Hostname: page-component-cd9895bd7-dzt6s Total loading time: 0 Render date: 2024-12-23T15:22:34.614Z Has data issue: false hasContentIssue false
  • English
  • Français

Carbon emissions reduction strategies and poverty alleviation in India*

Published online by Cambridge University Press:  01 June 2009

VIJAY P. OJHA
VIJAY P. OJHA*
Affiliation:
Shri Ram College of Commerce, University of Delhi, Delhi – 110007, India. Email: [email protected]
Get access Rights & Permissions [Opens in a new window]

Abstract

This paper, based on a computable general equilibrium model of the Indian economy, shows that a domestic carbon tax policy that recycles carbon tax revenues to households imposes heavy costs in terms of lower economic growth and higher poverty. However, the decline in economic growth and rise in poverty can be minimized if the emissions restriction target is modest, and carbon tax revenues are transferred exclusively to the poor. India's participation in an internationally tradable emission permits regime with grandfathered emissions allocation is preferable to any domestic carbon tax option, provided the world market price of emission permits remains low. Even better would be if India participated in a global system of tradable emission permits with equal per capita emission entitlements. India would then be able to use the revenues garnered from the sale of surplus permits to speed up its economic growth and poverty reduction and yet keep its per capita emissions below the 1990 per capita global emissions level.

Type
Research Article
Information
Environment and Development Economics , Volume 14 , Issue 3 , June 2009 , pp. 323 - 348
Copyright
Copyright © Cambridge University Press 2008

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Babiker, M.H., Reilly, J.M., Mayer, M., Eckaus, R.S., Wing, I.S., and Hyman, R.C. (2001), ‘The MIT Emissions Prediction and Policy Analysis (EPPA) model: revisions, sensitivities and comparison of results’, Report no. 71, MIT Joint Program on the Science and Policy of Global Change, Cambridge, MA.Google Scholar
Burniaux, J., Nicoletti, G., and Oliveira-Martins, J. (1992), ‘GREEN: a global model for quantifying the cost of policies to curb CO2 emissions’, OECD Economic Studies, no.19, Paris.Google Scholar
CMIE–Energy: Centre for Monitoring Economy – Energy (various issues from 1998 to 2005), Centre for Monitoring Indian Economy Private Limited, Mumbai.Google Scholar
CSO-IOTT: Central Statistical Organisation (1997), Input–Output Transaction Table – 1989–90, New Delhi: Government of India.Google Scholar
CSO-NAS: Central Statistical Organisation – National Accounts Statistics (various issues from 1989–90 to 1990–2000), New Delhi: Government of India.Google Scholar
Edmonds, J., Pitcher, H.M., Barns, D., Baron, R., and Wise, M.A. (1993), ‘Modelling future greenhouse gas emissions: the second generation model description’, in Klein, L.R. and Lo, F.-C (eds.), Modelling Global Change, Tokyo: United Nations University Press, pp. 295–362.Google Scholar
Fisher-Vanden, K.A., Shukla, P.R., Edmonds, J.A., Kim, S.H., and Pitcher, H.M. (1997), ‘Carbon taxes and India’, Energy Economics 19: 289–325.CrossRefGoogle Scholar
Gundimeda, H.S. (2004), ‘Carbon sequestration in forests: potential and incremental costs’, in Toman, M., Chakravarty, U., and Gupta, S (eds.), India and Global Climate Change: Perspectives on Economics and Policy from a Developing Country, New Delhi: Oxford University Press, pp. 166–194.Google Scholar
Karekezi, S., Lata, K., and Coelho, S.T. (2004), ‘Traditional biomass energy: improving its use and moving to modern energy use’, Paper presented at International Conference for Renewable Energies, Bonn, 2004.Google Scholar
Mitra, P.K. (1994), Adjustment in Oil Importing Developing Countries: A Comparative Analysis, New York: Cambridge University Press.Google Scholar
Murthy, N.S., Panda, M., and Parikh, K. (2007), ‘CO2 emission reduction strategies and economic development in India’, Margin: The Journal of Applied Economic Research 1: 85–119.CrossRefGoogle Scholar
NSSO-45th Round: National Sample Survey Organisation, 45th Round (July 1989–June 1990) on Consumer Expenditure and Employment–Unemployment, Sarvekshana (October–December 1999), Government of India, New Delhi.Google Scholar
Ojha, V.P. (2005), ‘The trade-off among carbon emissions, economic growth and poverty reduction in India’, South Asia Network for Development and Environmental Economics (SANDEE) Working Paper 12-05. Also available on website: http://www.sandeeonline.org/publications/working_papers/wp12/working_paper12.jspGoogle Scholar
Parikh, J. and Parikh, K. (1998), ‘Free ride through delay: risk and accountability for climate change’, Environmental and Development Economics 3: 295–317.CrossRefGoogle Scholar
Parikh, J., Parikh, K., Gokarn, S., Painuly, J.P., Saha, B., and Shukla, V. (1991), ‘Consumption patterns: the driving force of environmental stress’, Paper Presented at the United Nations Conference on Environment and Development (UNCED), IGIDR, monograph, Indira Gandhi Institute of Development Research (IGIDR), Mumbai.Google Scholar
Robinson, Sherman et al. (1999), ‘From stylized to applied models: building multisector CGE models for policy analysis’, North American Journal of Economics and Finance 10: 5–38.CrossRefGoogle Scholar
Sengupta, R. and Gupta, M. (2004), ‘Developmental sustainability implications of the economic reforms in the energy sector’, in Toman, M., Chakravarty, U., and Gupta, S. (eds.), India and Global Climate Change: Perspectives on Economics and Policy from a Developing Country, New Delhi: Oxford University Press, pp. 36–71.Google Scholar
Shoven, J.B. and Whalley, J. (1992), Applying General Equilibrium, New York: Cambridge University Press.Google Scholar
TERI (The Energy and Resources Institute) (2004/05), TERI Energy Data Directory and Yearbook (TEDDY), New Delhi.Google Scholar
Yang, Z., Eckaus, R.S., Ellerman, A.D., and Jacoby, H.D. (1996), ‘The MIT Emissions Prediction and Policy Analysis (EPPA) Model’, Report no. 6, MIT Joint Program on the Science and Policy of Global Change, Cambridge, MA.Google Scholar