Resource information
The overall impacts on the Brazilian
economy of reducing CO2 emissions from energy use and
industrial processes can be assessed using a recursive
dynamic general equilibrium model and a hypothetical carbon
tax. The study projects that in 2040 under a
business-as-usual scenario, CO2 emissions from energy use
and industrial processes would be almost three times as high
as in 2010 and would account for more than half of total
national CO2 emissions. Current policy aims to reduce
deforestation by 70 percent by 2017 and emissions intensity
of the overall economy by 36-39 percent by 2020. If policy
is implemented as planned and continued to 2040, CO2
emissions from energy use and industrial processes would not
have to be cut until 2035 as reductions of emissions through
controlling deforestation would be enough to meet emission
targets. The study also finds evidence that supports the
double dividend hypothesis: using revenue from a
hypothetical carbon tax to finance a cut in labor income tax
significantly lowers the gross domestic product impacts of
the carbon tax. Using carbon tax revenue to subsidize wind
power can effectively increase the output of wind power in
the country, although the impact of the tax on gross
domestic product would be somewhat increased.
