money, this investment.

But again, monitored by the company, which also reports on their progress.

E depois, ele tem que, uma quarta etapa, que é como que ele vai, é, divulgar esses dados, assim. Então, é s-- é basicamente declaratório, né? Tipo, eu vou fazer isso, depois eu vou fazer aquilo, vou mo-monitorar desse jeito e vou declarar dessa forma. Não quer dizer que a ICMA vai acompanhar isso, ela não vai fazer isso, ela só criou essa referência.

And then, there’s a fourth step, which is how they’re going to, you know, disclose this data. So, it’s—it’s basically declaratory, right? Like, I’m going to do this, then I’m going to do that, I’m going to monitor it this way, and I’m going to report it that way.

When they first came about in 2007 and for the first decade or so of their existence, green bonds were mostly issued by international development banks, like the World Bank. But beginning in 2016, on the heels of the Paris Climate Accord, more corporations and governments started to get in on the action and the market exploded. By 2020, the green bond market was approaching 300 billion dollars and by 2022 it had ballooned to 2 trillion dollars. Various methods have been developed to verify the environmental gains funded by green bonds, and our friends at FS have embraced all of them, but Perrin says it’s more about paperwork and self-reporting than actually verifying environmental benefits. .

a ideia é que o Estado não precisa participar, né, dessa, dessa regulamentação, da verificação. Ele mesmo vai se autorregular através de, criando-se, é, partes entre os, dividir os stakeholders, né?

O termo que, que eles usam, né, as partes interessadas, e elas vão se, de alguma forma monitorar. Então você tem ali a, o emissor, ele é a primeira parte interessada. Depois você tem uma segunda parte, é, que são as SPOs, são as Second Party Opinions, que são empresas que fazem consultoria na área ambiental, na área de engenharia, na área de gestão, que, é, quem vai de fato avaliar um título verde.

E você tem terceiras partes que são instituições, por exemplo, como a CBI, a Climate Bonds Initiative, que são, é, geralmente organizaç-- associações ou organizações, é, sem fins lucrativos, no caso da CBI, em que eles vão criando padrões, né? Eles criam referências do que que é considerado uma atividade sustentável, né?

Transcription

Treating climate solutions like an infinite money cheat might not be a great way to actually solve the problem, though it's sure to make plenty of "green" entrepreneurs rich. It makes sense that businessmen would stay focused on profits, but why do climate advocates keep supporting these ideas?

 You can get the show in Portuguese on their feed as well.

False Solutions and Climate Delay

S15, Ep6 | A Tipping Point

Drilled A true-crime podcast about climate change, hosted by investigative journalist Amy Westervelt. Listen here, or wherever you get your podcasts .

A true-crime podcast about climate change, hosted by investigative journalist Amy Westervelt. Listen here, or 

A true-crime podcast about climate change.

Drilled

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S15, Ep6 | A Tipping Point

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Isolated and Without Food in Brazil's Corn Ethanol Capital

Why Is Brazil’s Climate Fund Giving Hundreds of Millions to Big Ag?