Changing Climate in Brazil: Key Vulnerabilities and Opportunities

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.