Automakers’ Stimulus Ignores Green Economy
The package to stimulate the economy launched by the federal government is the target of criticism by economists and businessmen who say Brazil missed an opportunity to set the auto industry on the path to sustainable development.
Automakers will benefit from the package, which includes excise tax reduction, more credit, and lower interest rates for consumers to buy on credit.
Critics believe that as the government encourages sales of cars, buses and trucks, it should have required automakers to invest in energy efficiency, reduction of greenhouse gases, and recycled materials in their production processes, adopting medium and long-term goals. Instead, however, automakers and the government agreed to reduce retail prices and to avoid layoffs.
“The measure will empty automakers’ stockyards and fill the streets,” says Ricardo Abramovay, a professor at USP. “Amid the discussion on the green economy, Brazil is stimulating the old economy’s principles,” says Abramovay.
Abramovay highlights that in 2009, the American government agreed to help automakers in compensation for better energy efficiency for engines. He says the Brazilian package could have required the same, as well as making investments in the infrastructure of public transportation.
The president of the Brazilian Business Council for Sustainable Development, Marina Grossi, says Brazil missed the chance to consolidate its leading position in sustainable development, which she says was achieved by chance — a result of Brazil’s clean energy matrix and rich biodiversity.
“An important step towards a greener economy is to redirect incentives and subsidies,” says Grossi, stressing that Brazil sends out mixed signals with measures like this. “Brazil has a plan on climate change, a solid residue law, and the country also will include sustainable criteria in its purchases, but at the same time, the government launches measures like this,” she says. Grossi believes that generates a “feeling of frustration” in businessmen who already are concerned about sustainability. She says, however, such feeling is not enough to discourage companies with strategic vision.
The president of Instituto Ethos, Jorge Abrah, says the measures to stimulate the economy are important, but it is important to consider their consequences. “The value of Brazilian products will rise when they are identified as sustainable. The government could help that process.”
[This article was written by Denise Menchen and translated by Thomas Muello and appeared originally on Folha.com May 26, 2012.]