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Climate policies in a second-best world- a case study on India

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  • Sandrine Mathy

    ()
    (CIRED - Centre International de Recherche sur l'Environnement et le Développement - Centre de coopération internationale en recherche agronomique pour le développement [CIRAD] : UMR56 - CNRS : UMR8568 - École des Hautes Études en Sciences Sociales [EHESS] - Ecole des Ponts ParisTech - AgroParisTech)

  • Céline Guivarch

    ()
    (CIRED - Centre International de Recherche sur l'Environnement et le Développement - Centre de coopération internationale en recherche agronomique pour le développement [CIRAD] : UMR56 - CNRS : UMR8568 - École des Hautes Études en Sciences Sociales [EHESS] - Ecole des Ponts ParisTech - AgroParisTech)

Abstract

The aim of this article is to analyze the potential for synergies between climate policies and development in a case study on India focusing on the power sector sub-optimalities. To do so, we use IMACLIM-R, a dynamic recursive energy-economy model that represents a second best world with market imperfections and short-run adjustments constraints along a long-term growth path. The analysis suggests (i) global carbon pricing induces prohibitive macroeconomic costs for the Indian economy, even in the case of significant financial transfers associated with a global cap-and-trade system and a "Contraction and Convergence in 2100" allocation scheme; (ii) the most cost efficient climate policies are not uniform carbon pricing only. The implementation of domestic policies suited to the national context, for instance targeting sub-optimalities in the power sector for India, allows reducing significantly the macroeconomic costs induced by international mitigation policies.

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Bibliographic Info

Paper provided by HAL in its series Post-Print with number halshs-00724498.

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Date of creation: 2010
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Publication status: Published, Energy Policy, 2010, 38, 3, 1519-1528
Handle: RePEc:hal:journl:halshs-00724498

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Related research

Keywords: India; second-best world; synergies between climate mitigation and development;

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  1. Olivier Sassi & Renaud Crassous & Jean-Charles Hourcade & Vincent Gitz & Henri Waisman & Celine Guivarch, 2010. "IMACLIM-R: a modelling framework to simulate sustainable development pathways," International Journal of Global Environmental Issues, Inderscience Enterprises Ltd, Inderscience Enterprises Ltd, vol. 10(1/2), pages 5-24.
  2. Oliveira Martins, Joaquim & Gonand, Frédéric & Antolín, Pablo & de la Maisonneuve, Christine & Yoo, Kwang-Yeol, 2005. "The Impact of Ageing on Demand, Factor Markets and Growth," Economics Papers from University Paris Dauphine 123456789/11049, Paris Dauphine University.
  3. van Ruijven, Bas & Urban, Frauke & Benders, René M.J. & Moll, Henri C. & van der Sluijs, Jeroen P. & de Vries, Bert & van Vuuren, Detlef P., 2008. "Modeling Energy and Development: An Evaluation of Models and Concepts," World Development, Elsevier, Elsevier, vol. 36(12), pages 2801-2821, December.
  4. Guivarch, Céline & Hallegatte, Stéphane & Crassous, Renaud, 2009. "The resilience of the Indian economy to rising oil prices as a validation test for a global energy-environment-economy CGE model," Energy Policy, Elsevier, Elsevier, vol. 37(11), pages 4259-4266, November.
  5. Sandrine Mathy & Céline Guivarch, 2009. "What if energy decoupling of emerging economies were not so spontaneous ? An illustrative example on India," CIRED Working Papers hal-00866443, HAL.
  6. Carol Corrado & Joe Mattey, 1997. "Capacity Utilization," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 11(1), pages 151-167, Winter.
  7. A. Bovenberg, 1999. "Green Tax Reforms and the Double Dividend: an Updated Reader's Guide," International Tax and Public Finance, Springer, Springer, vol. 6(3), pages 421-443, August.
  8. Shukla, P. R., 1995. "Greenhouse gas models and abatement costs for developing nations : A critical assessment," Energy Policy, Elsevier, Elsevier, vol. 23(8), pages 677-687, August.
  9. Filippini, Massimo & Pachauri, Shonali, 2004. "Elasticities of electricity demand in urban Indian households," Energy Policy, Elsevier, Elsevier, vol. 32(3), pages 429-436, February.
  10. Urban, F. & Benders, R.M.J. & Moll, H.C., 2007. "Modelling energy systems for developing countries," Energy Policy, Elsevier, Elsevier, vol. 35(6), pages 3473-3482, June.
  11. Thakur, Tripta & Deshmukh, S.G. & Kaushik, S.C., 2006. "Efficiency evaluation of the state owned electric utilities in India," Energy Policy, Elsevier, Elsevier, vol. 34(17), pages 2788-2804, November.
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Citations

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Cited by:
  1. Meriem Hamdi-Cherif & Céline Guivarch & Philippe Quirion, 2011. "Sectoral Targets for Developing Countries: Combining "Common but differentiated Responsibilities with meaningful Participation"," Post-Print, HAL halshs-00692486, HAL.
  2. Elmar Kriegler & Brian-C O'Neill & Stéphane Hallegatte & Tom Kram & Richard-H Moss & Robert Lempert & Thomas J Wilbanks, 2010. "Socio-economic Scenario Development for Climate Change Analysis," CIRED Working Papers hal-00866437, HAL.
  3. Emanuele Massetti, 2011. "Carbon tax scenarios for China and India: exploring politically feasible mitigation goals," International Environmental Agreements: Politics, Law and Economics, Springer, Springer, vol. 11(3), pages 209-227, September.
  4. Neil Strachan & Will Usher, 2012. "Failure to achieve stringent carbon reduction targets in a second-best policy world," Climatic Change, Springer, Springer, vol. 113(2), pages 121-139, July.
  5. Vaibhav Chaturvedi & Priyadarshi Shukla, 2014. "Role of energy efficiency in climate change mitigation policy for India: assessment of co-benefits and opportunities within an integrated assessment modeling framework," Climatic Change, Springer, Springer, vol. 123(3), pages 597-609, April.
  6. Rao, Narasimha D., 2013. "Distributional impacts of climate change mitigation in Indian electricity: The influence of governance," Energy Policy, Elsevier, Elsevier, vol. 61(C), pages 1344-1356.
  7. Céline Guivarch & Sandrine Mathy, 2012. "Energy-GDP decoupling in a second best world--a case study on India," Post-Print, HAL halshs-00724495, HAL.
  8. repec:hal:wpaper:hal-00866437 is not listed on IDEAS

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