A climate champion calling for more oil. A rainforest defender greenlighting a highway through a pristine part of the Amazon. A promoter of a new Brazilian bioeconomy who accommodates the old beef industry.

These are the tensions that will define the climate legacy of Brazil President Luiz Inácio Lula da Silva, host of the COP30 U.N. summit that starts after a preliminary gathering of world leaders wrapped up Friday in the rainforest city of Belém. Lula, who plans to run for a fourth term in 2026, insists there’s no contradiction: drilling for oil is essential to fund the country’s energy transition, and commodity-driven agriculture networked by roads can coexist with forest preservation.

But his current term in office — and now as de facto organizer of the most important climate talks — risks clouding his claim to environmental leadership on a global stage. Lula’s flagship initiative to pay for forest conservation, known as the Tropical Forest Forever Fund, has had its initial $25 billion investment target cut back by 60% and only four other nations have committed significant money so far. He’s faced distracting fallout from Brazil’s deadliest single-day police raid in Rio de Janeiro, as well a trip to Colombia on the eve of the climate talks to address military tensions between the U.S. and Venezuela. As with any COP, there’s danger that a lack of consensus could prevent a positive outcome.

Even Lula’s decision to locate COP30 in Belém, a city with limited hotel rooms and sparse infrastructure, could backfire once an estimated 50,000 attendees arrive on Monday. Lula himself, like thousands of other participants, is staying on a boat during the two-week summit.

In his remarks in Belém before dozens of world leaders and other national representatives on Thursday, Lula highlighted Brazil’s progress while hinting at its complications. “Accelerating the energy transition and protecting nature are the two most effective ways to contain global warming,” he said. “I am convinced that, despite our difficulties and contradictions, we need roadmaps to justly and strategically reverse deforestation, overcome dependence on fossil fuels, and mobilize the necessary resources to achieve these goals.”

Lula’s efforts at climate diplomacy yielded some results on Friday, when Brazil succeeded in getting the European Union and China to join a coalition aimed at improving collaboration on carbon markets. And initial investment in the rainforest fund had also reached $5.5 billion, according to the Brazilian government, halfway to the new $10 billion target.

But in another sign of the trade-offs between climate and economics, Lula also announced Friday that Brazil will create a fund to finance the energy transition using part of the profits from oil exploration. That move comes just weeks after Brazil’s state-controlled energy company, Petroleo Brasileiro SA, received approval to explore for oil near the mouth of the Amazon River.

When Lula attended COP27 in Egypt in 2022 as president-elect, he was greeted like a hero. To cheering crowds, he declared that “Brazil is back” and vowed to bring the world’s most important climate talks to the Amazon. It was a sharp contrast to his predecessor, Jair Bolsonaro, who withdrew Brazil’s bid to host COP25 and considered leaving the Paris Agreement altogether.

Three years later, Lula has just celebrated a 50% drop in Amazon deforestation compared to the Bolsonaro years, when forest loss hit a 15-year high fueled by weakened environmental enforcement and policies favoring agribusiness. The COP30 delegates from nearly 200 countries descending on Belém, the capital of the Amazonian state of Pará, are adjacent to a rainforest that has reached its third-lowest deforestation rate since records began in 1988.

As in much of the world, climate and environmental issues rank low among the Brazilian public’s top concerns, lagging behind issues such as crime, economy and health. Local indigenous and environmental movements depend on international alliances for funding and visibility.

But a survey conducted by AtlasIntel for Bloomberg News found that more than 70% of Brazilians believe they will be affected by climate change in the next 10 years. The country remains split over priorities: 51% said that Lula should favor environmental protection even if it slows economic growth, while 49% believe the economy should take precedence.

Economic expedience defined the previous government. Lula inherited what Suely Araújo, policy coordinator at the Climate Observatory, a network of environmental and academic organizations, described as a “scorched-earth scenario,” with Brazil’s environmental oversight dismantled.

There’s been real progress, she said, and a large boost to funding for projects to cut planet-warming emissions through the Climate Fund, which is managed by Brazil’s development bank BNDES. Since Lula took office, there’s been 19 billion reais ($3.6 billion) in approved projects for renewable energy and forest restoration, compared to just 1.6 billion reais from 2019 to 2022 during Bolsonaro’s term.

Yet Lula’s environmental credentials are under attack at home. The Climate Observatory has sued the federal government over two controversial projects: a plan to open new offshore oil fields near the ecologically sensitive mouth of the Amazon River, and the paving of the 560 mile (900 kilometer) BR-319 highway cutting through largely untouched rainforest.

Despite his claim that Brazil can lead as a global example, he faces domestic skepticism. According to the AtlasIntel poll, 56% of Brazilians disapprove of Lula’s performance on environmental and climate issues, while 35% say he’s doing a good job.

“Lula has this ambiguity,” said political scientist Carlos Melo, coordinator of Insper Political Observatory. “At the same time he signals toward preservation, he does not compromise on a more accelerated pace of growth based on fossil energy.”

Lula’s environment minister, Marina Silva, upholds the banner of the government’s grand goals in the face of the president’s mixed record. “Obviously, we all live with contradictions, and these contradictions are being managed,” she told reporters in early October.

Since a major discovery in 2006, oil has come to sit at the heart of Brazil’s economy — a characteristic shared by the Azerbaijani and Emirati hosts of the most recent U.N. climate summits. Crude became the country’s top export for the first time in 2024. Daily production broke 4.3 million barrels per day for the first time in October. The chief executive officer of the state-owned oil giant known as Petrobras, Magda Chambriard, has echoed U.S. President Donald Trump’s “drill, baby, drill” slogan.

Most Brazilians do not oppose offshore oil drilling off the Amazon coast. According to the AtlasIntel survey, only 31% said Petrobras shouldn’t explore the region under any circumstances.

Lula has repeated that oil revenue from the Amazon will finance the shift to renewables and that Petrobras will eventually become an energy company, rather than focusing on fossil fuel. Araújo dismisses these claims. “The opening of new areas will take time, and we can’t wait 10 or 20 years to invest in the transition,” she said. “Oil production will only worsen the very problem the energy transition is meant to solve. It’s not even an environmental issue, it’s a matter of logic.”

It means an additional challenge for the success of climate talks in Belém, especially as the U.S. under Trump is withdrawing from the Paris Agreement and wars in Ukraine and Gaza have turned the world’s attention away from climate diplomacy. There’s a power vacuum that Lula might not be capable of filling.

“The world lives in a leadership crisis,” Melo said. “Brazil is relevant on the environmental front but it is not one of the most relevant political players.”

While Lula’s government touts its success in reducing deforestation, Brazil’s main source of greenhouse gas emissions, critics warn that these gains could unravel under any future administration aligned with Bolsonaro’s approach. Environmental activists want Lula’s government to secure any gains against the threat of reversals.

Beto Veríssimo of Imazon, a nonprofit based in Belém, calls for officially designating 63 million hectares (about 156 million acres) of unclassified public forests in the Amazon — an area roughly the size of Ukraine — as conservation units or indigenous territories. Without that, he warns, these lands will remain open to illegal deforestation and land grabbing.

Conservation needs to be backed by an economy that values standing forest. That can primarily be achieved by boosting the carbon market, Veríssimo added, since it’s the most viable alternative to cattle ranching, which has accounted for 90% of all deforestation in the Amazon over the past four decades. Working out these mechanisms is one of the questions perpetually hanging over COP talks.

“We have a problem of emissions and low productivity,” Veríssimo said. “Carbon [markets] can be a key part of the solution, bringing money to the Amazon at a time when Brazil itself can’t finance this transition on the scale required.”

Activists like Veríssimo have concluded that the BR-319 highway, which Lula promised to start paving next year, is an unstoppable project with strong backing from local politicians. That’s an indicator the balance of power still tilts toward the old economy of deforestation, which typically happens along roads.

“These two agendas are in direct competition,” Veríssimo said. “The government is concerned about deforestation and tries to tighten controls on one side, but infrastructure projects keep the pressure on the forest.”

Progress to rein in the impact from roadways has been slow. Lula’s government has pledged to make Brazilian beef fully traceable by 2032, a key measure to prevent cattle raised on deforested land from entering the supply chain. But the timeline is long, and another federal program meant to collect environmental data from farmers and ranchers remains voluntary.

“It’s very difficult for any government to box in the sector, given its political and economic clout,” said Marina Guyot, executive manager at Imaflora, a private sustainability group that recently launched its own deforestation-free beef certification.

While bowing to pressure from agribusiness and its allies in Congress, Lula’s government is advancing the goals of increasing protected areas and creating a new economy in the Amazon. Since 2022, his administration has set aside about 17 million hectares (about 42 million acres) — roughly the size of Florida — for the creation of protected areas, according to André Lima, secretary of deforestation control at the Ministry of the Environment and Climate Change.

Lima acknowledged that Brazil’s bioeconomy, based on resources that keep the forest standing, will not be fully consolidated within Lula’s four-year term. But signs of progress are already visible, with new technical assistance programs for forest restoration and the creation of targeted credit lines for green projects that Lima said increased “from millions to billions” with help from BNDES.

Agriculture Minister Carlos Favaro sees any contradictions as a sign of the government’s pluralism, often encouraged by Lula himself before he makes a decision. “It’s a fact that there are divergences within the government,” Favaro said in an interview in late October. “I’m not saying it’s a fight. I’m saying there are differences in position, and that’s healthy.”

Favaro argues that no country in the world is as advanced as Brazil when it comes to the energy transition. The main source of electricity in Brazil is hydropower, which accounts for more than half of total generation, according to data from the International Energy Agency. Solar and wind power have also grown over the past decade, while biofuels account for a third of the energy mix.“It’s not only the environment that matters,” Favaro said. “When we talk about sustainability, we also have to look at the economic and social sides.”

Within the government, the agriculture minister represents the sector that pollutes the most in Brazil. In anticipation of criticism from environmentalists during COP30, he is ready to flex the sector’s muscle.

“We are open to discussing the evolution of global livestock commitments,” Favaro said. “But no one comes here to bad-mouth Brazilian agribusiness and leaves without a response. I will be the one to stand guard over that.”

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(With assistance from Renata Carlos Daou, John Ainger and Peter Millard.)

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