Beyond Fossil Fuels: Fiscal Transition in BRICS

Brazil's economy is influenced by significant fossil fuel reserves, particularly 'pre-salt' oil, though it is the least dependent on fossil fuels among BRICS nations due to biofuels and hydropower. In 2017, fossil fuel revenues accounted for 6.8% of general government revenue, while subsidies represented 0.3% of GDP. The government continues to seek increased oil and gas production despite climate commitments to reduce greenhouse gas emissions by 43% by 2030. Fiscal complexities include high state-level VAT on fuels, significant tax exemptions for production, and the earmarking of royalties for health and education.

• Brazil possesses fossil fuel reserves totaling approximately 16.5 GtCO2 if extracted, consisting of 10.9 GtCO2 of coal, 4.9 GtCO2 of oil, and 0.8 GtCO2 of natural gas.
• In 2017, fossil fuel revenues contributed 6.8% of general government revenue, with consumption taxes providing 4.1% and production revenues providing 2.8%.
• The Brazilian government's fiscal position is impacted by fossil fuel subsidies, which the OECD estimated at 0.3% of GDP or 1.1% of general government revenue in 2017.
• Brazil's climate targets include a relative reduction in fossil fuel energy use and an absolute reduction of greenhouse gas emissions by 43% by 2030 compared to 2005 levels.
• The state-owned company Petrobras, 64% owned by the government, faces risks from asset stranding and is tied to oil production requirements due to loans from the China Development Bank repaid in oil shipments.
• Fiscal revenues from oil and gas royalties are earmarked for social spending, with 75% allocated to education and 25% to health care, though recent legislative moves may divert these funds toward pipeline production.

APA

Kühne, K., & Roth, J. (2019). Beyond Fossil Fuels: Fiscal Transition in BRICS. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/beyond-fossil-fuels-brazil.pdf

Chicago

Kühne, Kjell, and Joachim Roth. Beyond Fossil Fuels: Fiscal Transition in BRICS. International Institute for Sustainable Development, 2019. https://www.iisd.org/system/files/publications/beyond-fossil-fuels-brazil.pdf.

Wikipedia

{{cite report |last1=Kühne |first1=Kjell |last2=Roth |first2=Joachim |title=Beyond Fossil Fuels: Fiscal Transition in BRICS |publisher=International Institute for Sustainable Development |date=November 2019 |url=https://www.iisd.org/system/files/publications/beyond-fossil-fuels-brazil.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{khne2019beyond, author = {Kühne, Kjell and Roth, Joachim}, title = {{Beyond Fossil Fuels: Fiscal Transition in BRICS}}, institution = {International Institute for Sustainable Development}, year = {2019}, month = nov, url = {https://www.iisd.org/system/files/publications/beyond-fossil-fuels-brazil.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }