The use of alternative fuels to mitigate climate change impacts in the transportation sector in Rio de Janeiro, Brazil

This paper assesses how increased use of alternative fuels (ethanol and electricity) contributes to reduce carbon dioxide (CO2) emissions of light-duty vehicles in Rio Janeiro state (RJ), Brazil, a region of a developing country – most such analysis focus at the aggregate country level. Using an energy systems model (OSeMOSYS), we analyze scenarios that consider an improvement in the quality of the ethanol (in gCO2eq/MJ) consumed in RJ due to the development of the RenovaBio program, greater uptake of electric vehicles, carbon pricing, and a combination of these policies. We also analyze a scenario with the new RenovaBio targets, which the Brazilian government scaled down because of the COVID-19 pandemic. We find that electric vehicles are the most cost-effective policy to reduce CO2 emissions (by 1.9%) when no carbon pricing is considered. When it is, however, CO2 emissions are reduced the most (between 47% and 56%), regardless of the vehicle technology being used, but it is the costlier policy (between 5.4% and 15.3%). In scenarios with carbon pricing, flex-fuel vehicles switch to ethanol, an important result for a region where this technology already dominates the vehicle fleet. Greater uptake of electric vehicles leads to lower overall transportation costs (by 2.5%), but when a CO2 price is considered, because the electricity system still relies on fossil fuels, the reduction in CO2 emissions is compromised. In such a setting, increased ethanol quality reduces carbon emissions more than electric vehicle adoption (by 16%). The RenovaBio targets’ reduction due to the COVID-19 pandemic, however, jeopardizes this result. Such findings convey important evidence to policymakers and the research community: decarbonization of transportation in a region of a developing country, where economic resources are scarcer, can start before electric vehicles become affordable by increasing and maintaining continued access to lower-carbon fuels.