Elections & Energy Policy Brief

ELECTIONS & ENERGY | La Jolla Conference 30 th Anniversary Policy Brief Independently of who is the next resident of the Alvorada Palace, the president residency, Brazil is unlikely to withdraw its commitments to Petrobras pre-salt prolific projects. Brazil pressure vis-à-vis GHG emissions is more likely to focus on the management of the Amazon rainforest rather than its oil production. CONCLUSION Having failed to transform its economic model during the short-lived commodities boom, Latin America entered the Covid-19 pandemic particularly vulnerable. Sadly, but perhaps unsurprisingly, the pandemic has had an extremely high human cost in terms of lives lost, deterioration of health care infrastructure, and surging poverty. A UN study reported in March 2021 that more than 20 million inhabitants in Latin America and the Caribbean were pushed into poverty due to the pandemic. The region’s economy collapsed, and social unrest followed. The stark reality is that political leaders have limited policy options when considering a post-pandemic recovery: faced with the pressing need to boost the economy and address massive social ills, they are required to increase spending. On the other hand, having already reached historic fiscal deficits and debt levels, pressure is mounting to instead balance their public finances by increasing taxes and reducing spending. In many ways, Latin American political leaders have a binary choice. The first is to continue to rely on the extractive industries— benefitting from an expected boom in demand particularly from China—and the exploitation and rents from fossil fuels. The second would be to more fully align with the mantra of a green recovery, the circular economy, and net-zero targets, and rethink and shift the region’s economic model to reduce its dependency on fossil fuels and instead expand the role of renewable sources of energy in its energy matrix. No doubt, the latter approach would be favored by the Biden administration and the European Union, yet both policy options come with their own economic and political risks and challenges and will face resistance from certain sectors of society. The Institute of the Americas would like to recognize Roger Tissot, our Non-Resident Fellow, for his contribution to the discussion and efforts as the principal drafter of this Policy Brief and the participation of expert presenters at the Virtual Panel: Raul Gallegos , Director, Control Risks and Francisco Xavier Salazar , Non-Resident Fellow at the Institute of the Americas. We also appreciate the efforts made by Tania Miranda , our EC2 Program Policy & Stakeholder Engagement Director, the rapporteur for the session.

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ANNIVERSARY POLICY BRIEF | INSITUTE OF THE AMERICAS