"A national policy that is born alongside FGV Clima," characterized Thiago Barral, the Secretary of Energy Transition and Planning at the Ministry of Mines and Energy (MME), when referring to the National Energy Transition Plan (PLANTE) at the launch event for the new applied research center of the São Paulo School of Economics at Fundação Getulio Vargas (FGV EESP). The event, held on September 2nd, featured representatives from the Ministry of the Environment and Climate Change (MMA), MME, and the Climate and Society Institute (iCS), who discussed the Climate Crisis.

In one of its first projects, FGV Clima will produce technical diagnostics to consolidate scientific knowledge on five key sectors of the energy transition, with the goal of supporting the design of strategic action plans for the MME. During the event's opening, Amanda Schutze, Executive Coordinator and Co-founder of FGV Clima, explained that the new center's mission is to strengthen Brazil's climate action and drive the country's socioeconomic development in a fair and sustainable way.

"We will focus on knowledge production and dissemination, using theoretical and empirical economic tools to produce technical knowledge and disseminate it through engagement with society: policymakers, the private sector, civil society, and the media. It is crucial that we communicate information as clearly and accessibly as possible, aiming to strengthen Brazil's evidence-based climate action," introduced Schutze.

According to Clarissa Gandour, Scientific Coordinator and Co-founder of FGV Clima, to achieve the mission of strengthening climate action in the country, the Center will conduct research on Climate Economics and position economic science to serve Brazil's climate action efforts.

"In light of the challenges posed by climate change, such as shifts in productivity, regulatory flows, and food insecurity, Economics offers tools to guide and inform the decision-making process," Gandour remarked, citing William Nordhaus, the 2018 Nobel Prize winner in Economics, who described the Climate Crisis as the ultimate challenge for the economy.

Contributions to the Energy Transition Plan

The first FGV Clima projects emerged with funding from the Climate and Society Institute (iCS) and through a strategic partnership with the MME. The Center will act as a strategic partner on two fronts: providing technical support and designing a communication and engagement strategy to ensure a just and inclusive transition. Researchers will conduct studies to create an energy transition diagnosis across different sectors: electric energy, transportation, industry, oil and gas, and mining.

In this sectoral approach, the Center will consider three thematic pillars: Legal and Regulatory; Economic and Financial; and Social. During the presentation of FGV Clima, the Secretary of Energy Transition, Thiago Barral, emphasized the growing importance of climate change not only in policy formulation but also in the overall logic of social and economic development and infrastructure.

"There is no path other than reducing carbon emissions. What was once a discussion solely about international cooperation, symbolized by the Paris Agreement, is now also a competitive process concerning the positioning of countries in this new economy and in new value chains, taking into account shifts in the international market dynamics and the acceleration of technological innovation," said Barral.

As the Secretary pointed out, it is essential to understand how these processes can translate into returns for the country, with positive climate outcomes:

"The restructuring of the Government, in which various plans and policies involve the energy transition, already indicates that the perspective of energy policy must be prepared to align with the country's social and economic development policies. Climate Economics is a fundamental tool to bring coherence to the integration of different sectoral policies that need to be based on a consistent set of actions. Through FGV Clima, Fundação Getulio Vargas will support the design of the National Energy Transition Plan, with the aim of incorporating scientific concepts into the tools being developed by the Federal Government," said the Secretary during the presentation.

Strategies for the Climate Plan and Socioeconomic Development Opportunities

During the debate, Ana Toni, the National Secretary for Climate Change at the MMA, stressed that climate change is fundamentally a socioeconomic development issue. For the Secretary, it is impossible to talk about the environment without addressing the economy, and this symbolism reflects the joint action of the MMA with the MME, the Ministry of Finance, and the Ministry of Transportation.

"We are developing the Climate Plan in an inter-ministerial format with the participation of 23 ministries to discuss both climate extremes mitigation and climate adaptation," said Toni, noting that Brazil is lagging behind other countries like China, the US, and Germany, which are already positioning not only investments to tackle the climate crisis but also to generate socioeconomic development.

"How do we turn this crisis into an economic opportunity? If we had had a center like FGV Clima a few years ago, we could have developed more robust plans that took into account not only decarbonization but also economic mechanisms, carbon markets, taxonomy, sovereign funds, Climate Fund, Ecoinvest, and many other mechanisms that previously were not part of the Government’s toolbox but now can be researched and tested by the academic sector," Toni remarked.

Representing iCS, Walter de Simoni, Manager of Climate Policy, also advocated for addressing the climate crisis through a cross-cutting approach:

"We are not just talking about an environmental perspective. Climate has moved beyond a specific niche where, 10 years ago, we had to fight for people to understand that climate was an issue to be discussed, and today, the climate crisis is part of people's lives. Who hasn’t noticed the increase in climate disasters? Who hasn’t observed the increasingly frequent heat waves? We have moved from theory, and we now need to focus on implementing actions to combat the climate crisis," argued Simoni.

Scientific Research to Create Social Impact

For Lilian Furquim, Director of the São Paulo School of Economics (FGV EESP), climate change represents a complex problem without easy solutions. However, she emphasized that by positioning economic science to measure the impacts of the climate crisis, FGV Clima can contribute to the public debate on climate action.

"A lot of academic production on this topic already exists, but it was necessary to highlight and organize an initiative that would bring evidence-based economic science answers with its own tools. Measuring impacts, analyzing magnitudes, and going beyond correlations to seek an understanding of causality—this is FGV Clima’s primary role," declared the Director of FGV EESP.

In light of Fundação Getulio Vargas's mission to contribute to Brazil's socioeconomic development, Goret Paulo, Director of Research and Innovation at FGV, believes it is impossible to discuss this development without addressing the environment and sustainability.

During the event's opening, Goret introduced the concept of Integrated Sustainable Development, which incorporates not only socioeconomic but also socio-environmental development:

"The simplest concept in Economics, productivity, needs to be discussed in the context of sustainability. Therefore, we aim to generate more and more research with a positive impact on society, especially on topics that are urgent for the population, such as climate change, health and well-being, quality education, gender inequality, decent work and economic growth, reducing inequalities, sustainable cities and communities, as well as peace, justice, and effective institutions," pointed out Goret while presenting FGV's contribution to implementing the United Nations Sustainable Development Goals (SDGs).

To watch the full FGV Clima presentation event, click here.