What Lula's win in Brazil means on a global scale

This past weekend marked the end of a contentious clash for Brazil's highest office, as President Jair Bolsonaro lost his re-election bid to challenger Luiz Inácio Lula da Silva, making him the first incumbent president to be ousted in decades.

The election marks a drastic shift in political ideology and power within the Brazilian presidency, with voters rebuking Bolsonaro, a far-right populist, in favor of leftist icon and union leader Lula. When he takes office this January, Lula's presidency — as antithetical to Bolsonaro's as possible — will likely create lasting impacts in Brazil.

However, Lula's victory could have a lasting legacy far beyond Brazil and South America. What does the election of Lula in one of the world's foremost emerging powers signal for the United States and the rest of the world?

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What impact will Lula's victory have on the global environment?

This will not be Lula's first stint as president. He previously held the office from 2003 to 2010, and throughout that time, he made the environment one of his key policy issues. Much of what Lula focused on during his tenure revolved around one of Brazil's — and the world's — ongoing environmental crises: The destruction of the Amazon rainforest.

It's no secret that the Amazon rainforest is dying, due to a combination of factors including deforestation, climate change, and wildfires. The World Wildlife Fund estimates that 27 percent of the rainforest could be barren of trees by 2030. Given that the Amazon produces significant levels of oxygen while also absorbing Earth-warming carbon dioxide, this continued destruction could have drastic consequences for global warming, as well as the diverse animal kingdom living within its biome.

However, Lula has pledged to put forth similar climate initiatives, in an attempt to walk back the ramp-up of deforestation that has occurred under Bolsonaro. One environmental analysis showed that Bolsonaro's loss could potentially cut deforestation of the Amazon by 89 percent.

In what NBC News called a "major victory in the fight against climate change," the outlet noted Lula has rolled out a platform to crack down on illegal ranchers, miners, and loggers that have significantly contributed to deforestation. These efforts to save the Amazon could have a positive domino effect not only for South America, but for the worldwide fight to reduce global warming and help biodiversity thrive. Lula also pledged to stay within the goals of the Paris Climate Agreement, which aims to reduce the overall trend of global warming.

"Brazil is ready to resume its leading role in the fight against the climate crisis," Lula said in his victory speech, The New York Times reported.

How will Lula look to hold up Brazil's slipping democracy?

Under Bolsonaro's leadership, there have been reported symptoms of democratic backsliding seen throughout the country. A 2021 report from the Carnegie Endowment for International Peace wrote, "Although Brazil's democracy had already been at risk prior to the pandemic ... the heightened polarization and growing inequality in 2020 have made the country's democratic institutions even more vulnerable to the authoritarian threat posed by Bolsonaro and his followers."

The far-right president is just one leader among many nations where authoritarianism has been rearing up. However, with Lula's victory, the president-elect, similar to his environmental agenda, will have the chance to change this going forward, and reiterate Brazil's standing as one of the premier powers within the southern hemisphere. As Axios noted, Lula's victory now means all of Latin America's largest countries — and, by association, their economies — will now be helmed by leftist leaders.

While his efforts to cleanse the environment will likely help Brazil's standing on the world stage, Lula has also notably pledged to help his nation preserve its democracy. The Washington Post reported Lula will likely be among the leaders of a slew of countries that have seen shifts to leftist ideals in the past few years, including Peru, Chile, and Colombia. With so much of the region under these left-leaning governments, there are likely to be significant geopolitical outcomes.

Lula will also likely have a far different view of foreign policy than his predecessor, the Post reported. The outlet said this is likely to include initiatives similar to Lula's initial stint as president, such as positioning Brazil as the champion of the regional economy.

How will Lula's presidency affect the global economy?

Lula's win will likely also mark a shift in the Brazilian economy, which, in turn, will affect markets around the world. The soon-to-be president is no stranger to economic booms, as Time noted his two previous terms were marked by a slate of progressive programs that "lifted millions out of poverty and transformed life for the country's Black majority and Indigenous minority." Lula's initial tenure also achieved growth in a variety of economic sectors, including soy, steel, and natural gas.

Lula is likely to push once again to create a similarly thriving economy, and this time around, he will be at the helm of a country that has seen a major rise in its global economic impact since he left office. Brazil has the world's 12th-largest economy, according to Investopedia, with a GDP even higher than advanced Western countries such as Australia and Ireland. While the nation went through a crippling recession in the late 2010s which continues to hurt its economic standing, it remains a global leader in major industries, natural resources, and agriculture.

As such, any decisions Lula makes to jumpstart the Brazilian economy could have a ripple effect across international markets. One of his main challenges will likely be getting congressional approval for the pricy programs he is looking to implement at home. Having campaigned on minimum wage boosts and cash transfers for the impoverished, his platform could cost an estimated US$27 billion, Bloomberg reported. The outlet noted that with the U.S. Federal Reserve and other world banks raising interest rates, borrowing money is costlier than ever, especially with Brazil already facing significant national debt.

If Lula is able to get the proper financing for his agenda, though, it could provide a boost to the stagnating Brazilian economy that could help the country become an even greater leader on the world stage.