chapter  3
15 Pages

Energy and income distribution in Brazil’s development process

ByEDMUND AMANN, WERNER BAER

Income and property concentration has been a constant in Brazil’s economic history from colonial times onwards.2 Much of the literature concerned with this theme has centered on issues such as distribution of land, industrialization strategy and inflation. One theme which has been overlooked concerns the impact of the type of energy used on income distribution. An investigation of this question now seems especially pertinent given the Lula government’s commitment to both poverty alleviation and to the development of new energy sources. The purpose of this chapter is to examine the links which may exist between changes in Brazil’s energy mix and alterations in the pattern of income and property distribution. A special focus of the chapter is its analysis of the distributional implications of bio-ethanol fuels. The chapter adopts the following structure. In the first section we analyze the development of energy sources in Brazil, tracing events from the pre-industrialization period through the ISI period, and then to the oil shock of the 1970s. Next, the crisis years of the 1980s are reviewed. Following this, the discussion is brought up to date by analyzing the development of the energy sector from the early 1990s onward. Next, we examine the possible links between changes in the pattern of energy supply on the one hand, and distribution on the other. In particular, the distributional implications of Brazil’s growing energy self-sufficiency are investigated. Themes reviewed here include the possible distributional impacts of the proalcohol ethanol program and the increasing role of hydrocarbons in Brazil’s electricity generation. Finally, in the concluding section, we draw together the main arguments and comment on the possible future evolution of the energydistribution relationship.