Brazil’s Economy and the Availability of Water

A friend of mine whose life’s work is analyzing the forces that shape the health of Brazil’s consumer economy sent me this short and quite bearish paper on the subject.

I respond:

Thanks; this is interesting.  However, from the standpoint of energy and the Brazilian economy, I would be thinking as follows:

• Hydroelectricity doesn’t really compete with the availability of potable water.  This is largely true of hydroelectric dams, and it’s even more clear in the case of run-of-river hydro, where a portion of a river’s water is redirected temporarily, and then allowed to rejoin the main flow almost immediately.

• The southern part of the country seems to have plenty of water, and that’s where almost all the energy demand is.

• Now, obviously, if the government is essentially anti-business and the entire economy is going to hell in a hand-basket, energy demand will fall, as will prices, providing a significant challenge to developers of energy generation projects.  However, many observers don’t seem convinced that this is truly the case.