Climate policy scenarios in Brazil: A multi-model comparison for energy

Abstract

a b s t r a c t Available online xxxx JEL classification: H23 C88 Q40 Q54 C61 C63 C68 O57 Keywords: Climate policy Low-carbon energy scenarios Mitigation alternatives BrazilThis paper assesses the effects of market-based mechanisms and carbon emission restrictions on the Brazilian energy system by comparing the results of six different energy-economic or integrated assessment models under different scenarios for carbon taxes and abatement targets up to 2050. Results show an increase over time in emissions in the baseline scenarios due, largely, to higher penetration of natural gas and coal. Climate policy scenarios, however, indicate that such a pathway can be avoided. While taxes up to 32 US$/tCO 2 e do not significantly reduce emissions, higher taxes (from 50 US$/tCO 2 e in 2020 to 162US$/tCO 2 e in 2050) induce average emission reductions around 60% when compared to the baseline. Emission constraint scenarios yield even lower reductions in most models. Emission reductions are mostly due to lower energy consumption, increased penetration of renewable energy (especially biomass and wind) and of carbon capture and storage technologies for fossil and/or biomass fuels. This paper also provides a discussion of specific issues related to mitigation alternatives in Brazil. The range of mitigation options resulting from the model runs generally falls within the limits found for specific energy sources in the country, although infrastructure investments and technology improvements are needed for the projected mitigation scenarios to achieve actual feasibility.

Energy technology roll-out for climate change mitigation: A multi-model study for Latin America

“…This uncertainty in the energy system transformation process yields important implications for the public sector: except when local circumstances so dictate, for instance because of a lack of certain energy resources at the national level or because of policies driven by local priorities, policy makers may not necessarily want to pick winners today, since we do not (yet) know in all countries what the optimal or most cost-effective GHG emissions abatement technology is (see e.g. the studies in this special issue on the specific cases of Argentina, Brazil, Colombia and Mexico, by Di Sbroiavacca et al, 2016;Lucena et al, 2016;Calderon et al, 2016;respectively Veysey et al, 2016). Important though is to implement stringent policies that can stimulate the market to decide which emission reduction and technology deployment path to optimally take given locally pertaining circumstances.…”

“…This is particularly true for several rapidly growing economies in Latin America, since some of these countries have just embarked on an important mission to gradually decarbonize their national energy infrastructures. Particularly interesting in this respect are economies, such as those of Brazil and Colombia, that so far have managed to remain relatively low-carbon despite substantial economic growth (largely as a result of the large-scale use of hydropower), but whose challenge henceforth is to avoid the risk of going fossil, stay low-carbon or even further reduce their carbon intensity under continued socio-economic progress (see Lucena et al, 2016respectively Calderon et al, 2016. Subjects abound that are yet to be explored by integrated assessment models like ours.…”

“…the type of energy technologies deployed; we find that a comparison between the two yields little additional insight for the ways in which climate change mitigation can be implemented, so that we only show results for the former in one instance and restrict ourselves to inspecting the High CO 2 price scenario in all other cases. The Low CO 2 price scenario yields a CO 2 emission pathway that is only somewhat (typically around 10%) below the one we find for the Core baseline scenario (while the technology mix and diffusion trends remain largely unaltered), which constitutes another reason for leaving a more detailed inspection of the Low CO 2 price scenario to several of the country-specific papers in this special issue (that includes studies on Argentina (Di Sbroiavacca et al, 2016), Brazil (Lucena et al, 2016), Colombia (Calderon et al, 2016) and Mexico (Veysey et al, 2016) The characteristics of the models we use determine to significant extent the nature of their outcome. In Table 1 we therefore summarize the main features, representations and assumptions of the six models employed in our cross-model comparison study, in an attempt to clarify some of our findings.…”

“…However, the remaining unexplored sites are located in the Amazon region and thus face large local environmental constraints, which may hamper hydropower expansion in the country (see e.g. Lucena et al, 2016). Among this large overall potential in Latin America, particular opportunities exist for small-to medium-scale hydropower plants (that today already account for over 10% of all operational hydropower capacity).…”

“…For GCAM emissions dive deeply from the beginning, which results particularly from the large presumed potential for the implementation of CCS technology in combination with both fossil fuels and biomass. For the specific case of Brazil these large emission reductions are mostly achieved through BioCCS, that is, biomass used as feedstock in power plants that are equipped with CCS (see Lucena et al, 2016). Fig.…”