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Recycling carbon tax for inclusive green growth: A CGE analysis of India

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  • Ojha, Vijay P.
  • Pohit, Sanjib
  • Ghosh, Joydeep

Abstract

In this decade, India has been pursuing a low carbon inclusive growth strategy. However, carbon tax, the most direct price instrument to reduce carbon emissions, has not found favour with policymakers because of its supposed detrimental effects on economic growth and income distribution. In the Indian context, the literature indicates that though carbon tax is extremely effective in abating carbon emissions, it simultaneously leads to reductions in GDP. There is, thus, an undesirable trade-off between economic growth and climate change mitigation. However, in trying to overcome this trade-off through a double-dividend from carbon tax, these studies have not really explored all possible options. Whether the carbon tax will yield a double-dividend or not, will depend upon how the carbon tax revenue is recycled.

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  • Ojha, Vijay P. & Pohit, Sanjib & Ghosh, Joydeep, 2020. "Recycling carbon tax for inclusive green growth: A CGE analysis of India," Energy Policy, Elsevier, vol. 144(C).
    • Handle: RePEc:eee:enepol:v:144:y:2020:i:c:s0301421520304353
    DOI: 10.1016/j.enpol.2020.111708
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    References listed on IDEAS

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