Assessment of issues related to international trade and environmental impacts (emissions): an analysis for Brazil

This study is aimed at evaluating the impacts of the Brazilian trade structure on the amount of emissions, that is, at identifying the main trade links of Brazil in terms of CO2 emissions. We have considered two simulations through a global computable general equilibrium model - GTAP-E, calibrated with 2011 data. The first simulation specifies an incentive of 10% in the form of subsidies to Brazil's world exports to all sectors and regions. Analogously, the second simulation specifies a reduction of 10% in import tariffs for all sectors and regions of Brazil. The main results indicate that incentives to exports and imports would increase the emissions in Brazil and in most other regions. Firstly, because of the increase in the economic activity level of those sectors that use energy products more intensely as intermediate inputs, such as the transport sector. Secondly, because of the relative cheapness of foreign products, which would facilitate the purchase of energy inputs by Brazil. The main CO2 emission channels of the Brazilian international trade are with the rest of Europe and Argentina.