IMF Working Papers

Changing Climate in Brazil: Key Vulnerabilities and Opportunities

By Chen Chen, Koralai Kirabaeva, Christina Kolerus, Ian W.H. Parry, Nate Vernon-Lin

August 30, 2024

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Format: Chicago

Chen Chen, Koralai Kirabaeva, Christina Kolerus, Ian W.H. Parry, and Nate Vernon-Lin. Changing Climate in Brazil: Key Vulnerabilities and Opportunities, (USA: International Monetary Fund, 2024) accessed December 3, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

This paper assesses the Brazilian economy's exposure to climate change focusing on two key areas: agriculture and hydropower. While climate vulnerabilities are significant and recent patterns of land-use further amplify climate change risk, Brazil's opportunities for green growth are vast. Given geography and existing infrastructure, notably the very green energy mix, Brazil can boost its economic potential while mitigating a potential tradeoff between energy use, emissions, and growth. Policy options to address key vulnerabilities and leverage opportunities include boosting the Amazon's resilience via fiscal incentives for forest protection, investing in climate smart agriculture and insurance guided by sustainable feebates, continuing the diversification of renewable power generation, and stimulating green growth while greening the financial sector.

Subject: Agricultural sector, Climate change, Economic sectors, Environment, Renewable energy

Keywords: Adaptation, Agricultural sector, Carbon market, Climate change, Climate change risk, Climate strategy, Climate vulnerability, Deforestation, Feebate, Fiscal incentives, Global, Leverage opportunity, Mitigation potential, Power gap, Renewable energy

Publication Details

  • Pages:

    33

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2024/185

  • Stock No:

    WPIEA2024185

  • ISBN:

    9798400289361

  • ISSN:

    1018-5941

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