A sustained economic growth with low environmental hazards is a major challenge for modern society, Abating CO2 gas emissions together with the rational uses of energy from clean sources is recognized as a priority worldwide, In this connection, this paper focuses on the possibilities for stimulating and expanding the production of fuel alcohol from sugarcane and the generation of thermoelectricity from bagasse, in the context of Activities Implemented Jointly. A methodology for calculating the CO2 abatement costs in different scenarios for the use of fuel alcohol and bagasse is presented, The base scenario is constructed starting from an estimate of the motor vehicle fleet run on gasoline and on fuel alcohol, It is assumed the decreasing of alcohol vehicle fleet, as it happens now and a blend of gasoline with only 10 \% of anhydrous alcohol, So, it is calculated the consumption of gasoline and alcohol up to the time horizon at the year 2010, as well as the total fuel costs using different hypothesis for the oil price. The alcohol cost is taken as constant in dollars of 1993 and equal to its value just before the overvalorization of the exchange rate between the Brazilian currency (Real-R\$) and the US\$, it is assumed that this exchange rate will probably be changed in the next Sears. It is considered in the base scenario alternatives of electricity expansion using coal, fuel oil and natural gas, The carbon emissions and thermoelectricity generation are obtained in two scenarios for abating CO2 emissions by alcohol vehicle fleet besides the use of a blend of gasoline and 22 \% alcohol, as well as by implementing electricity generation with sugar cane bagasse, It is calculated the planted area with sugar cane to meet the alcohol and bagasse demand in each scenario,The abatement costs in the different scenarios, taking as reference the base scenario, is calculated, The main conclusion is that the abatement cost decreases along the time and with the increase of CO2 abatement, reaching a value lower than US\$ 10 t(-1) CO2 in the year 2010. (C) 1998 Published by Elsevier Science Ltd.