Reaching Brazil’s National Determined Contributions: An Assessment of the Key Transitions in Final Demand and Employment

Brazil has voluntarily achieved significant advances in climate mitigation by reducing its greenhouse gas (GHG) emissions in the last decade. Additionally, Brazil commits to further pursue its action through its National Determined Contributions (NDC), issued during the Paris Agreement. In parallel, Brazil anticipates a significant increase in GDP in the meantime making the intended reduction in GHG more challenging. The mix of economic growth and low-carbon objectives entails multidimensional socioeconomic challenges. Using Brazil’s industrial structure and its interdependence, we evaluate the minimal changes in final demand that are needed to achieve their NDC. We further study the impacts that such changes could cause to the employment by industry in the country. Our results show that the economic activities are currently oriented toward CO2 intensive growth. We further show that breaking this trend together with poli- cies to incentivize a service-oriented economy are necessary conditions to strengthen employment in a Brazilian economy compatible with its NDC.