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Scope for Reducing CO2 Emissions of Indian Manufacturing: Its Likely Impact on Export Competitiveness

Author

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  • Bishwanath Goldar

    (Institute of Economic Growth, University Enclave, New Delhi, Delhi 110007, India)

  • Meera Bhalla

    (India Infrastructure Publishing Limited, B-17, Qutab Institutional Area, Institutional Area, New Delhi, Delhi 110016, India)

Abstract

This paper explores how reductions in carbon dioxide (CO2) emissions of Indian manufacturing would impact the export competitiveness of Indian manufacturing firms, by estimating production functions of alternate specifications using data on manufacturing companies for 2007–2008. The results indicate substantial scope for reduction in CO2 emissions through factor substitution and reduction in technical inefficiency. The analysis presented in the paper indicates that a reasonable carbon tax of US$ 4–15 per tonne of CO2would cause costs in industrial companies to increase, on average, by 0.36%–1.33% and the consequent loss of exports because of the carbon tax is likely to be small.

Suggested Citation

  • Bishwanath Goldar & Meera Bhalla, 2015. "Scope for Reducing CO2 Emissions of Indian Manufacturing: Its Likely Impact on Export Competitiveness," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 6(03), pages 1-27.
    • Handle: RePEc:wsi:jicepx:v:06:y:2015:i:03:n:s1793993315500180
    DOI: 10.1142/S1793993315500180
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    References listed on IDEAS

    as
    1. Rubashkina, Yana & Galeotti, Marzio & Verdolini, Elena, 2015. "Environmental regulation and competitiveness: Empirical evidence on the Porter Hypothesis from European manufacturing sectors," Energy Policy, Elsevier, vol. 83(C), pages 288-300.
    2. Fischer, Carolyn & Fox, Alan K., 2009. "Combining Rebates with Carbon Taxes: Optimal Strategies for Coping with Emissions Leakage and Tax Interactions," RFF Working Paper Series dp-09-12, Resources for the Future.
    3. George van Leeuwen & Pierre Mohnen, 2017. "Revisiting the Porter hypothesis: an empirical analysis of Green innovation for the Netherlands," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 26(1-2), pages 63-77, February.
    4. Adkins, Liwayway & Garbaccio, Richard & Ho, Mun & Moore, Eric & Morgenstern, Richard, 2010. "The Impact on U.S. industries of Carbon Prices with Output-Based Rebates over Multiple Time Frames," Conference papers 331980, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    5. De Miguel, Carlos & Ludena, Carlos & Schuschny, Andres, 2009. "Climate Change and Reduction of CO2 Emissions: the role of Developing Countries in Carbon Trade Markets," Conference papers 331823, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    6. Donald B. Marron & Eric J. Toder, 2014. "Tax Policy Issues in Designing a Carbon Tax," American Economic Review, American Economic Association, vol. 104(5), pages 563-568, May.
    7. Ho, Mun S. & Morgenstern, Richard & Shih, Jhih-Shyang, 2008. "Impact of Carbon Price Policies on U.S. Industry," RFF Working Paper Series dp-08-37, Resources for the Future.
    8. Nathalie Trudeau & Cecilia Tam & Dagmar Graczyk & Peter Taylor, 2011. "Energy Transition for Industry: India and the Global Context," IEA Energy Papers 2011/2, OECD Publishing.
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    Cited by:

    1. Bishwanath Goldar & Yashobanta Parida & Deepika Sehdev, 2017. "Reduction in Carbon Emissions Intensity and Impact on Export Competitiveness: Evidence from Indian Manufacturing Firms," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 8(02), pages 1-30, June.

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    More about this item

    Keywords

    CO2 emissions; carbon tax; export competitiveness; factor substitution; Indian manufacturing; F18; Q52; Q53;
    All these keywords.

    JEL classification:

    • F18 - International Economics - - Trade - - - Trade and Environment
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

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