This study aims to identify and discuss the main issues and uncertainties affecting electricity demand and supply in Brazil, and their consequent environmental burdens, over the period to the year 2020. It does so in the framework of two policy scenarios to test economic and environmental policy measures against a business as usual projection, which assumes energy policies existing in Brazil today remain in place and that no new major policies are adopted to reduce energy-related GHG emissions. It provides results from an analysis using a linear programming model that simulated scenarios through changes in emissions fees and caps, costs for technologies (including clean energy supplies) and demand side efficiency, to determine least-cost combinations of power supply technologies that meet projected power demand. Results show that electricity demand in Brazil will continue to grow vigorously over the next two decades, and that the institutional reforms under way in the domestic power sector have the potential to affect the future electric power technology choices to meet this rising demand. Also, the analysis suggests that, depending on how priorities are set, some conflict between local atmospheric pollution problems and global climate change issues may arise.