A recent McKinsey study reveals that Brazil, the sixth-largest emitter of greenhouse gases (GHGs), has a unique emission profile, majorly influenced by illegal deforestation.
João Guillaumon, a McKinsey partner, notes that 95% of emission reductions in Brazil can be achieved at a cost below US$20 per ton of carbon.
Key sectors for decarbonization include land use, agriculture, transport, energy, and industry.
Reducing illegal deforestation is crucial. Implementing sustainable animal management techniques is necessary.
Electrifying transport is important. Increasing renewable energy sources is vital. Adopting green hydrogen and CCUS technologies is essential.
In a ‘Net Zero 2050’ scenario, ambitious actions across all sectors are required, including a significant reduction in illegal deforestation and sustainable livestock management, which account for 80% of reductions.
This transition would necessitate an average annual investment of US$80 billion, contributing up to US$15 billion to the GDP and creating up to 1.1 million jobs.
Henrique Ceotto, another McKinsey partner, emphasizes the need to address land-use issues and control deforestation to achieve carbon neutrality.
He highlights that reducing deforestation can offer economic opportunities and co-benefits for society and the environment.
Promoting low-carbon agriculture and regenerative practices is also crucial, requiring substantial investment and market support for lower-carbon intensity agricultural products.
The study also contrasts Brazil’s emission profile with other top emitters primarily from coal and fossil fuels.
As the COP28 approaches, coordinated global efforts, implementing the Paris Agreement, and establishing regulated carbon markets are vital for planetary sustainability.
Tomas Nauclér, McKinsey’s global sustainability practice leader, stresses the need for clearer rules, incentives, and financial instruments to attract investments in Natural Solutions and reward companies supporting conservation and restoration projects.
Creating large-scale sustainable businesses is key to achieving significant local and global decarbonization impact.