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Implementing Kyoto-type Flexibility Mechanisms for India: Issues and Prospects

Author

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  • Shreekant Gupta

    (Delhi School of Economics)

Abstract

This paper examines various aspects of market-based instruments for greenhouse gas (GHG) abatement for India, particularly the linkages among these instruments and issues related to their implementation. It has been argued in light of concessions made at Bonn and Marrakech, the market for Clean Development Mechanism (CDM) projects will be small compared to GHG emissions in developing countries) and that it will be characterised by low demand and low prices. The paper examines these arguments in the context of India and the likely nature and extent of India's involvement in CDM activities. It also addresses the issue of division of gains from implementing CDM projects between the host and funding parties. Another question examined is whether India stands to gain or lose if emissions trading is realised even if it remains outside such an arrangement during the initial commitment period. In the long run, however, it is inevitable that India along with other rapidly industrialising countries will have to take on GHG reduction commitments. In this context, the important questions that this paper addresses are: (i) the possibilities of convergence across Kyoto-type flexibility mechanisms, particularly emissions trading and CDM, and (ii) issues of monitoring, enforcement and verification for these mechanisms. With regard to (ii) the paper compares the pros and cons of emissions trading and CDM from a conceptual and a practical point of view.

Suggested Citation

  • Shreekant Gupta, 2003. "Implementing Kyoto-type Flexibility Mechanisms for India: Issues and Prospects," Working papers 117, Centre for Development Economics, Delhi School of Economics.
  • Handle: RePEc:cde:cdewps:117
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    References listed on IDEAS

    as
    1. Philibert, Cedric, 2000. "How could emissions trading benefit developing countries," Energy Policy, Elsevier, vol. 28(13), pages 947-956, November.
    2. David O'Connor, 1995. "Applying Economic Instruments in Developing Countries: From Theory to Implementation," EEPSEA Special and Technical Paper sp199501t3, Economy and Environment Program for Southeast Asia (EEPSEA), revised Jan 1995.
    3. Karp, Larry & Liu, Xuemei, 2000. "The Clean Development Mechanism and its Controversies," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt9739314q, Department of Agricultural & Resource Economics, UC Berkeley.
    4. Chen, Wenying, 2003. "Carbon quota price and CDM potentials after Marrakesh," Energy Policy, Elsevier, vol. 31(8), pages 709-719, June.
    5. Leimbach, Marian, 2003. "Equity and carbon emissions trading: a model analysis," Energy Policy, Elsevier, vol. 31(10), pages 1033-1044, August.
    6. Eskeland, Gunnar S & Jimenez, Emmanuel, 1992. "Policy Instruments for Pollution Control in Developing Countries," World Bank Research Observer, World Bank Group, vol. 7(2), pages 145-169, July.
    7. Halsnaes, Kirsten, 2002. "Market potential for Kyoto mechanisms--estimation of global market potential for co-operative greenhouse gas emission reduction policies," Energy Policy, Elsevier, vol. 30(1), pages 13-32, January.
    8. Gupta, Sujata & M Bhandari, Preety, 1999. "An effective allocation criterion for CO2 emissions," Energy Policy, Elsevier, vol. 27(12), pages 727-736, November.
    9. Frank Jotzo & Axel Michaelowa, 2002. "Estimating the CDM market under the Marrakech Accords," Climate Policy, Taylor & Francis Journals, vol. 2(2-3), pages 179-196, September.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    climate change; clean development mechanism; market-based instruments;

    JEL classification:

    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
    • F00 - International Economics - - General - - - General
    • H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods

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