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Effects of international climate policy for India: Evidence from a national and global CGE model

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  • Weitzel, Matthias
  • Ghosh, Joydeep
  • Peterson, Sonja
  • Pradhan, Basanta K.

Abstract

In order to reach the two degree target it is necessary to control CO2 emissions also in fast growing emerging economies such as India. The question is how the Indian economy would be affected by e.g. including the country into an international climate regime. Existing analyses with either a global model or a single country computable general equilibrium model miss important aspects such as distributional issues or international repercussions. By soft-linking models of these two classes, we provide a more detailed view on these issues. In particular, we analyze different options of transferring revenues from domestic carbon taxes and international transfers to different household types and how different assumptions on exchange rates affect transfer payments. We also show effects stemming from international price repercussions. Our analysis focusses on how these transmission channels affect welfare of nine different household types.

Suggested Citation

  • Weitzel, Matthias & Ghosh, Joydeep & Peterson, Sonja & Pradhan, Basanta K., 2012. "Effects of international climate policy for India: Evidence from a national and global CGE model," Kiel Working Papers 1810, Kiel Institute for the World Economy (IfW).
    • Handle: RePEc:zbw:ifwkwp:1810
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    References listed on IDEAS

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    1. McKibbin, Warwick J. & Shackleton, Robert & Wilcoxen, Peter J., 1999. "What to expect from an international system of tradable permits for carbon emissions," Resource and Energy Economics, Elsevier, vol. 21(3-4), pages 319-346, August.
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    4. Niklas H�hne & Michel den Elzen & Martin Weiss, 2006. "Common but differentiated convergence (CDC): a new conceptual approach to long-term climate policy," Climate Policy, Taylor & Francis Journals, vol. 6(2), pages 181-199, March.
    5. Johansson, Daniel J. A. & Lucas, Paul L. & Weitzel, Matthias & Ahlgren, Erik O. & Bazaz, A. B. & Chen, Wenying & den Elzen, Michel G. J. & Ghosh, Joydeep & Grahn, Maria & Liang, Qiao-Mei & Peterson, S, 2012. "Multi-model analyses of the economic and energy implications for China and India in a post-Kyoto climate regime," Kiel Working Papers 1808, Kiel Institute for the World Economy (IfW).
    6. van Ruijven, Bas J. & Weitzel, Matthias & den Elzen, Michel G.J. & Hof, Andries F. & van Vuuren, Detlef P. & Peterson, Sonja & Narita, Daiju, 2012. "Emission allowances and mitigation costs of China and India resulting from different effort-sharing approaches," Energy Policy, Elsevier, vol. 46(C), pages 116-134.
    7. World Bank, 2012. "World Development Indicators 2012," World Bank Publications, The World Bank, number 6014, June.
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    9. P. Shukla & Subash Dhar, 2011. "Climate agreements and India: aligning options and opportunities on a new track," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 11(3), pages 229-243, September.
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    Citations

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    Cited by:

    1. Pradhan, Basanta K. & Ghosh, Joydeep & Yao, Yun-Fei & Liang, Qiao-Mei, 2017. "Carbon pricing and terms of trade effects for China and India: A general equilibrium analysis," Economic Modelling, Elsevier, vol. 63(C), pages 60-74.
    2. Daniel Johansson & Paul Lucas & Matthias Weitzel & Erik Ahlgren & A. Bazaz & Wenying Chen & Michel Elzen & Joydeep Ghosh & Maria Grahn & Qiao-Mei Liang & Sonja Peterson & Basanta Pradhan & Bas Ruijven, 2015. "Multi-model comparison of the economic and energy implications for China and India in an international climate regime," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 20(8), pages 1335-1359, December.
    3. Johansson, Daniel J. A. & Lucas, Paul L. & Weitzel, Matthias & Ahlgren, Erik O. & Bazaz, A. B. & Chen, Wenying & den Elzen, Michel G. J. & Ghosh, Joydeep & Grahn, Maria & Liang, Qiao-Mei & Peterson, S, 2012. "Multi-model analyses of the economic and energy implications for China and India in a post-Kyoto climate regime," Kiel Working Papers 1808, Kiel Institute for the World Economy (IfW).
    4. Gupta, Dipti & Ghersi, Frédéric & Vishwanathan, Saritha S. & Garg, Amit, 2019. "Achieving sustainable development in India along low carbon pathways: Macroeconomic assessment," World Development, Elsevier, vol. 123(C), pages 1-1.
    5. Charlotte Senkpiel & Audrey Dobbins & Christina Kockel & Jan Steinbach & Ulrich Fahl & Farina Wille & Joachim Globisch & Sandra Wassermann & Bert Droste-Franke & Wolfgang Hauser & Claudia Hofer & Lars, 2020. "Integrating Methods and Empirical Findings from Social and Behavioural Sciences into Energy System Models—Motivation and Possible Approaches," Energies, MDPI, Open Access Journal, vol. 13(18), pages 1-1, September.

    More about this item

    Keywords

    Computable General Equilibrium Model; International Climate Policy; India;

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • 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

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