From Oil to Forests: The Paradox of Using Oil Resources for Brazil’s Climate Transition.
By Yandra França (CFC-GS/UFPA) The urgency of transitioning the global economy towards sustainability is no longer news, nor is the urgent need to reduce greenhouse gas (GHG) emissions. In this regard, Brazil faces a unique transition: rural, forestry, urban, and industrial all at the same time. It is in this context that, through Law No. 12,144/2009 of 2009, the Brazilian government created the National Fund on Climate Change: the Climate Fund. In this light, the Climate Fund is a national policy mechanism on climate change, with an accounting nature and a mitigating character of decarbonization, in addition to adapting to climate impacts. Furthermore, there are two types of financial application: repayable financing—operated mainly by the BNDES—and direct non-repayable support, distributed through public notices from the Ministry of the Environment and Climate Change; this joint architecture enables the Fund to act in both large infrastructure projects and social, community, and scientific initiatives. A priori, this is a common model within climate finance. However, the Fund is paradoxical, as its origins envisaged resources coming from the Union’s special participation in the exploration of oil, natural gas, and other fluid hydrocarbons; currently, this participation is no longer fixed, and from this perspective, part of the oil revenue would finance the post-oil economy. Furthermore, Brazil is among the ten largest oil producers in the world (IBP, 2025), which raises questions: to what extent is this relationship really good for climate transition, or does it merely favor an industry that should be phased out? Currently, the country generates 88% of its electricity from renewable sources (Gov, 2025), which is above the global average of the Organization for Economic Cooperation and Development (OECD); moreover, it is also the second largest producer of biofuel in the world (IEA, 2025). So, how effective are the resources from the pre-salt layer? For the current government, this continues to be a driving force for climate justice, since, during COP 30 in Belém, President Luiz Inácio announced the creation of a fund with oil exploration resources to finance the fight against climate change and promote climate justice, “Directing part of the profits from oil exploration to energy transition remains a valid path for developing countries” (Lula, 2025). However, the president of the Talanoa Institute took a stand against this statement: “The logic of using fossil fuel revenues to fund the transition keeps the system alive. We need to deactivate it, not reinvent it with new slogans” (Talanoa, 2025). Nevertheless, this ambiguity highlights several dilemmas regarding the scope and obstacles surrounding a just climate transition: should one of the structural causes of the climate problem pay for it? Or could this approach lead to dependencies and transactional delays? Has Brazil not already demonstrated the economic and financial strength to continue its transition without resorting to this means? Therefore, the fossil paradox is a controversial apparatus within the construction of the new global climate economy. However, for it to be effective and not a source of political greenwashing, it is imperative that its financing be directed toward climate adaptation and development, so that the feared dependency does not materialize. Moreover, this contradiction reveals a fact: the climate transition is unique, dynamic, and complex, requiring constant management and coordination to achieve the desired global goal.
