The Dirty Underside of Lula's Clean Energy Revolution

Brazil's biofueled paradise is looking more and more like a carbon-spewing wasteland.

When you fill up your car with a gasoline and ethanol blend most likely you are burning ethyl alcohol produced from U.S. corn. A few years from now, however, your commute may be powered by ethanol made from sugar cane cultivated in the Brazilian cerrado. An economic powerhouse dynamically bursting forth on to the world stage, Brazil is the Earth's largest producer of sugar cane ethanol. President Luiz Inácio Lula da Silva has jumped on the ethanol bandwagon, repeatedly remarking that his country's fortunes depend on a future in which "we plant and harvest fuel." In São Paulo, a sprawling city of 18 million, motorists can fill up their tanks with either gasoline or ethanol, known in Brazil as alcool. Most opt for ethanol, not surprising given that this biofuel costs half the price of gasoline.

Though Brazil's exploration of ethanol production goes back to the 1920s, it wasn't until the 1970s that the industry started to gain any traction. Buffeted by the oil price shock of 1973, the country's military dictators grew concerned about Brazil's reliance on foreign imports of fossil fuels. Their solution: Pour government subsidies into the sugar industry and mandate ethanol distribution at the pumps. Today one can buy so-called "flex-fuel" cars (known as carros flex in Portuguese) that run on gasoline, ethanol, or any combination of both. Because ethanol is cheap, the public has bought up the cars, and currently a full 90 percent of new vehicles sold can run on alcool.

There's no escaping it: Brazil has become deeply committed to ethanol, and economists expect that "alcohol fever" could attract some $100 billion in investment. The industry hopes that this will lead to the construction of one hundred new distilleries by 2012, by which time domestic ethanol production will have doubled.

On the surface of it, Brazil's ethanol boom has proven to be both economically and environmentally desirable. The sugar cane-based fuel is 30 percent less expensive to produce than the corn-based variety coming from Iowa. Sugar ethanol is also efficient: One acre of sugar cane can yield more than twice as much ethanol as an acre of corn. Compared to corn, sugar cane also looks pretty environmentally friendly: Brazilian farmers use less fossil fuel to convert sugar cane to alcohol than Iowa's farmers do to produce corn ethanol. Even better, plant waste from sugar cane can be used to produce heat and electricity right in the distillery itself.

As a result of its turn toward ethanol, Brazil avoided emitting 600 million tons of carbon between 1974 and 2004. So what's with environmentalists who complain about ethanol -- won't they ever be satisfied?

While sugar cane ethanol is certainly less ecologically destructive than some other biofuels, the industry's boosters have overlooked one key fact: You've got to plant sugar cane somewhere. One couldn't pick a worse place to harvest cane than Brazil's Atlantic rainforest. There, sugar cane crops have led to deforestation and, paradoxically, more carbon emissions.

It's difficult to imagine that a serene and pastoral landscape lies just beyond São Paulo. Take a bus through the city and the miles and miles of grey industrial factories stretch on forever. But nearby is the Atlantic rainforest, also known as the Mata Atlântica. When the first Portuguese explorers stepped ashore in 1500 A.D., the forest may have covered more than 500,000 square miles, or approximately one-fifth the size of the current Amazon jungle lying 500 miles to the northwest. To put it in perspective, that's an area about twice the size of the state of Texas. Located in the Brazilian south and southeast, the Atlantic rainforest ranged all the way up to the Northeast in a long coastal strip. In some areas the forest even extended a full 300 miles inland or more and encompassed a broad spectrum of habitats, including coastal mangrove thickets and mountain massifs 3,000 feet high, covered in broad-leaved evergreens and conifers.

In a bad omen, one of the first things the Portuguese explorers did was to chop down a tree. They then built a cross out of it and celebrated Mass, claiming the land and rainforest for God and king. In short order the Portuguese went to work, cutting down trees and releasing the carbon stored in the rainforest. In 1525, the Portuguese began to grow sugar cane and introduced the crop to the Atlantic rainforest. Then, the colonists shipped six million African slaves to Brazil to do the cutting.

Over the next five hundred years the Atlantic rainforest bore the brunt of Brazil's economic development. The country's eastern seaboard has long been the main population and industry center -- 70 percent of Brazil's people live there and the area includes huge cities like São Paulo and Rio de Janeiro. Over time, Brazil lost about 93 percent of the Atlantic rainforest and today only tiny remnants of the ecosystem remain.

Today, Rio and São Paulo are congested mega-cities, yet try as it might Brazil cannot escape its colonial sugar legacy. Just outside the urban center ethanol producers have set up shop in the Atlantic rainforest, and last year the government fined two dozen of these firms for illegally clearing the land. After the authorities clamped down the companies were obliged to restore 143,000 acres of rainforest.

Whatever the environmental advantages of ethanol, this thriving business now threatens our Earth's climate balance by its destruction of the Atlantic rainforest. It is ironic that a supposedly green industry could wind up imperiling such a valuable habitat. Though it's a fraction of the size of the Amazon, the Atlantic rainforest contains a similar range of biological diversity. Consider: The area has about 2,200 species of birds, mammals, reptiles, and amphibians. There are almost 200 bird species and 21 species of primates in the Atlantic rainforest that are not found anywhere else in the world. Furthermore, there are approximately 20,000 species of plants, representing 8 percent of the world's total, and new species of flora and fauna continue to be discovered. Among biological hotspots -- environmentally threatened regions with a high number of species encountered nowhere else in the world -- the Atlantic rainforest ranks as one of the top five.

The environmental destruction unleashed by ethanol in the Atlantic rainforest is troubling enough, but what if sugar cane were to lead to more deforestation in other sensitive areas? Today the Brazilian sugar cane industry is centered in the state of São Paulo -- drive just an hour out of the city and you can see sugar cane fields stretching for hundreds of miles. Palmares Paulista is a rural agricultural town 230 miles from São Paulo. Behind rusty gates lies a squalid red-brick tenement building. Inside, weary migrant workers breathe the stale air and try to prepare themselves as best they can for the long day ahead. The cortadores de cana, or sugar cane workers, are crammed into tiny cubicles filled with rickety bunk beds and unpacked bags. They hail from the poverty-stricken, drought-plagued northeast and earn paltry wages.


Despite the hellish conditions for the workers, ethanol has been able to sell itself to the public on its ability to reduce carbon emissions. Again, however, there are other greenhouse gases to consider besides carbon dioxide. The Brazilian ethanol industry uses more than 240,000 tons of nitrogen fertilizer per year at a cost of about $150 million. At a public senate hearing in Brasilia called to discuss climate change, experts expressed concern that nitrogen fertilizers used in conjunction with sugar cane production yielded nitrous oxide. What's more, when you cut cane by hand you've got to set controlled fires in the fields to smoke out razorsharp leaves, nasty snakes, and tarantulas. In the middle of the night, plantations look like a war zone as burning fields light up the sky and the wind blows billowing smoke clouds far and wide.  Not only do the burnings pollute the air with soot, causing a number of illnesses, but they also release methane, a potent greenhouse gas, and nitrous oxide.

Public officials declare that ethanol will not lead to deforestation in the Amazon or exacerbate climate change. They say that the particular soils and rainy weather characteristic of the rainforest are not suitable for the growth of sugar cane. Agriculture minister Reinhold Stephanes has been quoted as saying that "Cane does not exist in Amazonia." In a withering blow to Stephanes's credibility, however, authorities recently raided a sugar cane plantation in the state of Pará where 1,000 workers were laboring under appalling debt slavery conditions. In all, environmentalists claim, hundreds of thousands of acres of sugar cane have been planted in the Amazon.

Even if there are only a few cane plantations operating in the Amazon, ethanol may exert an indirect impact on the rainforest through a phenomenon known as "agricultural displacement." Though the state of São Paulo is located far from the Amazon rainforest, the sugar cane there can drive other crops toward the agricultural frontier. In the state of São Paulo, sugar cane has been planted on former pastureland and this has pushed cattle into Mato Grosso. Hundreds of thousands of cattle are moving into the Amazon every year as a result of displacement by ethanol in the state of São Paulo alone, say environmentalists. This migration is becoming all the more likely since one can purchase 800 hectares of land in the Amazon for the price of just one hectare in São Paulo. Additionally, some soy plantations in the center of the country have been turned over to ethanol production, prompting concern among environmentalists that this will lead soy producers to move into the Amazon. And local observers say that sugar cane plantations are already pushing soy farmers and ranchers into the rainforest.

There's been a fierce back and forth between European and Brazilian officials on the question of biofuels. The top scientist at the U.K. Department for the Environment recently warned that mandating more biofuel use as proposed by the European Union would be "insane," as this would lead to an increase in greenhouse gases. Sweden, the only European country that already imports Brazilian ethanol for its public transportation system, used to think biofuels were heaven but now believes they are hell. After allegations that some Brazilian sugar cutters were paid paltry wages, were underage, and even perished at a young age from exhaustion, Swedish motorists threatened to cease their use of this supposedly green fuel. To make matters worse for the burgeoning Brazilian ethanol industry, the United Nations has added its voice to the chorus of critics. Achim Steiner, head of the body's environment program, declared that growing international demand for ethanol would threaten the Amazon if safeguards were not put in place.

Shooting back at critics across the Atlantic, President Lula said that biofuels were actually an effective weapon in the struggle against global warming. Lula chided Europe further, claiming that the developed world was simply jealous of Brazil's emergence as a major agricultural powerhouse. "Just when Brazil appears on the world stage not as a bit part actor but as the lead in a play about agricultural production ... people start to get uncomfortable, very uncomfortable." Furthermore, the Brazilian politician remarked, European competitors were using the environment as a red herring to stall Brazil's biofuel industry. "We have adversaries that will make up any kind of slander against the quality of ethanol," Lula declared. But as Brazil attempts to roll into an ethanol-fueled future, the attacks Lula denounces will become increasingly valid.



Reading Saddam's Fortune

A long-time Middle East correspondent recalls his bizarre experience of the Iraq invasion in the house of a Yezidi prince -- and meeting a fortune-teller who only revealed to him that his future was not in journalism.

By the time I made the journey described below I had been associated with the Middle East for 25 years, mostly as a foreign correspondent. It comes just as hostilities were breaking out during the Iraq war, which was a turning point for me. I had been the only Wall Street Journal correspondent in Iraq in the run-up to the war, and had felt frustrated that all the reports I had sent had not been able to convince readers that the war was a terrible idea. After the war I tried to go back to work in the Middle East, but found that I no longer believed in my work, partly due to my sense that as a Westerner I shared responsibility for the conflict, partly because as a reporter my profession had done so little to stop it, and partly because I couldn't believe any more that I was being honest when making the standard request for an interview: "please talk to me, because your words will reach a Western audience and make a difference." Already at the time of the war I was minimizing my exposure to any danger, convinced that the risks involved in war correspondence were no longer worth the rewards. I had already decided that the safest place to cover events was from the angle of northern Iraq, where I knew there would be little fighting and where I knew many people. This in turn led me to the Yezidis.

In the very first days of the U.S. occupation of Iraq, my fixer, Sagvan Murad, was a young and active member of an ancient religious community called the Yezidis. They numbered about half a million people in Iraq, the bulk of them living south of the front line and under Saddam Hussein's government control. Murad told me that community leaders on the side that was free, liberated, and developing since 1991, had or ganized a plan for a smooth takeover of the Saddam-controlled areas. It was his boss in a Yezidi cultural center, a part-time guerrilla chief, who had invited us to accompany them south when Saddam's control collapsed. This offer of open access to whatever awaited these Yezidis presented what I thought was my best bet for an original story about the northern front of the Iraq War. Here was something that might go right, as opposed to what I felt to be the great wrong of Operation Iraqi Freedom. Yezidis might seem obscure, but they were as Iraqi as Kurds, Sunnis, Shias, Assyrians, Marsh Arabs, Sabaeans, and all the other subgroups that made up the country's twenty-five million people. After all, if the war was on behalf of human rights and democratic freedoms, the Yezidis were the kind of issue it should have been all about.

The Yezidis had princes, castles, fortune-tellers, and an unusual religion. A subgroup of the Kurds -- in their eyes, they were the original Kurds -- their ancient faith was, to say the least, notably different from any of the surrounding patchwork of religious cultures. Indeed, Yezidi priests were so secretive that their exact doctrines were a mystery even to most of their adherents. Since they were Kurds, not orthodox Muslims -- possibly not Muslim at all -- they had been subjected to plenty of discrimination, or, as the Yezidis put it, "seventy- two genocides," which put them high on the scale of oppression, even in the Middle East's competitive arena. Muslims and others even put out the scandalous rumor that Yezidis worshipped the devil, which was entirely untrue.


As he halfheartedly agreed to my war strategy by satellite telephone, my longsuffering editor at the Wall Street Journal, Bill Spindle, added the warning that my story would have to be very strong to make it to the front page. I knew I faced a great challenge. Like the rest of the Kurds, the Yezidis were part of the solution, not the problem. They were marginal and inherently unnewsworthy. Still, whatever my story about the Yezidi northern front lacked in confrontational punch, I reckoned I would be able to make up in telling details about one alternative, peaceful method of taking over a chunk of Saddam Hussein's Iraq.

Early on, Murad had introduced me to the leader of the "free" Yezidis, Prince Kamuran, a nephew of the overall prince who lived in the Saddam-controlled areas. Prince Kamuran dressed the part, wearing a splendid baggy costume in fine stripes and a pale red-and-white head scarf. He had invited me to stay at his palace in the village of Baadra, from where, he said, I could see the lights of Mosul at night or, when the war started, the smoke of high explosives from any bombing by day.

While waiting for our part of the front to become active, I took the prince up on his invitation. The prince's palace in Baadra overlooked the government-held valley that led to Mosul. It was neither particularly grand nor humble, a one-story, thick-walled structure built around a square courtyard with some trees and the obligatory little English lawn. Prince Kamuran was waiting in the corner of his reception room. He greeted us with practiced and roguish ease. Iraqi arak appeared for me, as did some whisky for Murad and Turkish beer for the driver. On the wall was an erratic array of pictures: his princely father, a Yezidi holy peacock, and Richard Nabb, the legendary American colonel whose careful pushes forward did so much to make Iraqi Kurdistan a feasible zone in 1991. There was also his father's ancient-looking sword, its scabbard tied together with a ragged strip of cloth and its handle bound with dirty string. We sat on an assortment of stuffed armchairs and stools lined up around the edge of the room, which was dominated at one end by a grainy television screen.

Servants arrived with fruit, Pringles and, in the end, two plates of mushy, well-seasoned chicken-and-vegetable stew.

"We always used to kill a lamb for visitors, but then we realized you never ate it," the prince joked, zapping through the channels of his television.

It was true that such Middle Eastern lambs could turn out to be tough, smelly old sheep, but I kept my counsel.

"When I went to Italy, you know, it was the first time I saw men with fl at tummies, without big bellies like we have. You Westerners taught us to eat light. No cholesterol molesterol!"

Our unpromising conversation faltered and crashed as live news streamed onto the screen of the first big U.S. bombing of Baghdad, 240 miles to the south. We all rushed up to the roof, expecting explosions when the U.S. planes and missiles reached the city of Mosul, whose lights glowed silently on the horizon to the southwest. A few antiaircraft shells lofted into the air. We began to get cold in the open. The prince had a better idea.

"This is no good. Let's go and watch it on TV."

The bombardment of Baghdad didn't satisfy my host, however.

"You have to bomb the whole of Iraq to bits before there will be any collapse in the armed forces. Saddam's terror machine cannot be derailed by anything else!" the prince declared.

Annihilation of the enemy might be the house rule in Mesopotamia, but I couldn't agree it would do much good. I was sure many innocent people were getting killed and injured in the hail of destruction raining down on the Iraqi capital. In faraway America, a retired U.S. general doing analysis for CNN declared that "it really is a symphony that has to be orchestrated by a conductor." When Secretary of Defense Rumsfeld appeared to talk about how carefully targets had been chosen, the prince laughed in scornful protest.

"You can't fight Saddam like that," he scoffed, and switched to al-Jazeera.

The prince didn't like al-Jazeera's anti-U.S. politics, but he did prefer the local perspective. At the height of the bombing, the Qatari satellite channel just let us watch the massive mushroom clouds billowing up into the Baghdad night sky, underlit by new and continuing explosions. I felt sick. It looked like Armageddon.

"Well, here's the war to disarm Iraq of its weapons of mass destruction," the al-Jazeera correspondent said. Then he added with finely tuned sarcasm, "Clearly, the weapons you are seeing being used to night are not those of mass destruction."

I retired to an uneasy sleep under a thick, heavy, cotton-packed duvet. I woke up to take stock of my palace quarters: a thin carpet, a blanket over the unwashed window, a rickety plywood cupboard, hooks to hang clothes on, and, in a nod to the prince's British tastes, an iron bedstead with sagging springs under the thin mattress. The morning news on television was now nonstop war fever. Back on the roof, I scanned the entirely peaceful front lines below me. The hours ticked by. It was hard to know what to do in this town of about one thousand flat-roofed, mud-brick houses. Apart from watching TV, my only distraction was trying to work out the protocol when the prince's wife emerged from her private harem in a voluminous purple gown to enjoy a cigarette in the courtyard.

"Baadra is also famous for something else, you know," Murad suggested. "There's a fortune- teller here who's famous throughout Iraqi Kurdistan."

It was an idea, at least. Not far from the castle, the fortune- teller, Shammu, sat cross-legged on a thin cushion on a worn-out floor covering in his gloomy, flat-roofed house. Thick dark glasses covered his eyes and a colored map of the signs of the zodiac hung above his turbaned head. Large-scale maps of the world torn from newspapers and some sparkly women's dress material covered parts of the mud wall. The roof was held up by round poplar beams, and I could see stones from the mud roof pushing through the interwoven branches above. A former road-building contractor, Shammu had found his current calling after being exiled for his Communist leanings and sentenced to build highways in Iraq's western desert. Almost in passing, Murad whispered that his wife had been shot dead by the Baathists in 1981.


The ex-engineer certainly had a scientific approach. He checked me in as his 10,519th consultation. Many of his star charts had been neatly precalculated in a child's notebook. He knew how to please by giving me positive prospects for wealth, sexual performance, openness, courage, and prescience. I was beginning to doubt the value of the exercise when my ears pricked up.

"Next year, you will win a prize."

Such talk gladdens any hardworking journalist's heart. I slipped him a couple of bars of Turkish chocolate, and soon it became "the big prize." Months later, I duly applied to a modest competition for foreign correspondents, in which I told myself that I had a chance of recognition for my efforts to warn America of the dangers of the Iraq War. The prize givers didn't acknowledge the entry. Similarly not as predicted, my child born two months later was a girl, not a boy. I received no great sum of money. I had no "heavy" social life. And instead of being offered a great new job after September, the futility I felt covering the Iraq War made me entirely lose my appetite for writing about the Middle East for the Wall Street Journal. Some eighteen months later I left the paper to build a house on a remote Turkish mountainside.

Clearly I was wrong to hope for much from the little backwater of Baadra. Perhaps the flaws in Shammu's predictions derived from an alphanumerical calculation based on my name, which has no standard Arabic spelling, and that of my mother, which once again made everyone worry. In any event, he hedged each prediction with an invocation of the divine.

"Your color is red. Your day is Tuesday. Your metal is gold. Your number is nine. And God only knows."

"How can you be a Communist and say these things?" I asked politely.

"That bit about God is tough for me to say, but if I didn't, they'd run me out of the village as an unbeliever! It's the same with my mustache. I want to shave it off, but nobody can accept that. They say it's a symbol of manhood, of being a Yezidi."

"As a Marxist, I suppose you don't accept business from the prince, then."

"Yes, I am very opposed to him on political grounds. But he pays handsomely for his horoscope. The schoolmaster comes by too. And our local holy man."

He saved his best line, though, for when I returned later to check something he'd said.

"I knew you'd be back."

I also did what many of his supplicants had done, it seemed: I asked what the stars had in store for Saddam Hussein. For this he extracted a loose-leaf page closely filled with calculations.

"He will die on April fifteenth, or disappear, believed to have been killed. The

West will overthrow the regime of Saddam Hussein," he said. "But, like Osama, his renown will haunt the West for years. Saddamism and bin Ladenism will be strong. From May twentieth, a new Middle East will start being built. There will be two and a half years of chaos in Iraq. Then a new character will arrive who will lead the country into evil. The United States will win a tactical victory but will have many troubles that will lead to the collapse of the American Empire."

Not much surprising in that -- Saddam's name, perhaps, having the proper Arabic astrological equivalent. What perplexed me, though, was the reaction of colleagues and interviewees over the next few weeks. I had become used to talking little at dinners and get-togethers. I had no daring escapades to boast of from the front lines and my antiwar commentaries were unfashionable. But whenever I let slip that I had the details of Saddam's horoscope, everyone fell silent, gathered close, and hung on my every word. I was clearly working in the wrong sector of the prediction business.

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