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CO2 mitigation policy for Indian thermal power sector: Potential gains from emission trading

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  • Kumar, Surender
  • Managi, Shunsuke
  • Jain, Rakesh Kumar

Abstract

This study shows potential cost savings by adoption of emission trading in India. At the Paris Agreement, India pledged to reduce CO2 emissions intensity by about 30–35% by 2030 relative to 2005. Applying joint production function of electricity and CO2 emissions, we find that India could have saved about US$ 5 to 8 billion, if she had constituted an emission trading system, with the provision of banking and borrowing over the study period of 5 years. To our knowledge, this is the first study measuring foregone gains due to absence of a nationwide carbon emission-trading program in coal fired thermal power sector, using an ex-post analysis.

Suggested Citation

  • Kumar, Surender & Managi, Shunsuke & Jain, Rakesh Kumar, 2020. "CO2 mitigation policy for Indian thermal power sector: Potential gains from emission trading," Energy Economics, Elsevier, vol. 86(C).
    • Handle: RePEc:eee:eneeco:v:86:y:2020:i:c:s0140988319304505
    DOI: 10.1016/j.eneco.2019.104653
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    Cited by:

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    2. Yelin Wang & Ping Yang & Zan Song & Julien Chevallier & Qingtai Xiao, 2024. "Intelligent Prediction of Annual CO2 Emissions Under Data Decomposition Mode," Computational Economics, Springer;Society for Computational Economics, vol. 63(2), pages 711-740, February.
    3. Feng, Huchen & Hu, Yu-Jie & Li, Chengjiang & Wang, Honglei, 2023. "Rolling horizon optimisation strategy and initial carbon allowance allocation model to reduce carbon emissions in the power industry: Case of China," Energy, Elsevier, vol. 277(C).
    4. Shashank Bansal & Satya Prakash Mani & Himanshu Gupta & Shipra Maurya, 2023. "Sustainable development of the green bond markets in India: Challenges and strategies," Sustainable Development, John Wiley & Sons, Ltd., vol. 31(1), pages 237-252, February.
    5. Jindal, Abhinav & Nilakantan, Rahul & Sinha, Avik, 2024. "CO2 emissions abatement costs and drivers for Indian thermal power industry," Energy Policy, Elsevier, vol. 184(C).
    6. Quinn, Barry & Gallagher, Ronan & Kuosmanen, Timo, 2023. "Lurking in the shadows: The impact of CO2 emissions target setting on carbon pricing in the Kyoto agreement period," Energy Economics, Elsevier, vol. 118(C).

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    More about this item

    Keywords

    CO2 emission trading; India; Technical efficiency;
    All these keywords.

    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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