sectoral economic costs and benefits of ghg mitigation - IPCC

José R Moreira
The results indicate that, for early part of the program, ethanol production in the new autonomous
distilleries was an extremely costly alternative to imported oil. However, with the social costs of
ethanol decreasing over the period and the high oil prices in the early to mid 1980s ethanol
became an efficient alternative to gasoline during 1983-1985 for autonomous distilleries and
between 1980-1985 for annexed ones.
Figure 1
Net Social Benefit of Ethanol Production – Center South
300
200
100
MILLION OF CURRENT US$
0
-100
-200
-300
-400
1978 1979 1980 1981 1982 1983 1984 1985 1986 1987
Millions of Current US$
-500
-600
-700
-800
YEAR
Source: Rask, 1995
Table 3 Regional and Total Social Gains to Ethanol Production in Brazil: 1978-1987
Annual Totals and 1987 Net Present Value (NPV)
Center-South North-Northeast Brazilian Total 1987 NPV
Region
Region
for Brazil*
Year (1) (2) (1) + (2)
1978 -215.16 -61.23 -276.39 -766.46
1979 -375.23 -106.99 -482.22 -1,193.88
1980 63.91 -116.26 -52.35 -115.72
1981 -59.98 -245.52 -305.50 -603.00
1982 34.25 -321.81 -287.56 -506.79
1983 287.48 -152.37 135.11 212.60
1984 213.12 -165.94 47.18 66.29
1985 77.76 -224.43 -146.67 -183.99
1986 -678.28 -481.47 -1,159.75 -1,298.92
1987 -337.44 -594.66 -932.10 -932.11
TOTAL -989.57 -2,470.68 -3,460.25 -5,322.07
NOTE: All values are in millions of 1987 US$.
* The net present value (NPV) of benefits is calculated with a 12% social discount rate.
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