Chapter 12 Fostering Sustainable Economic Growth, Transformation and Promotion of Responsible Consumption and Production: The Subnational Government’s Role in Contributions to Multilateralism

In: Does the UN Model Still Work? Challenges and Prospects for the Future of Multilateralism
Author:
Patrícia Iglecias
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Abstract

Brazil is facing a very difficult moment due to the chaotic institutional relationships in many sectors of politics and the economy. When we focus on the environmental sector, the situation is the same: a severe crisis, specifically regarding climate change policies. In the recent past, during the Conference of Parties (COP 21) in Paris (2015), when the Paris Agreement was adopted, Brazil set an important target to reduce national greenhouse gas (GHG) emissions by 36–38 percent GHG reduction below the national baseline in 2005. Today, reaching these targets is under serious threat.

Naturally, a large part of these targets refer to GHG reduction associated with land use, land use change and forestry. These are the biggest challenges in this country. However, the challenge to reduce industrial and fleet GHG emissions has become increasingly important to Brazil. São Paulo has been preparing policies to deal with these challenges and applying them. In 2012, the government introduced a subnational policy for 29 activities of the industrial sector demanding the realization of such GHG inventory and reporting them to the Environmental Agency (CETESB). This was a pioneering action in a country where carbon dioxide is not a regulated pollutant. The main objective was to reinforce the monitoring of GHG inventory in industrial plants in the state.

Thus, São Paulo has implemented a new innovative policy, the São Paulo Environment Agreement. This Agreement is entirely voluntary, without any legal liability. The initiative was launched in November 2019 and was adopted by 55 subscribers, including companies in the private sector and associations. Furthermore, in 2021, the Agreement was still expanding and included 193 subscribers. Its objectives are to stimulate new areas of the private sector to adopt and increase sustainable practices; to facilitate access to markets that enforce high standards and low carbon emissions in products and services; and to contribute to the maintenance of the Nationally Determined Contribution (NDC) targets from the Paris Agreement. The adoption of this voluntary Agreement should be well researched in order to provide a better understanding of the policies and results that can be expected from it.

Introduction

Multilateralism and the constitution of international organizations are phenomena related to the construction of an international order, in which the search for the elaboration of rules of coexistence between nations is imperative. In reality, multilateralism implies an active and efficient role of member states in forums such as the United Nations. Nevertheless, regarding environmental governance challenges, it is possible to note that local governments have a prominent role in meeting UN Sustainable Development Goals (SDGs). CETESB, the Environmental Company of São Paulo State, is a very good example of how local governments meet SDGs.

In this sense, decentralized international cooperation is recognized as a set of actions conducted by subnational governments in order to step up their scale of participation, in this case in the regional role of Brazil, and promote the sustainable development of the country for present and future generations. The Brazilian Constitution of 1988 was one of the first in the world to recognize the individual right to a healthy and stable environment, establishing that local governments are also responsible for its protection. The constitution also associates the preservation of the environment with the maintenance of quality of life. To ensure such rights, various legal instruments, such as the monitoring of environmental quality and environmental licensing, have been carried out by subnational environmental entities in Brazil.

Brazil is a federation comprising 26 states and the Federal District. CETESB, the environmental agency in São Paulo State, is one of the oldest and most prestigious agencies in Latin America, and it is constantly seeking to improve its work by strictly overseeing activities subject to environmental licensing. The idea is to ensure the continuous improvement of the quality of the environment in order to meet the expectations of society in the state of São Paulo and also to improve the standards of excellence in environmental management and services provided to users, ensuring that CETESB serves as a national and international reference center in the environmental field. The reduction of the amount of inadequate solid waste disposal in São Paulo is an example of its effectiveness: in 1997, 77.8 percent of municipalities in the state sent their urban solid waste to inadequate waste disposal sites. In 2020, this number was reduced to less than 4 percent.1

The State of São Paulo currently occupies the 21st position in the ranking of the largest economies in the world , besides being the most industrialized state in Brazil with the highest concentration of multinational companies in the Southern hemisphere. These characteristics present both challenges and opportunities, and the environmental agency must therefore be very attentive to the respect of normative emission limits in order to avoid environmental harm. For this reason, the environmental legislation in São Paulo is generally more restrictive than the national environmental legislation, especially with regard to pollution prevention. For instance, São Paulo enacted a law for contaminated land and brownfield management several years ago, which still does not have an equivalent at the federal level. Environmental oversight in São Paulo is a reference not only for other Brazilian states but also for other Latin American countries. The CETESB, as the regional center for the Stockholm Convention, provides education and guidance to other Latin American countries, for example regarding Attendance to Chemical Emergencies training. The aim is also to promote commercial missions, in order to cooperate in trade relations.

São Paulo State has opened international offices in Shanghai, Dubai and Munich, financed by the private sector, with the objective of supporting companies to export products and services, to identify new businesses and to establish partnerships with foreign institutions and companies. The State is an attractive destination for investments because of its green economy area and the promotion of responsible production and consumption.

Subnational Government Initiatives

In 2019, the state government launched the São Paulo Environmental Agreement with 55 signatories, which includes municipalities, business associations, companies, industries and international observers, among other organizations. The Environmental Agreement is administered by the CETESB, the State Secretariat for International Relations and the State Secretariat for Infrastructure and Environment. As of 2021, the São Paulo Environmental Agreement included more than 670 participants (CETESB, 2021a).2 The main objective of the agreement is to encourage voluntary reduction of greenhouse gas (GHG) emissions in São Paulo. Recently, a technical document was published as a reference for members to monitor and report their GHG emissions (CETESB, 2021b). Adherence to the Environmental Agreement allows member states to identify the leading entities and strategies in order to face the challenges brought about by climate change and to assist the government of São Paulo in improving the competitiveness of companies and municipalities located in the territory.

Taking into account that the agreement is relatively recent, having been open for signature only since November 2019, the government of São Paulo is proud of the success of its initiative. However, several challenges for the implementation of this agreement remain, such as the necessity to involve other areas of the government and more cities, and the need to increase the government’s technical base. Currently, the members of the São Paulo Environmental Agreement are significantly concentrated in the metropolitan region; the participation of cities in the agreement will thus be necessary to increase the internalization of voluntary actions to reduce GHG emissions in the state.

The development of the Environmental Agreement encourages the green economy by strengthening the actions of enterprises that wish to align their actions and policies with ESG (environmental, social and governance) indicators (CETESB, 2021c). Additionally, CETESB created an Environmental Chamber of Climate Change to provide technical support to the Environmental Agreement, to map the GHG emissions and to elaborate technical guidelines.

The São Paulo Environmental Agreement and Its Relation to the Paris Agreement

Putting the São Paulo Environmental Agreement in relation to the Paris Agreement aims to align São Paulo’s subnational initiative with the net zero principles recently launched by the United Nations, considering the idea of zero carbon emissions by 2050.3 The idea is to set the objectives of the São Paulo initiative together with other Paris Agreement members with regard to capacitating firms, stimulating new actions and creating innovative projects. This is a huge challenge for São Paulo in the sense that the state has committed, as a subnational government, to contribute to achieving the national goals underlined in the Paris Agreement.

The São Paulo Environmental Agreement is demonstrating that a subnational government can contribute with local agreements aiming to reduce GHG emissions, maintaining relationships with large, medium and small enterprises. Currently there is a link between economies and countries that encourages the erosion of geographical barriers to socio-economic development of activities. Several sectors are represented such as renewable energy companies and associations; chemical industries; agribusiness; sugar and alcohol plants; retail companies; public health institutions; refrigeration, heating and air treatment industries; steel industries; logistics and railroad management companies; electric vehicles firms; and other sectors of the economy of São Paulo.

The first technical guideline is composed of four sections. The first one is about legislation and international agreements, with regulatory references. The second concentrates on climate change and market references, such as green bonds, ESG, the Entrepreneurial Sustainability Index (ISE B3) from the São Paulo Stock Market and sectoral accreditation. The third section includes calculating GHG emissions, inventory publication, methodologies with directives from the Intergovernmental Panel on Climate Change (IPCC), Norma ISO 14064–1, the GHG Protocol and the Global Protocol for Community-Scale GHG Emissions.

Members are required to send information about emissions and goals to CETESB on an annual basis from 2021 to 2030. The setting of targets will take into consideration the emissions level in 2020.

Responsible Production and Consumption

The Brazilian context requires integration of public policies aimed at protecting an ecologically balanced environment and at boosting economic development in order to achieve the desired level of sustainability. The contemporary analysis of public policies should take into account not only rational and procedural aspects, but also the confrontation with ideas and interests.

São Paulo has been working in this direction. By fulfilling its aim to induce economic growth not only in the southeast but in the whole country, São Paulo has been advancing the implementation of public policies that can achieve sustainability in an amplified sense – not only with the São Paulo Environmental Agreement, but also with responsible production and consumption policies.

In 2015, based on the National Policy on Solid Waste (2010), which comprises principles, objectives, instruments and directives related to the integrated management of solid waste and its consequent responsibilities, São Paulo published Resolution 45 (Infraestrutura e Meio Ambiente 2015), which stipulates that in order to grant operational environmental licenses, proof of existence of a system of reverse logistics for certain products and packages is required as a prerequisite.

The CETESB Directory Decision n. 76/2018/C took another step in the same direction, by defining quantitative and geographic goals for each sector and establishing a procedure for proving compliance with the duty to promote reverse logistics of listed products and packages in ordinary environmental licensing. By this means, the CETESB Directory Decision n. 76 strengthens the concretization of sustainable development as a premise of environmental licensing.4

Environmental licensing is the administrative procedure whereby the competent environmental agency licenses the location, installation, expansion and operation of an enterprise or activity that uses environmental resources that are considered to be effectively or potentially polluting, or those that, in any way, may cause environmental degradation, considering legal and regulatory provisions besides technical standards applicable to the case. All activities, constructions or enterprises that use environmental resources that are considered effectively or potentially polluting, as well as those capable in any way of causing environmental degradation, are subjected to environmental licensing.

Moreover, the decision clarifies the civic responsibility established in the National Policy on Solid Waste by defining the roles of each actor involved in the production chain. The responsible production and consumption patterns proposed by the National Policy on Solid Waste cover the whole product life cycle:5 development, raw material extraction, productive process, consumption and adequate final destination and disposal.

These patterns are established to secure the needs of current generations and to enable better life conditions, without compromising environmental quality and the fulfillment of future generations’ needs. They have a close relationship with the content of article 225 of the Constitution of the Federative Republic of Brazil (1988), which confirms the right to an ecologically balanced environment for current and future generations and considers the notion of intergenerational equity. At the state level, the implementation of reverse logistics plans depends on the analysis of technical and economic viability by the CETESB. And the company’s success is the result of its nuanced approach, which is not just about enforcing the law.

Through the program “CETESB with Open Doors” the company, as the executor of the reverse logistics program, receives, through the Solid Waste Department, inputs from municipalities, civil society and productive sectors to improve reverse logistics systems and mechanisms for requiring their implementation in permit-granting procedures. The CETESB thus seeks to build the constitutional notion of equity from the perspective of duty, that is, the recognition by those who directly or indirectly generate solid waste of their own responsibility for reverse logistics. The participative construction of a cradle-to-grave system allows for environmental protection without abdicating economic development, thus demonstrating a reliable way to truly implement sustainable development in solid waste management while fostering sustainable economic growth.

Conclusion

Subnational and local governments are usually the ones closest to the inhabitants of cities and those with better conditions to protect the environment through the local environmental agencies that are responsible for the fiscalization. Full integration of actions on different levels is essential for better results.

Local authorities have been engaging for a long time in international discussions on sustainable development. Environmental protection involves the recognition of human dignity, which means equality, responsible production and consumption and access to quality education, which is linked with access to information. Regarding sustainable production and consumption, the informed consumer can make better choices. This is the key to achieving the environmental and economic goals that are important for the future of sustainable development.

As a huge economic and industrial hub and the largest consumer market in Brazil, the state of São Paulo has been working on several related initiatives and projects, such as introducing the São Paulo Environmental Agreement and the process of reverse logistics.

These are just a few examples of how subnational and local authorities are, in many cases, already leading on innovation. Finally, the idea is to highlight the importance of local authorities’ engagement to support the implementation phase of the SDGs and others global challenges.

Bibliography

2

As of September 2022, the São Paulo Environmental Agreement included more than 1600 participants.

3

The Paris Agreement is a legally binding international treaty and includes commitments from all countries to reduce their emissions and work together to adapt to the impacts of climate change. Its central aim is to strengthen the global response to the threat of climate change by keeping a global temperature rise this century well below 2 degrees Celsius above pre-industrial levels and to pursue efforts to limit the temperature increase even further to 1.5 degrees Celsius.

4

According to National Environmental Policy (Law 6938/81), the construction, installation, expansion and operation of establishments and activities that use environmental resources, whether actually or potentially polluting or capable of causing environmental degradation, will depend on prior environmental licensing.

5

The product life cycle in our context has to take into consideration the circular economy. The idea is that the waste of one system can become the input of another, thereby increasing resource efficiency and decreasing environmental load.

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