Brazil Offers Lifeline to Coal After UN Calls for ‘Death Knell’

(Bloomberg) -- Brazil is offering a lifeline to its coal industry even as the world’s scientists make it crystal clear that fossil fuel use must stop to avoid the worst effects of climate change.

Brazil’s Mines and Energy Ministry on Monday published details of a new program that would support the coal sector through 2050 in the country’s southern states, where mines are major employers and thermal power plants provide substantial generation capacity.

The Program for the Sustainable Use of National Mineral Coal aims to draw about 20 billion reais ($3.9 billion) in investment over the next 10 years, according to the proposal published on the ministry’s website. It calls for modernizing coal power plants to make them more efficient, and allowing electricity from such generators to be sold through 2050, when the country plans to reach complete decarbonization of its power sector. It also includes special tax regimes for coal and directing public research resources to the sector.

The proposal came the same day as the release of a United Nations report pinning total responsibility for climate change on human behavior, such as releasing heat-trapping carbon dioxide by burning fossil fuels for energy. The report must be a “death knell” for coal and other fuels, UN Secretary-General Antonio Guterres said.

To be sure, Brazil is a minor consumer of coal, burning as much in a year as China does in three days. Still, the coal program is the latest example of Brazil being out of step with other major economies when it comes to climate change. President Jair Bolsonaro’s cabinet has sought to draw foreign capital to sectors like oil exploration and investment in the Amazon rain forest.

Nearly all of Brazil’s coal reserves, along with six power plants with a combined capacity of 1,572 megawatts, are located in the southern states of Santa Catarina, Rio Grande do Sul and Parana. A drastic slowdown in coal use would have negative social and economic impacts to the region, the ministry report said.

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