Replacement of fossil fuels by ethanol and biodiesel in Brazil and their economic impacts: an evaluation of the "Plano Nacional de Energia 2030"

Abstract

In this paper a computable general equilibrium model of Brazil tailored for inter-regional and greenhouse gases (GHG) emissions analysis is used to approach the economic effects arising from substitution of fossil fuels by ethanol and biodiesel in the Brazilian economy, as projected by the National Plan of Energy (PNE) 2030. Results point to positive economic effects arising from that substitution, both at national and regional levels. A reduction in regional economic activity concentration is observed, as well as reductions in GHG emissions and positive distributive effects, with increase in the poorest households incomes.