Developing Green: A Case for the Brazilian Manufacturing Industry

Camila Gramkow and Annela Anger-Kraavi
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Camila Gramkow: United Nations Economic Commission for Latin America and the Caribbean, Brasília, DF 70076-900, Brazil
Annela Anger-Kraavi: University of Cambridge, Cambridge CB2 1TN, UK

Sustainability, 2019, vol. 11, issue 23, 1-16

Abstract: The recent IPCC Special Report on global warming of 1.5 °C emphasizes that rapid action to reduce greenhouse gas (GHG) emissions is vital to achieving the climate mitigation goals of the Paris Agreement. The most-needed substantial upscaling of investments in GHG mitigation options in all sectors, and particularly in manufacturing sectors, can be an opportunity for a green economic development leap in developing countries. Here, we use the Brazilian manufacturing sectors as an example to explore a transformation of its economy while contributing to the Paris targets. Projections of Brazil’s economic futures with and without a portfolio of fiscal policies to induce low carbon investments are produced up to 2030 (end year of Brazil’s Nationally Determined Contribution—NDC), by employing the large-scale macro econometric Energy-Environment-Economy Model, E3ME. Our findings highlight that the correct mix of green stimulus can help modernize and decarbonize the Brazilian manufacturing sectors and allow the country’s economy to grow faster (by up to 0.42% compared to baseline) while its carbon dioxide (CO 2 ) emissions decline (by up to 14.5% in relation to baseline). Investment levels increase, thereby strengthening exports’ competitiveness and alleviating external constraints to long-term economic growth in net terms.

Keywords: climate change macroeconomics; fiscal policy; sustainable economic development (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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