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School of Environment, Enterprise and Development » Graduate » Master of Environmental Studies (MES) in Sustainability Management » Degree details and courses »

Research thesis

Rese​arch thesis

A research thesis demonstrates your ability to conduct original research. This is done under the supervision of a faculty member who guides the student, helps develop a sound research question, and assists in finding an appropriate method.

Your masters research should be original and contribute to the existing body of knowledge. The Sustainability Management masters thesis will be about 100 pages and  completed theses are published on UW Space .


Refer to our guide for graduate research and supervision  for more detailed information.


Finding a supervisor

When considering your ideas for a research topic begin by looking for a professor who might able to supervise you:

  1. Look through the SEED  professor profiles and check out what research topics they are interested in.
  2. Investigate more into those professors who interest you, beginning with their Waterloo webpage. Look for what “current projects” they are doing, browse  SEED’s research pages  and note the names of graduate students they have supervised.
  3. Dig deeper into the research done by professors, look through their projects or read their recent publications, for example by using Google Scholar or ResearchGate .
  4. See what previous graduate students have done for their research and see which professor has supervised which students. You can access our community list of student theses for SUSM on UWSpace , and search UWSpace by student, supervisor or subject.
  5. Contact a professor directly if you might be interested in working with them. Each supervisor will have their own requirements and opportunities. Sometimes professors are seeking students to work on specific research projects; other times they may be more or less open to interested applicants.

Below is a list of SEED’s faculty members.  More information on each is available by clicking their name or going to the SEED  people profiles . You can also consider  supervisors from elsewhere in the Faculty of Environment .

Amelia Clarke

  • Sustainable Communities: Implementation of collaborative regional (or community) sustainability plans and local sustainable development and the engagement of stakeholders / partners
  • Sustainable Campuses: Institutionalizing campus environmental management in Canada
  • Social Entrepreneurship / Green Jobs: Enabling environmental change through youth-led social ventures (or initiatives) and defining the local green economy

Neil Craik

  • International environmental law, global environmental politics or related disciplines with interests in research on the law and governance of areas beyond national jurisdiction

  • Particular interest in comparative analysis of the structure of global commons legal regimes, such as the deep sea bed, the high seas, outer space or Antarctica is preferred

Goretty Dias

  • Life cycle sustainability assessment of food and agricultural systems; health and environmental implications of dietary patterns; eco-labeling and certification of food systems

Bruce Frayne

  • Planning for food secure cities in the Global South with a focus on Africa

  • The Hungry Cities Project operates in China, India, Jamaica, Kenya, Mexico, Mozambique and South Africa

Sean Geobey

  • Social innovation; social entrepreneurship; social finance; social innovation labs; youth employment; peer-based pedagogy; non-profit and co-operative governance; voting systems in decision-making; and participatory governance

Heather M. Hall

  • Innovation and entrepreneurship in rural and northern regions
  • Regional economic development planning, policy and practice
  • Community readiness and community impacts related to natural resource development

Komal Habib

  • Exploring resource dependency of future clean energy systems with a focus on metals, material and energy flow analysis, resource criticality assessment, waste management, and life cycle assessment
  • e-Waste and circular economy

Jennifer Lynes Murray

  • Corporate greening
  • Green and social entrepreneurship
  • Energy efficiency/green buildings
  • Sustainable transportation
  • Waste minimization

Prateep Nayak

  • The understanding of complex human-environment connections (or disconnections) with particular attention to change, its drivers, their influence and possible ways to deal with them
  • Commons, environmental governance, social-ecological system resilience, environmental justice, political ecology

Paul Parker

  • Growing the green economy
  • Incubators: innovation and partnerships
  • Community energy planning and low carbon strategies
  • Sustainable energy policy, residential energy efficiency
  • Smart grid technology and household engagement
  • Renewable energy and remote First Nation communities

Simron Singh

  • Research on understanding the metabolism of local rural systems and their long-term dynamics using biophysical variables, such as material and energy flows, land use, and time-use
  • The Role of Biodiversity in Climate Change Mitigation in Latin America
  • Environmental Justice Organizations, Liabilities and Trade

Larry Swatuk

  • Africa; water management; environmental politics; the south in globalization; natural resources governance

​Jason Thistlethwaite

  • Innovative strategies designed to reduce the economic impacts of extreme weather and climate change within the financial sector

Tara Vinodrai

  • Economic geography
  • Urban and regional economic development and policy
  • Creative and cultural economy of cities
  • Labour market dynamics and workforce development
  • Design, innovation and technological change

Olaf Weber

  • Sustainable finance: The impact of social finance, microfinance and impact investment – analyses, measurement and indicators
  • Sustainability strategies for the financial sector: What is the sustainability case for banks, insurances and institutional investors?
  • Current SSHRC funded project on the impact of voluntary codes of conduct and financial sector sustainability regulations on the sustainability performance of banking, project financing, and investing. Students interested in this field are offered a graduate research scholarship for one term.

Michael Wood

  • Business sustainability
  • Resilience, scale, decision-making environmental performance

Steven B. Young

  • How can material resources be managed sustainably and responsibly? 

  • Developing Ontario’s circular economy through reuse, remanufacturing and recycling

  • Conflict minerals, responsible sourcing and metals global supply-chains

  • Management and policy use of sustainability standards, third-party auditing and certifications of companies and products

Past research theses

For a look at the theses submitted by past Sustainability Management students, see the  UWSpace page . 

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    Artículo en PDF
    How to cite
    Complete issue
    More information about this article
    Journal’s homepage in redalyc.org
    Sistema de Información Científica
    Red de Revistas Científicas de América Latina y el Caribe, España y Portugal
    Revista del
    CESLA
    ,
    No. 16, 2013, pp. 261-277
    G
    REEN
    E
    CONOMY
    P
    OLICIES IN
    B
    RAZIL
    :
    C
    HALLENGES
    AND
    O
    PPORTUNITIES
    La política de economía verde en Brasil: retos y oportunidades
    Carlos Eduardo F
    RICKMANN
    Y
    OUNG
    1
    Fecha de recepción: marzo del 2013
    Fecha de aceptación y versión final: noviembre del 2013
    R
    ESUMEN
    :
    el artículo presenta las posibilidades y dificultades vinculadas
    con la implementación de políticas de “economía verde” en Brasil. Al comienzo se
    analiza el problema de la tendencia actual en las actividades de la “economía ma-
    rrón”, para demostrar que la transición hacia el desarrollo más sostenible exige un
    nuevo paradigma competitivo, con el cambio de actitudes, tanto para el sector pú-
    blico como privado. Esto requiere nuevos enfoques para la formulación de políticas
    económicas en todos los niveles, incluidas las políticas macroeconómicas (moneta-
    ria y fiscal), de regulación y financiación. Es necesario también establecer nuevos
    indicadores para evaluar si de hecho la economía se ha vuelto “verde”. Esto signifi-
    ca que la transición hacia la “economía verde” no será posible sin reformas estructu-
    rales, el cambio del papel del Estado brasileño y la legislación.
    P
    ALABRAS CLAVE
    :
    “economía verde”
    , política económica, desarrollo sos-
    tenible, Brasil.
    A
    BSTRACT
    : This paper discusses the possibilities and difficulties in im-
    plementing green economy policies in Brazil. It starts with a discussion about the
    current trend of specialization in “brown” activities, and argues that a transition to-
    wards an alternative, more sustainable development pattern requires a new competi-
    tive paradigm, with changing attitudes for both the public and private sectors. This
    requires new approaches for economic policy making at all levels, including macro-
    economic (fiscal and monetary), regulatory and financing issues. New metrics are
    also necessary to evaluate how “green” the economy is. This means that the transi-
    tion towards a green economy will not take place without structural reforms, chang-
    ing the role of the Brazilian state and the regulatory framework for this to happen.
    K
    EYWORDS
    : green economy; economic policy, sustainable development,
    Brazil.
    1
    Carlos Eduardo F
    RICKMANN
    Y
    OUNG
    – Ph.D., University College London; MSc and Ba,
    UFRJ. Professor at the Institute of Economics, Federal University of Rio de Janeiro (UFRJ),
    Senior Researcher at the National Institute of Science and Technology on Public Policies,
    Strategies and Development (INCT PPED), and coordinator of the Research Group on Envi-
    ronmental Economics and Sustainable Development.
    Carlos Eduardo F
    RICKMANN
    Y
    OUNG
    
    CESLA Universidad de Varsovia
    262
    1.
    I
    NTRODUCTION
    Brazil is the fifth largest (8.5 million km
    2
    ) and arguably the most bio-
    logically diverse country in the world, even though a huge part of its biodiversi-
    ty remains unknown to scientists. Its economy is diversified, with important ag-
    ricultural, industrial and service activities. More than 84% of the population live
    in urban areas (according to the 2010 Demographic Census), but the country has
    the largest areas of tropical forests on the planet. Therefore, Brazil faces a wide
    range of environmental problems, mixing problems that are typical of developed
    countries, associated with high degree of urbanization, waste and industrial pol-
    lution, and those of developing countries, such as deforestation and poor sanita-
    tion. To solve these problems, financial and human efforts will be required at
    levels that exceed considerably the resources that are currently destined to sus-
    tainable issues in Brazil
    2
    .
    Green economy solutions – understood as those that results in “im-
    proved human well-being and social equity, while significantly reducing envi-
    ronmental risks and ecological scarcities”
    3
    – represent a great opportunity for
    the country to reconcile its development needs with sustainability concerns.
    Even though the short run results from the UN Conference on Sustainable De-
    velopment (Rio +20, held in June 2012) were very limited, they show that green
    economy policies present potential solutions towards sustainability, with more
    weight for institutions that “act locally”, including governments, companies and
    civil society organizations. The main principle is that environmental policies
    should not be seen as costly restrictions imposed by the state bureaucracy or
    pressure from radical environmentalists, but as opportunities for innovation to
    reduce production costs in the medium and long term (for example, avoiding
    waste and inefficiencies in the consumption of energy and raw materials) or
    ways to conquer new markets by improving the image of the company and its
    products to consumers. That is, costs can be reversed on benefits: what would be
    2
    Young, C. E. F.; Rocha, E. R. P.; Bakker, L.; Santoro, A. F. (2012), “How Green Is My
    Budget? Public Environmental Expenditures in Brazil (2002-2010)”, in:
    XII Biennial Confer-
    ence of the International Society for Ecological Economics
    (ISEE).
    3
    UNEP (2010),
    Towards a Green Economy: Pathways to Sustainable Development and Po-
    verty Eradication
    , UNEP, Nairobi
    , p. 631.
    G
    reen Economy Policies in Brazil: Challenges and Opportunities
    Revista del
    CESLA
    ,
    No. 16, 2013, pp. 261-277
    263
    a problem (to meet environmental standards) becomes an advantage, because of
    the potential gains in efficiency and competitiveness, simultaneously improving
    the quality of life of the population. Reversing the myth, it can be said that eco-
    nomic growth and environmental quality are complementary in a virtuous cycle
    of sustainable development.
    But this “win-win” will not materialize spontaneously, especially in the
    Brazilian case. It is necessary that the private and the public sector build up a re-
    lationship of synergy, so that the regulatory framework encourages proactive
    behavior by firms and, in turn, companies become more responsible on social
    and environmental grounds. It is also necessary to guarantee stable sources of
    financing under conditions which prevent the myopic perception that privileges
    short-term results at the expense of future problems. In other words, beyond the
    conventional environmental regulation, fiscal and financial policies are also cru-
    cial to achieve the goals of sustainability.
    Indeed, as discussed in this paper, the current development path in Bra-
    zil points out to the other direction, with growing specialization in economic ac-
    tivities that present high potential impacts for the environment. The objective of
    this paper is to discuss the possibilities for green economy policies to revert this
    trend, discussing challenges and opportunities for the public and private sectors.
    2.
    T
    HE CURRENT SITUATION
    In the last decades, the Brazilian economy has experienced a reversal
    from a condition of low rates of growth and very high inflation into a successful
    example of emerging market. Nevertheless, this boom in economic activity and
    investment has been accompanied by a structural change in its GDP and exports
    composition, with an increasing specialization in raw materials exports or prod-
    ucts that are intensive in natural resources and energy. Not surprisingly, the best
    performance activities are associated with higher pollution potential
    4
    , and there
    is an increasing share of carbon-intensive activities in the Brazilian export struc-
    ture
    5
    .
    4
    Young, C. E. F. (2011), “Growth Potential of the Green Economy in Brazil”,
    Environmental
    Policy
    , Vol. 8, pp. 88-97.
    5
    Gramkow, C. L. (2011),
    Da restrição externa às emissões de gases do efeito estufa: uma
    análise da insustentabilidade econômica e ambiental do atual modelo econômico brasileiro
    .
    Carlos Eduardo F
    RICKMANN
    Y
    OUNG
    
    CESLA Universidad de Varsovia
    264
    The problems associated with the specialization in such commodities
    are not restricted to the environmental dimension. From a social standpoint, an
    economic model based on “mining” natural resources reinforces exclusion, since
    the economic benefits tend to be concentrated within a relatively small group
    (these activities are characterized as low-intensive in labor demand), while envi-
    ronmental degradation has worse effects to the poor
    6
    . One important example is
    the expansion of the agricultural area through deforestation: benefits go to those
    located at the “top-up” of the agribusiness chain, but at the cost of serious social
    imbalances, including the displacement of indigenous and other traditional
    communities by the expansion of commercial large-scale agriculture, increasing
    violence in these areas due to land property conflicts, and health problems
    caused by infectious diseases brought by migration and air pollution caused by
    burning forests in the land clearing process. The interference on the provision of
    environmental services has more impacts on the poor, too. In the countryside,
    traditional communities have been deprived of the natural resource base which
    their livelihood depends on.
    Similar problems to the well-being of poor families are also observed in
    mining and export-oriented industrial centers. These activities expand without
    proper investment in housing infrastructure and sanitation conditions, and the
    poor tend to live in a periphery with increasing environmental degradation.
    There are also losses in the economic dimension due to the increasing
    specialization in “brown” activities. The expansive cycle of growth in commodi-
    ty prices conceals an old discussion about the long-term trends of the terms of
    trade: is that because commodities have shown an upward trend since the 1990s,
    in the long run they will always remain growing in relation to technology-
    intensive products?
    But the most evident problem is the change in consumer behavior, espe-
    cially in developed countries, where the ecological footprint of goods and ser-
    vices is considered in the purchase decision. The growing interest in environ-
    mental certification shows that this is not temporary, but a firm trend that ex-
    tends to a growing body of products and sectors, including the domestic market,
    MSc
    Thesis, Institute of Economics, Federal University of Rio de Janeiro.
    6
    Young, C. E. F.; Lustosa, M. C. J. (2001), “Meio ambiente e competitividade da indústria
    brasileira,
    Revista de Economia Contemporânea
    (printed), Vol. 5, No. especial, Rio de
    Janeiro, pp. 231-259; Young, C. E. F.; Lustosa, M. C. J. (2003), “A questão ambiental no
    esquema centro-periferia”,
    Economia
    (ANPEC Journal), Vol. 4, No. 2, pp. 201-221.
    G
    reen Economy Policies in Brazil: Challenges and Opportunities
    Revista del
    CESLA
    ,
    No. 16, 2013, pp. 261-277
    265
    and it is almost a requirement in some export destinations
    7
    . The demand for en-
    vironmental certification is no longer restricted to final consumers. Businesses
    and governments are incorporating sustainability criteria into their purchasing
    policies. Large corporations are being pressured to present their results of envi-
    ronmental responsibility not only for their own activities but also throughout
    their entire supply chain. On the other hand, public procurement policies are in-
    creasingly cited as a tool for development and dissemination of green technolo-
    gies and products, which certainly affects the dynamics of the supply chain.
    In summary, since environmental issues are increasingly examined
    along the production chain, there is a considerable risk to specialize in “brown”
    activities where competitiveness is based on an unsustainable relationship with
    the environment, even if the commitments to sustainability are still restricted to
    voluntary agreements and limited initiatives of governments, business leaders
    and civil society organizations. Hence, the Green Economy requires a new com-
    petitive paradigm, and businesses have a key role in the transition to this new
    model.
    3.
    I
    NNOVATION
    :
    THE KEY TO A GREEN ECONOMY
    The key for this transition is innovation, understood in its broadest
    sense, as argued by Schumpeter
    8
    : new products, new production methods, new
    markets, new sources of raw materials providers and other inputs, and new mar-
    ket structures. Empirical studies for the Brazilian industry
    9
    show that there is
    a statistically significant relationship between companies that present higher en-
    7
    Young, C. E. F. (2012),
    Setor financeiro: Suporte fundamental de transição para a Econo-
    mia Verde,
    FBDS, Rio de Janeiro.
    8
    Schumpeter, Joseph A. (1942/50),
    Capitalism, Socialism, and Democracy
    , 3d ed., Harper
    and Brothers, New York.
    9
    Lustosa, M. C. J. (2002),
    Meio ambiente, inovação e competitividade na indústria brasilei-
    ra: a cadeia produtiva do petróleo
    , Ph.D. Thesis, Institute of Economics, Federal University
    of Rio de Janeiro; Young, C. E. F. (2011), “Growth Potential of the Green Economy in
    Brazil”, op. cit.; Podcameni, M. G. V. B. (2007),
    Meio ambiente, inovação e competitividade:
    uma análise da indústria de transformação brasileira com ênfase no setor de combustível
    ,
    MSc Thesis, Institute of Economics, Federal University of Rio de Janeiro; Queiroz, J. M.
    (2011),
    Determinantes da inovação ambiental: uma análise das estratégias das firmas da
    indústria de transformação brasileira
    , MSc Thesis, Institute of Economics, Federal
    University of Rio de Janeiro.
    Carlos Eduardo F
    RICKMANN
    Y
    OUNG
    
    CESLA Universidad de Varsovia
    266
    vironmental concerns and those that are most likely to adopt or generate innova-
    tions. That is, the innovator is also more likely to become “green”, creating an
    important synergy between innovation and environmental policies.
    The reciprocal by the market is perceived in the financial evaluation of
    companies which have outstanding behavior in the areas of social and environ-
    mental responsibility. Companies with greater social concern perform better,
    with higher growth in their stock prices and ensuring higher returns to their
    shareholders
    10
    . Thus, the attraction of new investments is facilitated, and the
    company ends up getting financial benefits and longer-term growth. The envi-
    ronmental performance of the company also ensures the public recognition of
    corporate leadership, facilitating their work with various interest groups, such as
    legislators, public administrators, NGOs (especially in the environmental area)
    and financial agents, in addition to the positive impact on consumers. There are
    also benefits in productivity because employees themselves come to identify
    more with the company when the firm’s objective is no longer exclusively profit,
    incorporating social issues into their agendas.
    The funding of “sustainable enterprises” should also be facilitated.
    Companies that care about the future tend to be more responsible and therefore
    present less risk. Best corporate governance practices reduce the risk potential
    for investors and facilitate access to new sources of funding. The diffusion of
    best corporate governance practices anticipates future changes in legislation –
    therefore, the cost of borrowing and credit insurance premiums should be lower
    than for the competitors that do not assimilate these new practices.
    Another important feature is that the “sustainable competitiveness” does
    not depend on the nature of the industry, but on its capacity to generate and ab-
    sorb new technologies. Until the 1980s, it was believed that the manufacturing
    industry was naturally “more advanced” than the primary sector. However, what
    we can see today is that the competitiveness opportunity occurs due to the inno-
    vative capacity of the company, regardless of the area they serve. The develop-
    ment of organic products, for example, can be highly complex, and product dif-
    ferentiation can be a valuable asset. The requirement of environmental certifica-
    tion commodity markets will occur regardless of what is decided in the rounds
    10
    Eccles, R. G.; Ioannis, I.; Serafeim, G. (2012), “The Impact of a Corporate Culture of Sus-
    tainability on Corporate Behavior and Performance”,
    Harvard Business School Working Pa-
    per
    12-035, available at http://www.hbs.edu/research/pdf/12-035.pdf.
    G
    reen Economy Policies in Brazil: Challenges and Opportunities
    Revista del
    CESLA
    ,
    No. 16, 2013, pp. 261-277
    267
    of international trade regulation, because this movement is not led by govern-
    ments but by consumers themselves.
    This transition to a Green Economy requires an active participation of
    the public sector on different levels of regulation: 1. macroeconomic (fiscal and
    monetary), 2. regulatory / industry, 3. financing. In the Brazilian case, changes
    on all of these levels are necessary in order to promote green economy policies
    in a sustainable way, as discussed below.
    4.
    M
    ACROECONOMIC POLICIES
    Macroeconomic policies have effects that may contribute or harm an ef-
    fective environmental management. Firstly, one should remember that invest-
    ment decisions are extremely sensitive to monetary policy. Rising interest rates
    shorten the time horizon of decisions, favoring quick return investments to the
    detriment of those whose return is give in the long run. That is, as the opportuni-
    ty cost of capital is higher in countries with financial difficulties, it creates a bias
    in favor of decisions that result in gains in the shortest time possible, because the
    costs and benefits of long-term loose importance in spreadsheets projects with
    very high discount rates. It is the antithesis of sustainable development, which
    requires that actions in the short term create liabilities to be settled only by fu-
    ture generations.
    Therefore, the recent reduction in interest rates in Brazil creates a uni-
    que opportunity to lengthen the time relevant to the analysis of investments as
    a result of lower interest rates. For example, sustainable forestry practices have
    always suffered with the problem of the long period required for the extraction
    cycle in order to allow natural forest recovery. This “immediacy” for quick prof-
    its explains in large part why certain business options with solid, but slow, earn-
    ings potential over time, such as sustainable logging in native forests, are not at-
    tractive to investors. Thus, between the long-term yield that a forest can provide,
    and immediate feedback generated by grazing or cultivation, the land use deci-
    sion is biased towards the option to “clear the land” (i.e., to remove the forest)
    and convert it in more agricultural space. As a result, the deforestation process
    continues, wasting the opportunity to sustainably produce timber and other for-
    est products, and eliminating vital environmental services.
    Carlos Eduardo F
    RICKMANN
    Y
    OUNG
    
    CESLA Universidad de Varsovia
    268
    Therefore, emissions of carbon dioxide (CO
    2
    ) generated by fires during
    the “cleaning” of the forest land were, in 2005, more than three times the sum of
    all emissions from energy, transport and industry. To illustrate this point, given
    the extremely low productivity of Brazilian livestock, the emissions caused by
    the conversion of 1.5 hectare of forest into pasture land (the average area of pas-
    ture required for one cow in the Amazon) are higher than the annual emissions
    generated by more than 150 cars, an incredible amount of pollution to generate
    very little added value.
    The recent reduction in Brazilian interest rates provides a positive back-
    ground for a change in this predatory pattern of using natural resources since it
    reduces the bias against activities characterized by long term economic returns,
    such as sustainable forestry and fisheries management, and non-conventional
    sources of power (wind, photovoltaic, etc.). It also supports investment in inno-
    vation – the ability to generate and absorb new technologies is fundamental to
    achieve “sustainable competitiveness”. Policies that foster innovation are also
    environmental policies, and those who achieve the best solutions for dealing
    with environmental demands imposed by regulation or voluntarily by the buyers
    will have new opportunities to gain competitiveness.
    Fiscal issues are also relevant. In this sense, the “Green Economy”
    should guide the efforts of public spending to revive the economy with sustaina-
    bility conditions.
    Unfortunately, in the Brazilian case, there is a clear disproportion be-
    tween the ever expanding budget for the infrastructure sector and the relative
    stagnation of spending on environmental control and preservation. As a conse-
    quence, the environmental pressure caused by the expansion of large infrastruc-
    ture projects is not followed by the required investment in the control of these
    impacts. It is particularly worrying that spending on infrastructure expansion in
    transport has increased four times (road building is the crucial impulse to defor-
    estation), without significant changes in spending on environmental control
    11
    .
    The implementation of economic instruments for environmental man-
    agement (taxation, tradable certificates), discussed below, can help to minimize
    the problem. But the use of economic instruments in Brazil is very poor on the
    restraining damaging activities, with much more emphasis on positive incentives
    11
    Young, C. E. F. (2012),
    Setor financeiro.
    ..
    , op. cit.
    G
    reen Economy Policies in Brazil: Challenges and Opportunities
    Revista del
    CESLA
    ,
    No. 16, 2013, pp. 261-277
    269
    that are limited to specific sectors or circumstances
    12
    . It is necessary to establish
    more effective “polluter-pays” mechanisms to penalize externalities, in spite of
    the unpopularity of these measures. The best solution is to replace conventional
    taxes by new schemes that consider the ecological footprint of the activity in
    their calculation, synchronizing fiscal policy and environmental regulation that
    lead to the Green Economy.
    5.
    E
    NVIRONMENTAL REGULATION
    The fundamental principle of environmental regulation in a green econ-
    omy is the “internalization of externalities” through the adoption of economic
    instruments for environmental management. Popularly known by the polluter
    (user) pays in producing sustainable products based on natural resources must
    incorporate environmental externalities, negative and positive, in product pric-
    ing. This requires the calculation of economic externalities, making these varia-
    bles relevant to decision making and resource allocation.
    The resistance, however, is still very large and, in times of economic
    crisis, it is often argued that pricing the externalities reduces the competitiveness
    of exports, worsening external circumstances and hurting economic growth and
    employment. This argument is not correct because the costs of pollution and
    other externalities are concrete and reduce the systemic productivity and com-
    petitiveness of the economy (work time lost due to illness or congestion, costs of
    treatment and hospitalization, etc.). However, there is strong resistance from the
    polluting sectors to accept charges against externalities, and political lobbies op-
    erate to protect their specific interests, even if contrary to the greater, (but dif-
    fuse) collective interest in a more balanced environment. A recent example was
    the agriculture pressure to reduce environmental standards in the Brazilian For-
    estry Code, with the argument that conserving forests would damage the com-
    petitiveness of the country’s agribusiness.
    The current structure of environmental management in the country re-
    mains based on “command and control” instruments. Even though the Brazilian
    environmental protection system can be considered as relatively advanced if
    12
    Young, C. E. F. (2005), “Financial Mechanisms for Conservation in Brazil”,
    Conservation
    Biology
    , Vol. 19, pp. 756-761
    .
    Carlos Eduardo F
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    270
    compared to other Latin American countries, important issues remain unre-
    solved, and the indicators of environmental quality in Brazil are still well below
    satisfactory.
    This is due, on the one hand, to the lack of investment in infrastructure
    and urban services (sanitation, public transportation, garbage collection, public
    housing), the persistence of large pockets of poverty (proliferation of slums and
    other degraded environments, as well as advancing agricultural frontier in defor-
    ested areas) and consumption patterns that result in worsening of environmental
    conditions (the fast growing fleet of private cars is the most glaring example).
    Environmental aspects are still poorly integrated in the formulation of public
    policies, and the problem is compounded by the lack of information about the
    extent and significance of the problems resulting from environmental degrada-
    tion. But the dynamics of erratic economic growth, rapid urbanization and the
    crisis of the state can be identified as part of the question, with the management
    model adopted also proved inadequate to address several problems.
    Therefore, the actual environmental managers recognize the need to
    seek more efficient ways of control. There is growing consensus on the need to
    ensure greater flexibility to the economic agents, and seek new sources of fund-
    ing that are directly related to the causes of environmental problems.
    There is already a series of experiments in Brazil considering the “in-
    ternalization of externalities” and payment for ecosystem services, incorporating
    economic instruments based on the principle of “polluter / user pays”, in which
    the use of natural resources becomes charged accordingly to legal standards
    13
    .
    The great advantage of these proposals is more flexibility, in order to minimize
    the social costs of adjustment to environmental goals.
    Internationally, carbon markets are the most quoted example of eco-
    nomic instruments for environmental management. However, the Clean Devel-
    opment Mechanism (CDM) has been very limited in Brazil, especially in the en-
    ergy sector, since most of the electricity is already supplied by hydropower and
    the country is the world’s pioneer on biofuels, introduced before the Kyoto Pro-
    tocol (so, they don’t present the additionality required for the validation of car-
    bon credits).
    The proposal for credits from the Reductions of Emissions from Defor-
    estation and Forest Degradation (REDD) creates a new window for carbon mar-
    13
    Ibid.
    G
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    271
    kets in Brazil, but resources will be available only after the new rules for the
    successor of the Kyoto Protocol are established.
    “Green” criteria in public procurement policies are a tool to enhance
    sustainability in the purchase of goods and services. These initiatives seek to en-
    courage contracts and bidding documents for procurement that emphasize sus-
    tainability criteria, including guides to sustainable procurement. However, pub-
    lic procurement practices in Brazil are still dominated by preference rules for
    products with lower price – it is quite common to hear criticism of the Law
    8666/93, which regulates the process of public procurement in the federal ad-
    ministration, in a way that it is biased against products with higher quality but
    higher price.
    6.
    F
    INANCING
    Financial institutions have the capacity to influence decision-making in
    the economy through the policies adopted in credit allocation, including socially
    responsible economic practices. Typical activities in the financial sector are not
    directly related to the use or processing of raw materials and resources linked to
    biodiversity and entailed ecosystem services. However, financial institutions
    represent an important link in the production chain, since they are responsible
    for funding a wide variety of sectors and activities that are directly responsible
    for the use of natural resources. Financial institutions are increasingly seeking to
    associate their brands with sustainability in their lending processes, in terms of
    the environmental impacts of the business. This can occur voluntarily or be in-
    duced by public policies and laws that restrict lending to enterprises that do not
    meet environmental legislation.
    That change came in part because the financial institutions have become
    a “moral co-responsible” for the impacts of the businesses they support since, in
    modern management, a company cannot be considered as a fiefdom isolated
    from community life. The company and its management, including its funders
    should consider the impact of company activities at the community and strive to
    avoid harmful changes to the members of the community and environment in
    which they are inserted.
    The incorporation of the principles of environmental responsibility is
    beneficial to lenders because it considerably reduces future risks, since envi-
    Carlos Eduardo F
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    ronmental and social demands will increasingly affect the success of a business.
    Current action should avoid liabilities that may derail the project in the future,
    even if in the present such socio-environmental problems are not yet routinely
    considered in decision making. For example, companies can now be processed
    by the damage caused by the accumulation of toxic waste, even if such waste
    originated in a time when there was little effectiveness in the implementation of
    environmental standards.
    The concern of financial institutions with environmental themes oc-
    curred initially as a way to avoid legal liability for future damage produced by
    goods that were received as collateral for loans. Later, the concern was extended
    to the “chain of custody” since the liability of producers of final goods was also
    extended to the supply chain. Finally, the issue of corporate image has become
    increasingly regarded as an asset to be preserved, especially when campaigns
    denouncing the pernicious effects of the projects became more frequent.
    The requirement of sustainability criteria in financing operations has
    become increasingly frequent in order to avoid losses on transactions that may
    be blocked in the future for environmental reasons. Internationally, the most
    prominent initiative is the “Equator Principles”
    14
    , which establish minimum cri-
    teria for granting credit, ensuring that the funded projects are socially and envi-
    ronmentally responsible. The Equator Principles establish a code of conduct for
    voluntary financial institutions to assume their share of responsibility on the im-
    pact and damage caused to the environment by financed operations. In practice,
    this means that developing credit assessment criteria became more selective in
    terms of externalities associated with the projects to be financed, especially in
    the provision of funding for large projects
    15
    . An example is the safeguards sys-
    tem suggested by the International Finance Corporation (IFC) in the evaluation
    of project financing. The implementation of these safeguards is the responsibil-
    ity of the banks, which must invest in the training of loan officers to meet these
    requirements. If the borrower fails to comply with one of the social and envi-
    ronmental clauses, the lender will work with the borrower to find solutions.
    In Brazil, public financial institutions have a predominant role since
    most of the funding to investment is concentrated in public agencies. Indeed, the
    14
    Equator Principles, http://www.equator-principles.com.
    15
    Young, C. E. F. (2012),
    Financial Sector: Basic Support for Transition to Green Economy
    ,
    op. cit.
    G
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    Revista del
    CESLA
    ,
    No. 16, 2013, pp. 261-277
    273
    Federal Government launched the “Green Protocol” in 1995 with the objective
    of encouraging sustainability conditions in the credit operations of its financial
    institutions, including the National Bank for Economic and Social Development
    (BNDES) and the Bank of Brazil (BB). The idea was to incorporate environ-
    mental principles into all levels of these institutions, going beyond the minimum
    legal requirements, introducing environmental criteria for lending, and creating
    specific credit lines with more favorable conditions for projects that would result
    in environmental gains. However, as a whole, there was no great effectiveness in
    the implementation of the Green Protocol. Different institutions adopted hetero-
    geneous criteria concerning environmental issues, but their action has been
    mostly restricted to demand the enforcement of existing environmental legisla-
    tion in their routine operations.
    Another difficulty to go beyond legal requirements is the need for com-
    plementary actions, such as customer information, parameter setting, establish-
    ing baselines, qualification and hiring personnel. This would require partner-
    ships between banks, regulatory agencies and environmental NGOs, because the
    fund managers do not have the technical capacity to make this assessment. But
    these partnerships are yet to be established.
    A bottleneck in the process is the fragility of the public environmental
    management system in Brazil. By conditioning the approval of the credit for ob-
    taining the license, the project is “tied up” with the environmental agencies,
    which often lack human, financial and technical resources for the rapid dispatch
    of licenses. As a result, there may be significant delays in project implementa-
    tion, which contributes little to the spread of the Green Protocol as an output that
    reconciles economic growth and preservation.
    7.
    G
    REEN ECONOMY INDICATORS
    New metrics should be established to evaluate how “green” is an econ-
    omy. Fundamental aspects such as employment generation, inflation control and
    competitiveness remain important, but new ways of measuring economic activi-
    ty should be established at both the macro and micro level.
    On the macro level, the establishment of a system of national accounts
    that effectively incorporate externalities related to natural resource use depends
    much more on political than technical issues. There are already established
    Carlos Eduardo F
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    methodologies and techniques to measure the environmental impacts associated
    with the aggregate economic activities responsible for their generation. The apa-
    thy of statistical agencies to institutionally advance on these issue reveals, once
    again, the lack of political interest on the part of national governments to present
    the environmental outcome of their actions. In Brazil, although studies have al-
    ready been carried out since the early 1990s
    16
    , the elaboration of environmental
    accounting to measure natural capital associated with the national accounts sys-
    tem remains at the design level.
    In the private sphere, the increasing interest of the ecological footprint
    of companies, including the need of assessing the risk of future problems caused
    by environmental liabilities, led to the creation of different levels of financial
    performance for companies with environmental responsibility. The most famous
    of these indices is the Dow Jones Sustainability Index (DJSI) (Dow Jones Sus-
    tainability Index), established in 1999, which helped demonstrate that compa-
    nies most committed to social and environmental issues had an above average
    performance. The idea eventually spread into other financial markets and, in the
    Brazilian case, the Corporate Sustainability Index (ISE) was established in 2005
    by the São Paulo Stock Exchange (Bovespa), with support from the International
    Finance Corporation (IFC). To be accepted in the Index, a company must be
    evaluated not only according to its economic efficiency and corporate govern-
    ance, but also according to its environmental performance and contribution to
    social justice, reflecting a recognized commitment to social responsibility and
    corporate sustainability.
    Finally, the company’s competitive strategy has incorporated the need to
    identify with the principles of green economy increasingly demanded by society.
    In this case, objective criteria of separation should be established, and there is
    still plenty of room for progress in building business sustainability indicators
    that are reliable and practical. The latest advances have occurred in the assess-
    ment of environmental impacts for businesses. Leaving the realm of environ-
    mental impact studies, companies have increasingly been involved with envi-
    ronmental balances and other forms of incorporation of environmental liabilities
    in their accounts. However, these actions are still restricted to a relatively small
    16
    For example, Young, C. E. F.; Seroa da Motta, R. (1995), “Measuring Sustainable Income
    from Mineral Extraction in Brazil”,
    Resources Policy
    , Vol. 21, pp. 113-125.
    G
    reen Economy Policies in Brazil: Challenges and Opportunities
    Revista del
    CESLA
    ,
    No. 16, 2013, pp. 261-277
    275
    set of leading companies, and there is a lack of homogenization of standards of
    environmental accounting.
    There is an international effort to diffuse and homogenize these new ac-
    counting practices. But the effective dissemination on a large scale will only oc-
    cur when the national bodies responsible for the regulation of balance sheets and
    other accounting business become mandatory consideration of these new forms
    of natural capital in the routine practices of companies.
    8.
    C
    ONCLUSIONS AND RECOMMENDATIONS
    The process of redistribution of income in Brazil has brought positive
    impacts both for employment generation and for improving the quality of life.
    But it has not been enough: deeper changes are needed so that the momentum is
    maintained in the long term. The transition to a Green Economy creates a unique
    opportunity to redefine the direction of Brazilian development. Combined with
    advances in education, housing and citizenship, in general, the investment re-
    quired for this transformation can simultaneously increase economic activity in
    the short term (for example, the need for reordering of large cities) and bring
    more “authentic” competitiveness in productive sectors, through innovation and
    professional qualification.
    But this requires a redirection of economic efforts, which are currently
    focused on the model of exporting raw materials or commodities that largely
    have their competitiveness based on spurious factors, with unsustainable use of
    natural resources and no significant effects for social inclusion. In other words,
    the desired transition to a Green Economy will not take place without structural
    reforms, changing the role of the Brazilian state and the regulatory framework
    for this to happen.
    This includes:
    ˗
    The internalization of externalities through the implementation of the
    polluter-pays principle;
    ˗
    The re-orientation of procurement policies, with the adoption of sus-
    tainability criteria and emphasis on socio-environmental certification;
    and
    Carlos Eduardo F
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    ˗
    The re-orientation of the principles of macroeconomic policy making,
    stressing the quality of growth rather than the quantity of growth, in-
    cluding principles for “green” taxation and finance.
    Only this way Brazil can move towards an economy where the aggre-
    gate value will occur by increasing efficiency and innovation, instead of provid-
    ing the lowest cost of agriculture or industry fostered by public policy misguided
    investments in large infrastructure projects that care little about the social costs
    of long-term consequences.
    Companies should also seek to insert this new competitive paradigm
    through a proactive behavior that goes beyond simply meeting legal obligations.
    Some Brazilian corporations already have been successful, and their competi-
    tiveness is strongly based on “modern” image achieved through investment in
    environmental responsibility, especially in the areas of consumer goods. This is-
    sue is already incorporated into the discourse of most Brazilian companies, es-
    pecially in large corporations. However, there is a big gap from discourse to
    practical actions widely adopted in the firm.
    To stimulate this transition, we need to develop new frameworks for ac-
    counting and reporting sustainability criteria, with transparency, comparability
    and understanding the environmental consequences of corporate action. More
    important than simply presenting the image of the corporation, this information
    should be used to guide the decision making of investors, suppliers and consu-
    mers.
    B
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