What NC can learn from Brazil on energy policy
Brazil is far from being a perfect country, as severe issues of urban violence, systemic poverty, and government corruption plague the country. Nonetheless, the South American giant also has many positive aspects that should serve as inspiration around the world — including North Carolina.
With the advantage of spending a significant portion of my life in Brazil, and now studying economics at UNC Chapel Hill, I have had the privilege of closely analyzing and contrasting many aspects of public policy, economics, and politics in both the South American giant and North Carolina. The striking difference in energy-policy approaches between the two is a specific area that has captured my attention. After thorough examination, here is why I believe North Carolina should look to Brazil for inspiration on energy policy.
Firstly, few countries do better than Brazil when it comes to balancing effective, responsible, and affordable energy production. With its abundant natural resources, the South American country has the third cleanest energy production among all nations. One of the keys to Brazil’s success is its diverse energy matrix, which relies on sources such as hydropower, biomass, and wind. North Carolina doesn’t have as abundant natural resources as Brazil, but it could definitely follow Brazil’s example to diversify its energy matrix. With the passing of House Bill 951, the state committed to cutting carbon dioxide emissions by 70% from electric public utilities until the year 2030, and it has a unique opportunity to expand its energy solutions while at the same time becoming more environmentally aware.
North Carolina can also be inspired by Brazil in the latter regard. Compared to the world average of 4.69 metric tons per capita in 2021, Brazil places far below average when it comes to CO2 emissions per capita, at 2.28 metric tons per capita. CO2 has decreased nearly 17% since 2014, according to a report by Our World in Data. On the other hand, North Carolina has made significant progress in decreasing CO2 emissions by over 40% since 2000, but still ranked poorly with 11.7 metric tons per capita in 2019, which is significantly higher than the world average. By taking inspiration from Brazil’s diversified energy matrix, North Carolina can aim to reduce its CO2 emissions and move towards more sustainable and cleaner sources of energy.
Duke Energy suggests a mix that includes significant amounts of natural gas, nuclear energy, and hydropower. While the two first accounted for roughly 69% of North Carolina’s energy production in 2021, hydropower only accounted for 4%, despite having significant generation potential found in the mountainous area in the western two-thirds of the state. With the rapid decline of coal dependency (falling from ~60% to ~25% of the matrix just in the past two decades) the possibilities are endless for North Carolina to endorse responsible and effective energy solutions.
Solar energy, while challenging to be mass-implemented as a government-driven initiative, has seen exponential growth in terms of spontaneous residential investment with solar panels in North Carolina. In fact, the state went from having 0.02% of homes with solar panels in 2012 to 2.5% in 2019. This is more than a 100-fold increase, as the average installed cost of solar panels dropped 64% in the last decade from $7.35 per watt to $2.66 and continues trending down.
The trend is also occurring in Brazil, where solar generation increased nearly 300 times just between 2015 and 2021. The decline in prices — largely due to an increase in demand, technological advancements, and increased competition — means North Carolinian families can independently invest and complement their energy production, therefore relying less on outside sources. It also means that the government could progressively reduce and eliminate subsidies in the solar energy industry, which distort market prices. It is worth noting, however, that despite the decrease in prices, solar is still significantly more expensive than other energy options.
On the flip side, Brazil could also learn from North Carolina — specifically in its use of nuclear facilities, a largely underexplored source in the country. Nuclear energy has generally been a consistent and reliable component of the North Carolina energy grid, one that is affordable and clean. Having those benefits in mind, Brazil is currently building its third nuclear reactor Angra-3, a massive facility with generation capacity of 1,340 MW expected to be completed between 2026 and 2027.
In summary, there are a number of exciting developments in energy in both Brazil and North Carolina. Getting to study energy policy in both places, there are great opportunities for an exchange of knowledge between the two that could advance a future with energy that is cleaner, more affordable, and more reliable.