Tax incentives approved by the Brazilian government for transport, energy and farming are fueling higher CO2 emissions, according to a study released Tuesday.
Over the past decade, Brazil has reduced deforestation in its Amazon rainforest by 80 percent to drastically reduce its greenhouse gas emissions.
Tax incentives grew 69 percent a year in the past decade for the energy sector, 38 percent for agriculture and 18 percent for automobiles, it said.
And the ministry believes that CO2 emissions from the energy and agribusiness sectors, which both receive tax incentives, rose 41 percent and 24 percent respectively between 1995 and 2005, and 21 percent and five percent between 2005 and 2010.
It pointed to a similar link between the incentives and use of coal-based or gas-based thermoelectric plants.
In the huge farm sector, the report noted that while the government has moved to promote low-carbon agriculture, it has also pushed "tax exemptions in the importation and marketing of fertilizers."
It called for a gradual reorientation of tax incentives toward activities such as forest recovery, renewable energy, electric vehicles and low-emission public transport.
Explore further: S. Africa to introduce carbon tax from 2015