GTAP Resources: Resource Display
| GTAP Resource #7748 |
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"Economic and Environmental Trade-offs of Sustainable Fuel Policies in Brazil" by Domingues, Edson, Guilherme Perobelli, Gustavo Luz and Aline Magalhaes Abstract This article evaluates the economic and environmental impacts of Brazil’s Fuel of the Future Law using a recursive-dynamic Computable General Equilibrium (CGE) model calibrated to Brazil’s 2015 System of National Accounts. The law mandates a progressive increase in biofuel blending rates — raising the ethanol share in gasoline from 27% to 35% and the biodiesel share in diesel to 20% by 2030 — and is simulated against a business-as-usual baseline over 2025–2030. Results indicate moderate but consistent macroeconomic costs: GDP falls by -0.3%, investment by -0.8%, household consumption by -0.4%, and employment by -0.1% relative to the baseline, driven by fuel price increases of 9.0% for blended gasoline and 5.3% for blended diesel. On the environmental side, the policy delivers a -1.7% reduction in greenhouse gas emissions and a -1.4% decline in the emissions-to-GDP ratio, but generates significant indirect land-use change, with cropland expanding by 2.1 million hectares — including approximately 463 thousand hectares of native forest loss. The findings underscore a fundamental trade-off: meaningful environmental gains come at the cost of reduced economic activity, higher fuel and food prices, and substantial pressures on native land cover. |
| Resource Details () | GTAP Keywords | ||||||||||||||||
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- Climate change policy - Environmental policies - Land use - Domestic policy analysis - Transportation - Dynamic modeling - South America |
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If you have trouble accessing any of the attachments below due to disability, please contact the authors listed above.
Public Access  GTAP Resource 7748 (382.2 KB) Replicated: 0 time(s)Restricted Access No documents have been attached. Special Instructions No instructions have been specified. |
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Last Modified: 4/13/2026 1:32:49 PM
