Industrial low carbon futures: A regional marginal abatement cost curve for Sao Paulo, Brazil

Sub-national and regional greenhouse gas (GHG) mitigation policies are being stimulated by the Paris Agreement. Several low carbon studies have been conducted for important emitters such as California State in the US and Chinese provinces. At the same time, carbon mitigation studies have focused on the industrial sector, especially in developing countries. In comparison to the national scenario, the Sao Paulo state in Brazil shows a distinct emission profile. The industry in Sao Paulo is responsible for 14.7% of the total emissions, and this share increases to 31.5% considering energy indirect emissions. Therefore, Sao Paulo mitigation efforts depend on industry's leadership such as in other parts of the world. The present study has evaluated the Sao Paulo state's industry mitigation potential between 2014 and 2030 based on a Marginal Abatement Cost (MAC) curve. In contrast to previous MAC studies, the MAC-SP study has also considered cement related emissions released outside its jurisdictions but that are driven by industrial choices within its boundary. Nine out of seventeen technologies show a negative MAC value, and energy efficiency technologies yield the lowest cost with a weighted average value of -$122/metric ton of CO2. Considering only the territorial based approach, the Sao Paulo state's Industry would avoid 78.4 million metric ton of CO2 until 2030. Although emissions under Sao Paulo's responsibility increase 27%, if the consumption-based approach is adopted, the assessed mitigation potential enhances 83% and entails US$ 2.3 billion savings until 2030. In conclusion, the mitigation potential for São Paulo state's industry is sizeable and consumption-based strategies are worthwhile, especially when regional policies are considered. Results can assist in formulating climate change policies and innovative incentive mechanisms to maximize the regional mitigation potential.