Are Brazilian Carbon Emissions growing more than the GDP

The main headline of the Folha de São Paulo newspaper in its September 19 edition was “Pollution grows more than the GDP in the country”, reporting the Carbon Balance in the Energy Activities study carried out by the Economy and Energy Organization and published in the Nº 62 issue of its periodical. The article of Claudio Angelo, science editor of Folha, called attention to the fact that GHG emissions between 1994 and 2005 grew 45% while the GDP grew 32%.

The article’s approach is relevant because if developing countries like Brazil claim that they cannot restrict their economic growth in order to reduce emissions, it may seem odd that Brazilian emissions are growing more than the GDP.

However, one cannot ignore that our base is an energy matrix that is exceptionally “clean” in terms of GHG and we should not be punished for that. The implicit question in the concern expressed by the Folha’s article is if Brazil could continue growing with the same clean matrix it has presently.

In one of its aspects our energy matrix could be not so clean. This is the case of hydraulic energy whose share has been reducing and will continue to be reduced. This is happening due to the difficulties regarding the construction of large reservoirs which makes it necessary a thermal complementation to regulate the supply. In the long term there are also limitations of the potential that can be economically exploited. As alternatives one has biomass and nuclear power plants that have no direct emissions.

The other inevitable demand growth in the present economic model is due to the increase of individual vehicles use. However, this need can be satisfied by carburant alcohol.

Before answering the question made by Folha, it is worthwhile to analyze and compare the evolution of GHG emissions and that of the GDP since the necessary statistics are available. In Table 1 are shown the GDP values expressed in 2005 dollars and the total GHG emissions in Brazil.

Year	GDP US$bi 2005(1)	Emissions million t C(2)	Emissions (3) kgC/1000 US$ 2005	C Emissions relative to 1994	GDP relative to 1994
1970	225.5	22.2	99	35	34
1971	251.0	24.8	99	39	38
1972	281.0	27.0	96	43	42
1973	320.3	31.8	99	50	48
1974	346.4	34.3	99	54	52
1975	364.3	36.8	101	58	54
1976	401.6	40.4	101	64	60
1977	421.5	42.0	100	67	63
1978	442.4	45.8	103	73	66
1979	472.3	48.6	103	77	71
1980	515.8	48.0	93	76	77
1981	493.9	45.2	91	72	74
1982	498.0	45.7	92	72	74
1983	483.4	43.8	91	70	72
1984	509.5	44.4	87	70	76
1985	549.5	47.6	87	76	82
1986	590.6	52.2	88	83	88
1987	611.5	53.6	88	85	91
1988	611.1	54.9	90	87	91
1989	630.4	55.7	88	88	94
1990	603.0	54.5	90	86	90
1991	609.2	56.7	93	90	91
1992	606.4	58.1	96	92	91
1993	634.6	60.4	95	96	95
1994	668.5	63.0	94	100	100
1995	698.0	67.8	97	108	104
1996	713.0	73.1	103	116	107
1997	737.1	77.9	106	124	110
1998	737.4	80.1	109	127	110
1999	739.2	82.4	112	131	111
2000	771.1	85.6	111	136	115
2001	781.2	87.6	112	139	117
2002	802.0	87.2	109	138	120
2003	811.2	85.4	105	135	121
2004	857.5	89.7	105	142	128
2005	882.7	91.1	103	145	132
2006	915.4	91.1	99	145	137

In Figure 1 are shown the GDP evolution and that of carbon emissions relative to 1994 (last year of the national Inventory).

Figure 2 shows that in Brazil emissions have been oscillating around the historical average of 98 kilograms of carbon by one thousand dollars of 2005. The value for 2006 (99 k C/1000 US$ of 2005) is practically equal to the average value of the 1970/2005 period and the emissions growth between 2005 and 2006 is practically zero (reduction of 0.005%), in spite of the fact that the GDP grew 3.7%, as shown in Table 1.

Figure 2 shows that the decrease, recovery and new decrease of carbon content in the GDP coincides with the petroleum price shocks. It should be remembered that petroleum corresponded (in 2006) to 70% of fossil fuels in Brazil since mineral coal (16%) and natural gas (14%) still have a relative modest share in emissions due to its also modest share in the Brazilian energy matrix.

That is, from 2001 on carbon emission in the energy activities are growing less than the GDP.

Figure 1: Evolution of Carbon Emissions in Energy Activities compared to that of the GDP, showing a larger increase than that of the GDP from 1994 on and a reversal of this trend from 2000 on.

Figure 2: Carbon Emissions per dollar of product in Brazil, showing a decrease after the second petroleum price shock (1979) that was reversed by the “cold shock” of 1986 and its recovery after 2001.

Figure 3 shows the evolution of petroleum prices in US$ of 2006, illustrating the four petroleum shocks. It should be noted that in Brazil the first shock is not evident in Figure 2 because at that time the country was experiencing the “economical miracle” driven by the simultaneous high price of commodities. It is interesting to point out that the average values of 2007 and of the first semester of 2007 did not exceed the average values of 1979 and 1980, around 90 dollars per barrel. However, the daily Brent quotations have exceeded 100 dollars per barrel in the second semester of the present year.

Figure 3: Average annual oil prices, showing the four petroleum price shocks, including the “cold shock” of 1986; the prices correspond to annual average value and those of 2007 refer to the first semester.
SOURCE: BP

2 – Sectors Contribuition to Carbon Emissions

The National Energy Balance - BEN, annually edited by EPE/MME (Energy Research Enterprise of the Ministry of Mines and Energy), presents economic data relative to sectors that are compatible with those adopted for energy. This permits to follow the evolution of energy intensity of the different sectors (Energy/ GDP of sector). Using emission data from the bal_eec software and using economical data available at BEN it is possible to estimate the intensity or carbon content in the use of energy by sector. For this purpose one should aggregate the carbon emission data calculated by the program in the same aggregation of BEN’s economic and energy data.

Table 2 shows the economical data (product by sectors) and Table 3, the final energy consumption data by sector supplied by BEN. Data are presented in intervals of five years. Table 4 shows carbon emissions data. It should be noted that emission relative to electricity generation was incorporated in the emission of each sector in proportion to its consumption.

It should be pointed out that the GDP data are still expressed in the structure published in 2006 and that was subsequently changed by IBGE. The changes concerning the GDP altered the relative shares in the GDP but they should not substantially alter the behavior along time of the emissions/ GDP ratio even though they influence its absolute value.

The emissions corresponding to the final energy consumption are comparable to the total emissions in the energy area shown in Table 1. However, one should keep in mind that the GDP values were changed in 2007 by IBGE. When one compares, the GDP value in 2005 has changed from 883 US$ billion (data of Table 1 corresponding to the 2007 calculation) to 796 US$ billion (data of Table 2 from the 2006 calculation) and it is coherent with the nominal variation of the GDP in the two calculations which was about 10% in nominal value (see article about National Accounts in this issue). There is still a difference in emissions between the data in Table 1 (emission of 91.1 million tC) and those of Table 4 (87.7 million tC) that refers to final consumption and do not include emissions regarding the non energy use and the NG not used.

Table 4: Carbon Emissions per Non Renewable Fuels Including Emissions from Electric Generation 10³ tC

Table 5 shows carbon emissions due to final energy consumption in the sectors per one thousand dollars of product for the different sectors. Figure 4 compares these values for the main sectors. It is interesting to note that when the transport sector is included in the services sector the intensity of this sector is comparable to the other ones as the intensity of commerce and others is to low (7 kgC/1000 US$ in 2005) which compensates the high intensity of the transport sector (2317 kgC/1000 US$ in 2005). It should be pointed out that in the transport sector emission it is included that of automotive gasoline used in the individual transport (about 30% of the total).

Even when a correction is made, the emission per product dollar added to transport is one order of magnitude above the average value.

By comparing emissions by sector one can see in Figure 5 that with inclusion of transport in the service sector there is a similar percent distribution in the product of the sectors and in the emissions by sector of GHG.

Figure 4: Carbon emissions and product by sector;
transports are included in the services

Figure 5: Comparison of the distribution of product by sector and of the energy and emissions shares; it is observed proximity between the product and emissions distribution of the GHG when transport is
included in the services sector.

Figure 6 shows the evolution of the GHG emission/product ratio. The curve for final consumption including residential consumption corresponds to the curve shown in Figure 2, except for the differences already pointed out in the emissions (non used natural gas and non energy consumption) and in the product (change of base). It is also represented the curve relative to the industrial sector where it was recorded the increase of emissions per product. Both the Industrial and Service Sectors reached a minimum value around 1986 which was the year of the oil prices “cold shock”. The industrial sector had a quicker reaction concerning oil prices increase at the beginning of 2000[1].

It can also been seen in Figure 6 that the emission coefficient by product has increase in the Agriculture and Husbandry sector probably due to the mechanization process that has increased the use of non renewable fuel (mainly diesel oil) in the sector. This change cannot be followed in Table 3 where biomass (mainly firewood) is included and whose consumption has decreased in the same pace of the diesel increase.

Figure 6: Evolution of carbon emissions coefficient by product for the main economic sectors.

3 - Carbon Emissions by Industrial Activity

Carbon emissions in industry are concentrated in some activities that aggregate relatively low GDP value. Comparison of industrial activities share in the product and in carbon emissions are shown in Table 6 and Figure 7. The activity Other that groups manufactures aggregates much value but it is not responsible for emissions. On the other hand, the Metallurgy activity, responsible for 10% of the GDP is responsible for more than half of the carbon emissions.

Figure 7: The share of emissions in the several industrial activities is quite different of that of the product and even of the final energy

Table 6: Share in the Product, Final Energy and
Carbon Emissions of the Industrial Activities

It can be noticed that the emission share is also different from the energy share not only because the biomass products (whose emission is not considered) are included, as in the case of Food and Beverage but also because there is much difference in emissions by energy unit. They are larger for compounds like steam or metallurgical coal that have that have a hydrogen proportion smaller than that of natural gas.[2] That is the reason why Metallurgy, that includes the part connected with the steel industry, has a high emission index.

In Figure 8 it can be observed a large difference between the carbon emissions/product ratio of Metallurgy, that reaches 563 kg of carbon per thousand dollars of product, and that of the “Others” item, that is only 12 kg of carbon per thousand dollars of product.

Figure 8: The emissions by product are much different
in the various industrial activities.

In the scale beside Figure 8 it is indicated the emission in kg of CO2 per dollar^{^[3]}. It is evident that the change in the profile of the industrial activities could result in a considerable reduction of emissions. This is valid mainly for the exported products that are not part of the Brazilian production chain for internal consumption.

The evolution of emissions by product (aggregated value) is shown in Figure 9 for the considered industrial activities. The activities that show higher carbon emissions per product unit, Metallurgy, Mineral Extraction and Non-Metalic, also present large variations along time. There has been a considerable increase of carbon content by product in Metallurgy (surprisingly after the first petroleum shock), probably due to change in the industry profile. Regarding Mineral Extraction there was a large increase from 1985 on.

Emission in the Non Metallic activity, whose main component is cement, shows the large capacity of this sector to absorb the most varied types of energy sources. As can be observed in Figure 10, this sector absorbed, after the second petroleum shock, additional biomass and mineral coal for which incidentally was established a transport subsidy program. With the decrease of oil prices the subsidy to carbon transportation was ended and there was a large increase in the use of petroleum products, notably petroleum coke (a refining residue) in the cement industry. After 2000 there was an expressive penetration of NG which is a fuel with large comparative advantages in the ceramics industry.

Figure 10: Carbon Emissions in the “Non Metallic” Activity (cement and ceramics) that show the variation due to fuel substitution; emissions of renewable fuel (biomass) are not accounted for in the Inventory and are represented by an “unfilled” surface.

4 – Conclusion

In Brazil carbon emissions by unit of product have followed the evolution of the international petroleum prices: they were reduced with the oil price increase after the second shock (1979) and have increased after the “cold shock of oil prices (1986). With its new price increase and the recovery of the commodities prices (2001) at the beginning of the present century, emissions decreased again.

The industrial structure, concentrated on metallurgical products, is responsible for most part of the emissions increase from 1986 on in the industrial activities.

In order to maintain stable the carbon emissions/GDP ratio, Brazil will have to compensate in other sectors the probable emissions increase that is expected in electricity generation; energy conservation measures, substitution by biomass and changes in the industrial structure seem to be effective concerning this reduction. The change of the industrial structure to the benefit of products with more aggregated value (and technological content) emerges from the analysis as a way to reduce carbon emissions by product.

[1] It should be remembered that the analysis (emissions by product) does not allow concluding that this decrease was due to the reduction of emissions or to the relative increase of prices that modifies the weighting (for the subsequent year) and the reference price of the sectors in the movable base system of IBGE. An analysis at constant prices could solve the doubt regarding the prices’ behavior.

[2] Most of the energy sources produce energy through the reaction of carbon and/or hydrogen with oxygen which is the burning process. The higher the carbon content, the higher is the quantity of carbonic gas. The higher the hydrogen share in the fuel molecules, the lower the emissions (zero in the case of pure hydrogen), since when this element is burned only water is generated. Among the fuels that exist with a relative abundance in nature (hydrogen must be produced from another form of energy), the largest emission is that of coal (almost only carbon) and the lowest is that of natural gas (one carbon atom and four of hydrogen).

[3] The CO₂ quantity is obtained by multiplying the C mass by 44/12. On the right scale the values of the product are given in dollar of 2005 and on the left one, by thousand dollars.

New Data in the National Energy Balance – 2007

Are Brazilian Carbon Emissionsgrowing more than the GDP?

Are Brazilian Carbon Emissions

growing more than the GDP?

1 – Carbon Emissions and GDP

2 – Sectors Contribuition to Carbon Emissions

3 - Carbon Emissions by Industrial Activity

4 – Conclusion