Poverty in Brazil decreased from 20.9% in 2016 to 18.4% in 2020, contrary to Latin America and the Caribbean (LAC) average, which increased slightly from 25.9% to 26.3% in the same period. Brazil’s trend can be explained by the wide fiscal support (with cash transfers and tax packages) during 2020 to alleviate the economic impact of the COVID-19 pandemic. Extreme poverty decreased in that period, from 5.3% to 5.1% and remains below the LAC average (8.7%). The population living in completely informal households decreased from 37.7% in 2009 to 29.7% in 2018, compared to the LAC average of 36.3% in 2018. Regarding environmental indicators, in 2019, total greenhouse gas (GHG) emissions per capita were 5.0 tonnes of carbon dioxide equivalent (t CO2e), lower than the averages for LAC (6.3) and for countries belonging to the Organisation for Economic Co-operation and Development (OECD) (9.1). That year, the share of the population exposed to air pollution levels that pose risks to human health (PM2.5 at more than 10 µg/m3) was 81.7%, lower than 95.4% for LAC and higher than 61.0% for the OECD. The marine protected areas accounted for 26.8% of Brazil’s territorial waters in 2021, compared to 7.3% for LAC and 18.6% for the OECD. On the fiscal side, environmentally related tax revenue was 0.7% of gross domestic product (GDP) in 2020, lower than LAC (1.0%) and the OECD (2.1%). Total tax revenues as a percentage of GDP (31.6%) remain higher than the average for LAC (21.9%), but below the OECD (33.5%).
Latin American Economic Outlook 2022
Brazil
1. Recent trends
2. Long-term development policies for a green transition
Brazil plays a key role in the green transition, as it is home to about 60% of the world’s rainforest area. Two of the country’s key sustainable policies are the National Policy on Climate Change (2009), which is currently being updated, and the National Programme for Green Growth, which aims to promote green jobs.
Brazil’s mitigation actions build on key sectoral plans, notably in agriculture, energy, and forest protection. To record offset and trade GHG emissions, a National System for the Reduction of Greenhouse Gas Emissions (SINARE) was established in 2022. Brazil launched the updated National Plan for Adaptation and Low Carbon Emission in Agriculture (ABC+ 2020-2030), which promotes new technologies and sustainable practices in agricultural systems. Additionally, the National Bioinputs Program (2020) fosters the use of bio-based products in agriculture. Regarding energy, the National Energy Plan 2050 places a strong emphasis on expanding hydropower capacity and includes actions regarding the oil and gas sectors. Brazil also takes a sectoral approach to adaptation, guided by the National Adaptation Plan to Climate Change (2016), which defines 11 priority sectors.
Brazil’s international partnerships focus mainly on forest conservation. Within LAC, Brazil participates in the Amazon Cooperation Treaty Organization (1995), which launched an integrated water management programme in the Amazon Basin. In 2020, Brazil joined the TerrAmaz programme with the Amazonian countries to monitor deforestation and promote sustainable agricultural practices, with funding from the French Development Agency (AFD). Beyond the region, the Partnership for the Conservation of Amazon Biodiversity and the United States Agency for International Development (USAID) promote private-sector engagement through the Partnership Platform for the Amazon. The Development Bank of Minas Gerais (DBMG), in partnership with the European Investment Bank (EIB), finances a series of climate actions and renewable energy projects.
Concerning green finance, Brazil created the National Fund on Climate Change (2009) and the Amazon Fund (2008), to provide funding for Brazil’s REDD+ (Reducing Emissions from Deforestation and Forest Degradation) strategy adopted in 2016. Brazil’s National Development Bank for Economic and Social Development (BNDES) partnered with the Climate Bond Initiative to attract international investments for sustainable projects and improved banking environmental, social and governance indicators. The BNDES was the first Brazilian bank to issue a green bond in the international capital market in 2017, and the first to issue green financial bills in 2020 in the domestic market. In 2021, the BNDES launched the Sustainability Bond Framework and created its own Sustainable Taxonomy. The value of the Brazilian sustainable bond market grew 177% from 2020 to 2021. Brazil’s voluntary carbon market is expected to grow rapidly thanks to the SINARE, which provides a market infrastructure, and the National Payment Policy for Environmental Services (2021), which encourages its use.
Key indicators – Brazil
|
|
Brazil |
LAC |
OECD |
|||
|---|---|---|---|---|---|---|
|
Social |
|
|
|
|||
|
|
2016 |
2020 |
2016 |
2020 |
2016 |
2020 |
|
Extreme poverty |
5.3 |
5.1 |
8.1 |
8.7 |
N/A |
N/A |
|
Poverty |
20.9 |
18.4 |
25.9 |
26.3 |
N/A |
N/A |
|
Share of Internet users (% of population) |
60.9 |
81.3 |
53.7 |
68.1 |
81.8 |
88.0 |
|
|
2016 |
2020 |
2016 |
2020 |
2016 |
2019 |
|
Gini index |
53.3 |
48.9 |
46.3 |
45.3 |
34.9 |
34.2 |
|
|
2009 |
2018 |
2009 |
2018 |
2009 |
2018 |
|
Share of total population in informal households (%) |
37.7 |
29.7 |
43.4 |
36.3 |
N/A |
N/A |
|
Share of total population in informal households, upper-income quintile (%) |
23.8 |
10.7 |
24.5 |
13.6 |
N/A |
N/A |
|
Share of total population in informal households, lower-income quintile (%) |
71.3 |
70.5 |
70.4 |
72.0 |
N/A |
N/A |
|
|
2016 |
2019 |
2016 |
2019 |
2016 |
2019 |
|
Health expenditure (% of GDP) |
9.2 |
9.6 |
6.5 |
6.8 |
8.7 |
8.8 |
|
SIGI index |
N/A |
21.2 |
N/A |
25.4 |
N/A |
17.5 |
|
|
2015 |
2018 |
2015 |
2018 |
2015 |
2018 |
|
PISA score in science |
401 |
404 |
411 |
407 |
489 |
487 |
|
Productivity and innovation |
|
|
|
|
|
|
|
|
2016 |
2021 |
2016 |
2021 |
2016 |
2021 |
|
Labour productivity (% of the United States) |
26.6 |
25.6 |
29.0 |
26.6 |
69.9 |
67.2 |
|
|
2016 |
2020 |
2016 |
2020 |
2016 |
2020 |
|
High-tech exports (% of manufactured exports) |
16.0 |
11.4 |
8.4 |
7.2 |
16.5 |
16.2 |
|
|
2016 |
2019 |
2016 |
2019 |
2016 |
2019 |
|
R&D expenditures (% of GDP) |
1.3 |
1.2 |
0.3 |
0.4 |
1.8 |
2.0 |
|
Citizens’ perceptions and institutions |
|
|
|
|
|
|
|
|
2016 |
2021 |
2016 |
2021 |
2016 |
2021 |
|
Share of population satisfied with efforts to preserve the environment (%) |
37.8 |
23.1 |
46.2 |
42.0 |
55.3 |
51.2 |
|
Share of population with confidence in national government (%) |
26.4 |
32.7 |
34.2 |
39.4 |
40.3 |
46.3 |
|
Share of population that thinks corruption is widespread throughout government (%) |
78.5 |
71.1 |
74.5 |
70.0 |
59.0 |
54.9 |
|
Share of population satisfied with the education system (%) |
48.3 |
51.7 |
64.9 |
54.3 |
67.0 |
66.8 |
|
Share of urban population satisfied with the availability of quality health care (%) |
30.7 |
42.2 |
49.2 |
48.9 |
68.2 |
69.5 |
|
Environment and the green transition |
|
|
|
|
|
|
|
|
2004-19 |
|
2004-19 |
|
2004-19 |
|
|
Loss of natural and semi-natural vegetated land (%) |
0.8 |
|
1.5 |
|
1.3 |
|
|
|
2016 |
2019 |
2016 |
2019 |
2016 |
2019 |
|
GHG emissions per capita excluding LUCF (t CO2e) |
5.2 |
5.0 |
6.3 |
6.3 |
9.6 |
9.1 |
|
Air pollution – exposure to PM2.5 (annual average exposure to more than 10 µg/m3, % of population) |
76.3 |
81.7 |
95.5 |
95.4 |
61.3 |
61.0 |
|
|
2016 |
2020 |
2016 |
2019 |
2016 |
2020 |
|
Contribution of renewables to total primary energy supply (%) |
42.6 |
47.8 |
34.2 |
33.4 |
19.7 |
22.9 |
|
|
2016 |
2021 |
2016 |
2021 |
2016 |
2021 |
|
Marine protected areas (% of territorial waters) |
1.7 |
26.8 |
2.5 |
7.3 |
16.5 |
18.6 |
|
Fiscal position |
|
|
|
|
|
|
|
|
2016 |
2020 |
2016 |
2020 |
2016 |
2020 |
|
Environmentally related tax revenue (% of GDP) |
0.9 |
0.7 |
1.1 |
1.0 |
2.4 |
2.1 |
|
Total tax revenues (% of GDP) |
32.2 |
31.6 |
22.2 |
21.9 |
33.6 |
33.5 |
|
Share of VAT (% GDP) |
6.6 |
7.0 |
5.8 |
5.6 |
6.6 |
6.7 |
|
Share of PIT (% GDP) |
2.6 |
3.0 |
2.1 |
2.2 |
7.8 |
8.3 |
|
Share of CIT (% of GDP) |
3.2 |
2.7 |
3.3 |
3.4 |
2.9 |
2.7 |
|
Perception of tax evasion (%) |
N/A |
24.5 |
N/A |
27.3 |
N/A |
N/A |
|
Debt service (% of total tax revenue) |
20.2 |
13.2 |
11.3 |
13.0 |
5.6 |
5.2 |
|
|
2016 |
2020 |
2016 |
2020 |
2016 |
2019 |
|
Social expenditure (% of GDP) |
17.3 |
22.5 |
11.5 |
13.6 |
20.0 |
19.9 |
Note: See the Reader’s Guide for definitions and sources.