GEO Brasil - UNEP

annex 2 - main economic and environmental links
annex 2
High interest rates have always been an obstacle to
investment in new technology. Even so, commercial opening
and privatisation, and the resulting structural adjustment
of the production sector, may have triggered new
investments for capital formation, and brought about new
technology with cleaner characteristics.
On the negative side, recessive periods may have acted in
the opposite direction, reducing the potential of those
triggering factors for capital formation. In addition, future
privatisation in the energy sectors, intensive in natural
resources and in pollution release, impedes the
internalisation of environmental costs in order to avoid
losses in sale prices. The growing need for foreign financing
has been contributing to a misunderstanding about
environmental control costs and the systemic cost of the
economy.
The subjects approached and the matters analysed never
exhaust the immense challenge of sustainability. The
conclusions of these studies show us that there are living
tendencies in the compatibility of consumption activities
and production for a sustainability trajectory. In cases where
this tendency is not guaranteed nor confirmed, political
suggestions are welcome.
The text structure follows a sequence of matters previously
discussed. The references of summary texts as well as
others of relevant interest are mentioned so that the reader
interested in more detailed IPEA studies can obtain more
information on the following sight www.ipea.gov.br.
1. CONSUMPTION STAND
ANDARDS ARDS AND
URBAN DEGRAD
ADATION IN BRAZIL
Therefore, it is necessary to create market mechanisms that
may facilitate the internalisation of those environmental
costs in a cost-effective manner. This includes economic
instruments for environmental taxation. Chart 1 is a
summary of these connections for each period previously
analysed.
ENVIRONMENTAL
CONSUMPTION
STAND
ANDARDS, ARDS, PRODUCTION, ENERGY
AND SOIL USE IN BRAZIL
This section concludes the analyses of sustainability
indicators of the Brazilian Economy. In this regard, several
studies on environmental economy have been considered,
mostly from IPEA, that try to analyse the environmental
standards of the Brazilian Economy in relation to:
family consumption,
industrial production,
energy consumption and
the growth of agriculture and cattle raising in forest
soils.
The pollution problems change according to consumption
standards that have occurred rapidly as far as Brazil is
concerned. This high acceleration is a result of urbanisation
and an extremely unequal income distribution. The
degradation can be highly concentrated in high-income
pattern consumption groups that present high rates of
durable goods, energy and water consumption and
production of sewage and waste.
However, income restriction, drastically reduces the
capability of the poor to generate a defensive demand
against the negative effects of deterioration. This includes
medical assistance and better housing conditions. In other
words, the poor probably are responsible for a bigger part
of environmental costs than their number within the
population. In other words, they could be consuming the
degradation of the rich population. 1
1
See Seroa da Motta and Rezende (1999) and Seroa da Motta and Mendes (1996) for estimates on health costs associated to pollution in Brazil.
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