Brazil elections: Where do the candidates stand on energy?

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Wednesday, December 27, 2017

Brazil might halt one of the country's key energy sector initiatives in the wake of the presidential election in late 2018, since the two frontrunners are both against the privatization of Eletrobras.

Leading the race with 17% of preferences, according to Datafolha's latest poll, Luiz Inácio Lula da Silva of the workers party (PT) has compared the state-run electric power holding's sale to an unemployed worker who keeps pawning his belongings instead of seeking a new job.

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"I've heard the government is planning to sell Eletrobras, a company that has received over 400bn reais [US$121bn] in investments, for 20bn reais, and they think it's a great deal," Lula said in a video posted by senator Humberto Costa on social media.

The former president (2002-10) has been visiting several regions of the country as part of his pre-electoral campaign while appealing against a jail sentence of over nine years for his role in a corruption and money laundering scheme.

For his part, former Brazilian army officer Jair Bolsonaro of the Christian social party (PSC), who has the backing of 11% of those polled, has said he would not include anything considered to be strategic in the country's privatization program.

"Electric power is vital, and therefore cannot be handed over to other countries," he said in a video published in August. "I'm in favor of privatizing many things in Brazil, but not in the energy sector".

However, that does not apparently apply to state-run oil firm Petrobras, whose privatization would be in Bolsonaro's plans if elected, according to an interview published in a local newspaper.

Another point that has often been raised by the hardline candidate, a congressman representing Rio de Janeiro state, is the need to speed up environmental licensing processes, including for new hydroelectric plants in the Amazon region.

NATIONAL DEVELOPMENT

A staunch opponent of Bolsonaro, Ciro Gomes of the democratic workers party (PDT) agrees with the PSC candidate when it comes to Eletrobras' privatization.

"No serious country in the world would hand over to private capital, least of all foreign capital, its hydrology. Water is the 21st century's biggest battle," he warned during a presentation to Eletrobras employees in Rio de Janeiro.

Regarding the oil and gas sector, Gomes – who strongly supports the idea of a "national project for development" – has said he intends to expropriate oil fields auctioned off by President Michel Temer but always in accordance with the law, and compensating the operators.

Gomes has been mayor of Fortaleza, in Ceará, and deputy and governor of the northeastern state. He was also economy minister during the term of president Itamar Franco in the early 1990s and national integration minister during Lula's government. Gomes has run for president twice, in 1998 and 2002.

RENEWABLES

A renowned environmentalist and former environment minister, Marina Silva of Rede Sustentabilidade has told local media she would not halt production at pre-salt oil fields. However, she said she would boost investments in renewable energy, such as wind, solar and biomass.

In a recent article published on her website, Silva criticized the approval of a special tax incentive regime for importing goods to be used in oil and gas exploration and production. In the candidate's view, the initiative is contrary to the Paris accords, to which Brazil is a signatory.

"The federal government has sponsored a provisional measure granting tax incentives for oil and gas companies that is expected to top 1tn reais by 2040. As a sign of the disaster that lies ahead, carbon dioxide emissions in Brazil neared 2.3bn tonnes in 2016, up 8.9% from 2015. It's the steepest rise since 2008," she said.

Silva ran for president during the last election in 2014, finishing third behind former Dilma Rousseff (PT) and Aécio Neves (PSDB).

ALCKMIN VS DÓRIA

Silva is technically tied in the polls with Geraldo Alckmin, of the social democratic party (PSDB). The current governor of São Paulo state has so far made no on the record comments on the energy sector.

On the other hand, his probable rival for the PSDB's candidacy, João Dória, has publicly defended the privatization of Petrobras.

"This [privatization] will be a good deal for Petrobras and will not generate unemployment or lack of opportunities. On the contrary, good management generates more employment, opportunities and benefits," Dória, the current mayor of São Paulo city, said during a presentation in June.

A successful businessman and former TV host, Dória is seen by many as an alternative to traditional politicians in Brazil amid a continuous erosion of their public image resulting from corruption scandals, especially the ones revealed by the Lava Jato operation.