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Costs of reducing GHG emissions in Brazil

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  • Angelo Costa Gurgel
  • Sergey Paltsev

Abstract

During the 2009 Conference of the Parties meeting in Copenhagen, the Brazilian government announced voluntary targets to reduce GHG emissions, with the targets being reconfirmed in Cancun (2010) and in Durban (2011). An estimate is presented of the economic impact of alternative policies to achieve such targets, including actions to cut emissions from deforestation and agricultural production. A dynamic-recursive general equilibrium model of the world economy is used. The main results show that deforestation emissions in Brazil can be reduced at very low costs, but the cost of cutting emissions from agriculture and energy use may lead to a 2.3% drop in gross domestic product by 2020 if sector-specific carbon taxes are applied. Such costs may be reduced to 1.5% under a carbon trading scheme. The negative impact of carbon taxes on agricultural production indirectly reduces deforestation rates; therefore, directly cutting emissions from deforestation is the most cost-effective option since it does not adversely affect agricultural production, which continues to expand into low-yield, underutilized pastures and secondary forest areas.

Suggested Citation

  • Angelo Costa Gurgel & Sergey Paltsev, 2014. "Costs of reducing GHG emissions in Brazil," Climate Policy, Taylor & Francis Journals, vol. 14(2), pages 209-223, March.
    • Handle: RePEc:taf:tcpoxx:v:14:y:2014:i:2:p:209-223
    DOI: 10.1080/14693062.2013.835655
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    1. SERGEY PALTSEV & JOHN M. Reilly & HENRY D. JACOBY & ANGELO C. GURGEL & GILBERT E. METCALF & ANDREI P. SOKOLOV & JENNIFER F. HOLAK, 2008. "Assessment of US GHG cap-and-trade proposals," Climate Policy, Taylor & Francis Journals, vol. 8(4), pages 395-420, July.
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    Cited by:

    1. Octaviano, Claudia & Paltsev, Sergey & Gurgel, Angelo Costa, 2016. "Climate change policy in Brazil and Mexico: Results from the MIT EPPA model," Energy Economics, Elsevier, vol. 56(C), pages 600-614.
    2. Diniz Oliveira, Thais & Costa Gurgel, Angelo & Tonry, Steve, 2021. "Potential trading partners of a brazilian emissions trading scheme: The effects of linking with a developed region (Europe) and two developing regions (Latin America and China)," Technological Forecasting and Social Change, Elsevier, vol. 171(C).
    3. Sergey Paltsev & Pantelis Capros, 2013. "Cost Concepts For Climate Change Mitigation," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 4(supp0), pages 1-26.
    4. Diniz Oliveira, Thais & Gurgel, Angelo & Tonry, Steve, 2018. "The Effects for Brazil of Linking Emissions Trading Schemes in the context of the Heterogeneity of Trading Partners," Conference papers 332951, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    5. da Silva Freitas, Lucio Flavio & de Santana Ribeiro, Luiz Carlos & de Souza, Kênia Barreiro & Hewings, Geoffrey John Dennis, 2016. "The distributional effects of emissions taxation in Brazil and their implications for climate policy," Energy Economics, Elsevier, vol. 59(C), pages 37-44.
    6. do Nascimento Nadruz, Veronica & Lucia Casteli Figueiredo Gallardo, Amarilis & Montaño, Marcelo & Ramos, Heidy Rodriguez & Ruiz, Mauro Silva, 2018. "Identifying the missing link between climate change policies and sectoral/regional planning supported by Strategic Environmental Assessment in emergent economies: Lessons from Brazil," Renewable and Sustainable Energy Reviews, Elsevier, vol. 88(C), pages 46-53.
    7. Alvim, Augusto & Sanguinet, Eduardo, 2020. "Paris Agreement on Climate Change and the Possible Impacts on Brazilian Meat and Dairy Sectors," Conference papers 333147, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    8. Julien Lefevre, 2016. "A description of the IMACLIM-BR model: a modeling framework to assess climate and energy policy in Brazil [Une description du modèle IMACLIM-BR: un outil de modélisation pour évaluer les politiques," Working Papers hal-01685947, HAL.
    9. Angelo Costa Gurgel & Claudia Octaviano & Sergey Paltsev, 2016. "Climate Change Policy In Brazil And Mexico: How Similar Are The Impacts And Solutions?," Anais do XLII Encontro Nacional de Economia [Proceedings of the 42nd Brazilian Economics Meeting] 195, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    10. William Wills & Emilio Lebre La Rovere & Carolina Grottera & Giovanna Ferrazzo Naspolini & Gaëlle Le Treut & F. Ghersi & Julien Lefèvre & Carolina Burle Schmidt Dubeux, 2022. "Economic and social effectiveness of carbon pricing schemes to meet Brazilian NDC targets," Post-Print hal-03500923, HAL.
    11. Diniz Oliveira, Thais & Costa Gurgel, Angelo & Tonry, Steve, 2019. "International market mechanisms under the Paris Agreement: A cooperation between Brazil and Europe," Energy Policy, Elsevier, vol. 129(C), pages 397-409.
    12. Garaffa, Rafael & Cunha, Bruno S.L. & Cruz, Talita & Bezerra, Paula & Lucena, André F.P. & Gurgel, Angelo C., 2021. "Distributional effects of carbon pricing in Brazil under the Paris Agreement," Energy Economics, Elsevier, vol. 101(C).

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