Costs of Reducing Greenhouse Gas Emissions in Brazil

Angelo Gurgel and Sergey Paltsev

No 332232, Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project

Abstract: The Brazilian government has announced volunteer targets to reduce greenhouse gas (GHG) emissions during the 2009 COP meeting in Copenhagen and reassured them in Cancun (2010) and Durban (2011). In this paper we estimate the economic impacts from alternative policies to achieve such targets, including actions to cut emissions from deforestation and agricultural production. We employ a dynamicrecursive general equilibrium model of the world economy. The main results show that deforestation emissions in Brazil can be reduced at very low costs, but the costs of cutting emissions from agricultural and energy use may reach 2.3% loss in GDP by 2020 if sector specific carbon taxes are applied. Those costs may be reduced to 1.5% under a carbon trading scheme. The negative impacts of carbon taxes on agricultural production indirectly reduce deforestation rates. However, directly cutting emissions from deforestation is the most cost-effective option, since it does not negatively affect agricultural production, which still expands on lower yield and underutilized pasture and secondary forest areas.

Keywords: Environmental Economics and Policy; Resource/Energy Economics and Policy (search for similar items in EconPapers)
Pages: 24
Date: 2012
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https://ageconsearch.umn.edu/record/332232/files/5718.pdf (application/pdf)

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Working Paper: Costs of Reducing Greenhouse Gas Emissions in Brazil (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:pugtwp:332232

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