The Impacts of the Brazilian NDC and their contribution to the Paris Agreement on Climate Change

Brazil has announced ambitious reduction in emissions in the Paris Agreement. The goal of this paper is measure the impacts of the mitigation strategies of the Brazilian National Determined Contributions (NDC). These strategies include emissions reduction from deforestation, low carbon emission practices in agriculture, energy efficiency and expansion of renewables energy sources. We adopt and employ the computable general equilibrium MIT EPPA model to measure the impacts of such strategies. We also simulate alternative carbon pricing scenarios considering sectoral carbon taxes able to force the same percentage reduction in emissions in each sector, and a broad carbon market (cap-and-trade). These alternative scenarios are set to achieve the overall country emissions target announced in the Paris Agreement. The results show that the Brazilian NDC would partially achieve the proposed emission target due to limitation in the measurements of emissions reduction in agriculture. Further efforts to reduce emissions after 2030 would require changes in the climate policy strategy in the country, since all the potential emissions reduction from deforestation would be finished and the capacity to expand renewables will be constrained. The economic costs of the Brazilian NDC is only 0.7% of the GDP in 2030. These results show the potential of relatively cheap reduction in emissions from land use changes and agriculture in the short run in the country, but the need for a quick turn in the climate policy strategy to some carbon pricing system in order to avoid high costs and losses in the country competitiveness.