The recent visit of China’s leader Xi Jinping to Brazil for the G20 summit saw the reinforcement of the close ties between the two countries, with 37 new agreements signed and promises of even stronger collaboration.
China has been Brazil’s largest trading partner since 2009, with two-way commerce reaching USD 157.5 billion in 2023, and has emerged as a key investor and supplier in the South American country’s renewable energy expansion, infrastructure and electric vehicle manufacturing, among other sectors.
Despite growing speculation ahead of the bilateral meeting, Brazilian president Lula da Silva ultimately did not sign up for the Belt and Road Initiative (BRI), China’s flagship global infrastructure initiative. However, the two countries did agree to “find synergies” between BRI and Brazil’s own development strategies. They also promised to increase the dialogue between China and the Mercosur trade bloc.
In an interview with Dialogue Earth at the COP29 climate summit in Azerbaijan, Maiara Folly, the co-founder and executive director of Brazilian foreign affairs think-tank Plataforma CIPÓ, argued that both countries can work together to enhance sustainability. Folly also reflected on Brazil’s role in global diplomacy on climate and energy, via blocs such as the G20 and BRICS, as well as the positions of partners such as the United States and the European Union in green transitions.
Dialogue Earth: Brazil has long made clear its commitment to autonomy and non-alignment in its foreign policy. Given ongoing political changes, notably the recent US elections, do you see any challenges around this, or shifting alignments, particularly in respect to climate and the environment?
Maiara Folly: Brazil tries to take a pragmatic approach with good relationships with China and the US. To an extent – with some exceptions in the period of previous president Jair Bolsonaro – it has been successful in reaching that balance. Brazil has a good relationship with both sides, but the election of Donald Trump will make Brazilian foreign policy work a bit harder. It’s no secret that Lula and Trump have a very different vision of geopolitics in specific issues such as the climate and human rights agendas, which have gained prominence in Brazilian foreign policy.
Lula is very experienced and involved in foreign policy, and he will try to maintain a good pragmatic relationship with the US. We’ll see a greater role for subnational actors in the bilateral relationship, such as parliamentarians and state governors. However, it could create a problem in terms of multilateral spaces. We could see a departure of the US administration from the Paris Agreement, and Brazil is hosting COP30. [Maintaining] US engagement in the climate space will be important for Brazil.
There appears to be increasing alignment between China and Brazil’s visions of development, environment and South-South solidarity
. How would you describe the partnership between the two countries and its future?
The bilateral relationship has gained more prominence, and China is Brazil’s largest trading partner. There’s a lot of concern among environmental groups of the impacts of the trade relationship with China, who ask that sustainability be part of the bilateral relationship. But we have seen strong interest on both sides to ensure this happens. China is the main importer of products that put pressure on the Amazon, and its position is not to interfere in other countries’ legislation and policy. This creates trust in Brazil, considering the EU’s trade measures [such as its regulation targeting deforestation, strongly criticised in Brazil]. The fact that China has a different approach creates an opportunity for a positive relationship.
There’s [enough] trust on both sides to be thinking about a positive relationship, in terms of rewarding those [companies and producers] who adopt sustainable practices. Brazil has strong environmental legislations with a concrete plan to cut down on deforestation. It’s not an easy task; it requires money and technology. And as China has a strong interest in buying products from Brazil, including for its own food security, it’s in the interest of China to support Brazil in those commitments and plans that already exist.
As for the EU, some of its environmental policies, such as the carbon border adjustment mechanism – its “carbon tax” on imports – have faced strong criticisms
from Brazil, directly and in forums such as the COP climate talks. With the political landscape in Europe changing, how do you foresee cooperation with Brazil evolving?
Brazil has a strong and solid relationship with the EU, but it’s true that since the EU approved the CBAM and its deforestation regulation, an element of tension has been added to the relationship. Brazil and developing countries have been very vocal in condemning these regulations, claiming that while they are packaged as climate measures, they are in reality set up for protectionist purposes. This has had an impact on the bilateral relationship between Brazil and the EU, and also on multilateral spaces. The [leaders’] declaration made at the G20 mentions the concerns around unilateral trade measures, and Brazil and the G77 plus China have been trying to discuss this issue under the United Nations’ climate convention, but as this operates by consensus, it will be very hard to achieve.
If other aspects of climate policy such as finance were working, and if there would be technology transfer from developed to developing countries, then the trade agenda wouldn’t be so polemical. But developed countries aren’t doing their part, and their measures have a disproportionate effect in developing countries. For Brazil, it could have an impact on its economy and in specific sectors that may not be able to comply with the legislation. But it’s also a matter of fairness of the multilateral system.
On such technology transfer and in other areas, you have written
previously of a need for Brazil’s international partnerships to be mutually beneficial “equal partnerships”. How can this be encouraged?
We need to achieve win-win relationships. It’s not easy as there’s a lot of distrust between developed and developing countries, especially on finance, but also more broadly. Brazil and developing nations have called for the reform of the international financial architecture, [but] very little has been achieved over the past decades. In a structural sense, there has been some progress, but nothing major at the speed needed.
In terms of specific initiatives, there have been a few in Brazil. One example is the “Tropical Forest Forever” fund to reward countries that keep forests standing. Current mechanisms compensate countries to reduce deforestation, but even if you reach zero deforestation, you still need investments to ensure forests are standing. Brazil is engaging with partners in Europe and the US to get financial support for this facility and make it operational by COP30 [in late 2025]. It could elevate trust between the developed and developing. Brazil has also released an investment platform for its ecological transformation plan, and the idea is to have a series of projects across sectors of the economy to promote ecological transformation.
At the macro level, the elections in the US and shifts in certain political dynamics in Europe could make it harder to advance the structural reforms you need in terms of governance, financial architecture and climate action. But in terms of specific projects there are opportunities there, and Brazil is working hard to regain trust. This could benefit its economy and ensure there is more of a positive environment in multilateral spaces ahead of COP30.
The G20 leaders’ declaration
called for “just and inclusive energy transitions”. How is Brazil taking on this concept and implementing it at home, particularly in regard to industries that will face challenges amid the transitions?
Just transition is an area in which there are divergences in visions between developed and developing countries, and even inside those groups. Developed nations tend to have a narrow vision of just transition that focuses more on labour force rights and how to retrain workers from polluting to greener sectors, especially looking at the energy sector. For developing nations, just transition is broader than that – it’s also about adaptation, other sectors, broader aspects such as reduction of inequality, combating poverty and hunger and ensuring that this is incorporated in climate plans.
For COP30, the issue of incorporating fairness, equity and justice in climate policy will be a major part of Brazil’s agenda. Internally, it’s already taking steps through its ecological transformation plan, and in the G20 it has encouraged other countries to take similar approaches. This year the G20 approved principles for just and inclusive energy transitions: it talks about social protection mechanisms to incorporate into climate policy, human rights concerns, and how to mitigate environmental impacts of the just transition. These are broad principles that now have to be operationalised in different contexts.
Elsewhere, Colombia proposed
an initiative last month targeting responsibility and supply chain traceability for critical minerals, and called for countries to adopt an agreement on this at COP30. Meanwhile, the UN presented a report
this year with a set of principles to follow in critical minerals extraction. As an important mineral producer, including increasing outputs of lithium
, can Brazil take a lead in these discussions?
Global South countries no longer find it acceptable to export raw materials and import green technologies. For Brazil it is the same, but it has some advantage as it has a higher level of industrialisation than many countries. It could advance in bringing more added value to its supply chain to ensure that this unequal pattern doesn’t continue. But it’s very difficult to have leverage when you have a concentration of technology in just a handful of states. That’s where there is potential for South-South cooperation. Countries that have critical minerals can come together and create some sort of collective bargaining power to try to make advancements, in terms of technology transfer or technology co-development.
Brazil is playing a key role in global diplomacy as the current president of the G20, the host of next year’s COP30, and the 2025 president of the BRICS bloc in which it convenes with China. How can it use this position to promote positive action on green transitions?
The main vision for Brazil is to try to create synergies between those three processes. In the G20 presidency, it had three priorities: global governance reform; poverty reduction and the hunger agenda, and sustainable development and just transitions. There will be a similar emphasis in the BRICS presidency. The core of BRICS has been to advocate for fair and more inclusive multilateralism and reform of global governance. Sustainability can be a topic that links the three processes, but it’s been very hard to achieve consensus, as we have just seen with the G20. The leader’s declaration in relation to climate is below what we expected. The language was weakened compared to previous G20 ministerial declarations.
Brazil is the G20 country with the largest share of renewables
in its electricity mix, but it still relies on fossil fuels for exports and is pushing to expand extraction. How can the country plan a just transition amid this reality?
We need to transition away from fossil fuels, and we need to do it quickly. Most countries are not on track, including Brazil. We are in a privileged position as most of the electricity in the country comes from renewable sources and we have the potential to expand, being wary of how it happens amid environmental and social impacts. Brazil will have to address the issue of fossil fuels. We have a government that is taking the climate agenda as one of its priorities. Fossil fuels is a politically sensitive topic, and the industry is very strong. We have one of the largest oil companies in the world. It’s a topic that causes tensions inside the government between ministries, so it will depend on who wins the fight.
It’s also important to advance at an international level. The sector creates jobs and income for many countries, even though it is not equally distributed. You could only expect for Brazil to transition from fossil fuel if its financial constraints are softened. We need climate funding and deep changes in financial architecture so countries in the Global South can borrow more sustainably without creating high levels of debt. Many countries have to decide now if they invest in climate or pay their debts. The bill doesn’t add up. The only way forward is to advance in the finance aspect and much faster.
