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The impacts of the Brazilian NDC and their contribution to the Paris agreement on climate change

Published online by Cambridge University Press:  15 April 2019

Angelo C. Gurgel ,
Sergey Paltsev  and
Gustavo Velloso Breviglieri Open the ORCID record for Gustavo Velloso Breviglieri [Opens in a new window]
Angelo C. Gurgel*
Affiliation:
São Paulo School of Economics, Fundação Getulio Vargas, São Paulo, Brazil
Sergey Paltsev
Affiliation:
MIT Joint Program on the Science and Policy of Global Change, Cambridge, MA, USA
Gustavo Velloso Breviglieri
Affiliation:
Center for Sustainability Studies, Business Administration School of São Paulo, Fundação Getulio Vargas, São Paulo, Brazil
*
*Corresponding author. E-mail: angelo.gurgel@fgv.br
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Abstract

This paper measures the economic impacts of Brazil's climate mitigation strategies contained in its Nationally Determined Contribution (NDC). To do so, we employ the computable general equilibrium MIT Economic Projection and Policy Analysis model and simulate alternative carbon pricing scenarios (sectoral versus economy-wide carbon markets), set to achieve the country's overall emissions targets announced under the Paris Agreement. The results show relatively cheap emissions reductions from land-use changes and agriculture in the short run: the cost of the Brazilian NDC is predicted to be only 0.7 per cent of GDP in 2030. Further efforts to reduce carbon emissions beyond 2030 would require policy changes, since all the potential emissions reductions from deforestation would be finished and the capacity to expand renewable energy sources would be constrained. In this case, an economy-wide carbon pricing system would help substantially to avoid higher compliance costs.

Keywords

Brazilcarbon pricingclimate policycomputable general equilibriumParis agreement
Type
Research Article
Information
Environment and Development Economics , Volume 24 , Issue 4 , August 2019 , pp. 395 - 412
Copyright
Copyright © Cambridge University Press 2019 

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