‘Politics of plenty’ behind Brazil’s troubled ‘green energy’ model

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Brazil’s branding as an economy poised for superpower status through its “green” energy landscape is in trouble. Reuters Analysis shows that Brazil’s plans 5 years ago to capitalize on its home-grown sugarcane ethanol as the main automobile fuel and make renewable hydro power account for three-quarters of electricity were hit by one of the worst droughts in decades, and the heavy-handed government intervention at the expense of the private sector. The state’s role in forcing a 20% decline in electricity prices, the world’s 3rd highest, has turned off energy investors even if the country’s recently elected leaders meant this to control inflation and help stir the broader economy. Brazil’s economy likely grew less than 1% in 2012, one of the lowest rates in Latin America. At the core of the ongoing problems is a truism that Eurasia Group director pointed out: These lofty plans were bred from an excessive optimism during the rosy years. “Brazil has become a victim of the politics of economic plenty,” said Christopher Garman, Latin American director of the political risk and economic consulting group.


Fead more on Reuters.

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