Beyond Fossil Fuels: Fiscal Transition in BRICS

Among the BRICS economies, Brazil is least dependent on fossil fuels due to the high share of biofuels and hydropower in its energy mix (see Annex A in the main report). [...] The role of the fossil fuel sector in the economy. [...] Taxes and other fees on fossil fuel production and consumption generate 6.6 per cent of the general government revenue (i.e., the joint budget of the federal government, regions, municipalities, social security and other government-managed funds), with the majority of that revenue coming from fossil fuel consumption (see Table 1 in this country brief). [...] The Brazilian government’s tax and non-tax revenue from fossil fuel production were at 0.8 per cent of the GDP or 2.75 per cent of the general government budget (see Figure 1 and Table 1 in this brief). [...] As part of its global exercise, the International Monetary Fund (IMF) estimated the value of under-taxing fossil fuel consumption in Brazil in 2017 at USD 11 billion in terms of climate change effects1 and USD 9.5 billion in terms of air pollution impacts on human health (Coady, Parry, Nghia-Piotr, & Shang, 2019; IMF, 2018).