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Clearing the Air in India: The Economics of Climate Policy with Ancillary Benefits


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  • Maurizio Bussolo
  • David O’Connor


With the aid of a computable general equilibrium model, this paper estimates for India the magnitude of spillovers from limiting growth of greenhouse gas emissions to local air quality and the health of the urban population. The most important spillovers are reductions in emissions of particulates with associated declines in mortality and morbidity. By valuing these spillovers (or ancillary benefits), we can compare them with the welfare costs of climate policy, estimating that — on conservative assumptions — emissions could be reduced by somewhat more than 10 per cent from their 2010 baseline level without incurring net costs. With central estimates of substitution elasticities and willingness-to-pay for health improvements, “no regrets” abatement could reach around 17-18 per cent of baseline emissions. The analysis also permits assessment of the inter-regional variation in costs and benefits, finding that abatement costs are relatively low and ancillary benefits high in North and ... Ce Document technique propose une estimation des retombées d’une limitation des émissions de gaz à effet de serre sur la qualité de l’air et la santé de la population urbaine en Inde. Il utilise pour ce faire un modèle calculable d’équilibre général. Les retombées les plus notables concernent la réduction des émissions de particules qui se traduit par un recul de la mortalité et de la morbidité. En évaluant ces retombées (ou avantages indirects), les auteurs les comparent avec les coûts pour le bien-être des politiques relatives au changement climatique et estiment — sur la base d’hypothèses conservatoires — que les émissions pourraient être diminuées de quelque 10 pour cent par rapport à leur niveau de base de 2010, sans entraîner de coût net. Si l’on prend en compte les élasticités de substitution et la propension de la population à payer pour améliorer sa santé, alors cette réduction « sans coût » des émissions pourrait atteindre 17-18 pour cent de leur niveau de base pour 2010 ...

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Bibliographic Info

Paper provided by OECD Publishing in its series OECD Development Centre Working Papers with number 182.

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Date of creation: Nov 2001
Date of revision:
Handle: RePEc:oec:devaaa:182-en

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Cited by:
  1. Mani, Muthukumara & Markandya, Anil & Sagar, Aarsi & Sahin, Sebnem, 2012. "India’s economic growth and environmental sustainability : what are the tradeoffs ?," Policy Research Working Paper Series 6208, The World Bank.
  2. Shreekant Gupta, 2000. "Incentive-Based Approaches for Mitigating Greenhouse Gas Emissions: Issues and Prospects for India," Working papers 85, Centre for Development Economics, Delhi School of Economics.
  3. Pittel, Karen & Rübbelke, Dirk T. G., 2008. "Climate policy and ancillary benefits: A survey and integration into the modelling of international negotiations on climate change," Munich Reprints in Economics 19350, University of Munich, Department of Economics.
  4. Weitzel, Matthias & Ghosh, Joydeep & Peterson, Sonja & Pradhan, Basanta, 2013. "Effects of international climate policy for India: Evidence from a national and global CGE model," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79771, Verein für Socialpolitik / German Economic Association.
  5. Gundimeda, Haripriya & Kohlin, Gunnar, 2008. "Fuel demand elasticities for energy and environmental policies: Indian sample survey evidence," Energy Economics, Elsevier, vol. 30(2), pages 517-546, March.
  6. Mani, Muthukumara & Markandya, Anil & Sagar, Aarsi & Strukova, Elena, 2012. "An analysis of physical and monetary losses of environmental health and natural resources in India," Policy Research Working Paper Series 6219, The World Bank.
  7. World Bank, 2007. "Power System Planning in India : Incorporating Environmental Externality Costs and Benefits," World Bank Other Operational Studies 7930, The World Bank.
  8. Michael Finus & Dirk Rübbelke, 2013. "Public Good Provision and Ancillary Benefits: The Case of Climate Agreements," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 56(2), pages 211-226, October.
  9. Finus, Michael & Rubbelke, Dirk T G, 2008. "Coalition Formation and the Ancillary Benefits of Climate Policy," Stirling Economics Discussion Papers 2008-13, University of Stirling, Division of Economics.
  10. Nathan Rive & Dirk Rübbelke, 2010. "International environmental policy and poverty alleviation," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 146(3), pages 515-543, September.
  11. Sébastien Dessus & David O'Connor, 2003. "Climate Policy without Tears CGE-Based Ancillary Benefits Estimates for Chile," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 25(3), pages 287-317, July.
  12. Haripriya Gundimeda & Gunnar Köhlin, 2006. "Fuel Demand Elasticities for Energy and Environmental Policies Indian Sample Survey Evidence," Energy Working Papers 22501, East Asian Bureau of Economic Research.
  13. Larson, Donald F. & Ambrosi, Philippe & Dinar, Ariel & Rahman, Shaikh Mahfuzur & Entler, Rebecca, 2008. "Carbon markets, institutions, policies, and research," Policy Research Working Paper Series 4761, The World Bank.
  14. Shreekant Gupta, 2010. "Incentive Based Approaches for Mitigating Greenhouse Gas Emmissions : Issues And Prospects for India," Working Papers id:2638, eSocialSciences.
  15. Haripriya Gundimeda & Atheendar Gunnar Köhlin, 2006. "Fuel Demand Elasticities for Energy and Environmental Policies: Indian Sample Survey Evidence," Working Papers 2006-09, Madras School of Economics,Chennai,India.


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