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Overcoming the financial barrier to a low emission development strategy in Brazil

E. L. La Rovere, C.Grottera and W.Wills

International Economics, 2018, issue 155, 61-68

Abstract: This paper presents two low GHG emission scenarios for Brazil up to 2050, and discusses the impact in the implementation of a deep decarbonization scenario of a financial device allowing for decreasing capital costs of mitigation investments. Specifically, we consider (i) a governmental plan scenario assuming the achievement of NDC targets up to 2030 and the extension of current policies up to 2050; and (ii) a deep decarbonization scenario leading to a national GHG emission pathway compatible with an international effort targeted to stabilize the global temperature at 1.5?°C above pre-industrial levels. We present a comparative analysis of the scenario results for key economic and social indicators, and simulate the adoption of a new financial device allowing to decrease capital costs of low carbon investments in Brazil. Our conclusions highlight the potential of innovative financial mechanisms to foster the transition to a low carbon society in developing countries, as illustrated in the case of Brazil.

Keywords: Climate change mitigation; Low emission development strategies; Deep decarbonization; Climate finance; Innovative financial devices; Brazil (search for similar items in EconPapers)
JEL-codes: Q54 P45 P18 P43 Q43 (search for similar items in EconPapers)
Date: 2018
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Handle: RePEc:cii:cepiie:2018-q3-155-7