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Economic analysis of the hard-to-abate sectors in India

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  • Paltsev, Sergey
  • Gurgel, Angelo
  • Morris, Jennifer
  • Chen, Henry
  • Dey, Subhrajit
  • Marwah, Sumita

Abstract

We assess the contribution of India's hard-to-abate sectors to the country's current emissions and their likely future trajectory of development under different policy regimes. We employ an enhanced version of the MIT Economic Projection and Policy Analysis (EPPA) model to explicitly represent the following hard-to-abate sectors: iron and steel, non-ferrous metals (copper, aluminum, zinc, etc.), non-metallic minerals (cement, plaster, lime, etc.), and chemicals. We find that, without additional policies, the Paris Agreement pledges made by India for the year 2030 still can lead to an increasing use of fossil fuels and corresponding greenhouse gas (GHG) emissions, with projected CO2 emissions from hard-to-abate sectors growing by about 2.6 times from 2020 to 2050. Scenarios with electrification, natural gas support, or increased resource efficiency lead to a decrease in emissions from these sectors by 15–20% in 2050, but without carbon pricing (or disruptive technology changes) emissions are not reduced relative to their current levels due to growth in output. Carbon pricing that makes carbon capture and storage (CCS) economically competitive is critical for achieving substantial emission reductions in hard-to-abate sectors, enabling emission reductions of 80% by 2050 relative the scenario without additional policies. Without a substantial government support, decarbonization of India's hard-to-abate sectors will not be achievable.

Suggested Citation

  • Paltsev, Sergey & Gurgel, Angelo & Morris, Jennifer & Chen, Henry & Dey, Subhrajit & Marwah, Sumita, 2022. "Economic analysis of the hard-to-abate sectors in India," Energy Economics, Elsevier, vol. 112(C).
    • Handle: RePEc:eee:eneeco:v:112:y:2022:i:c:s0140988322003048
    DOI: 10.1016/j.eneco.2022.106149
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    References listed on IDEAS

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    1. Kapsalyamova, Zhanna & Paltsev, Sergey, 2020. "Use of natural gas and oil as a source of feedstocks," Energy Economics, Elsevier, vol. 92(C).
    2. Rissman, Jeffrey & Bataille, Chris & Masanet, Eric & Aden, Nate & Morrow, William R. & Zhou, Nan & Elliott, Neal & Dell, Rebecca & Heeren, Niko & Huckestein, Brigitta & Cresko, Joe & Miller, Sabbie A., 2020. "Technologies and policies to decarbonize global industry: Review and assessment of mitigation drivers through 2070," Applied Energy, Elsevier, vol. 266(C).
    3. Paltsev, Sergey & Morris, Jennifer & Kheshgi, Haroon & Herzog, Howard, 2021. "Hard-to-Abate Sectors: The role of industrial carbon capture and storage (CCS) in emission mitigation," Applied Energy, Elsevier, vol. 300(C).
    4. Angel Aguiar & Maksym Chepeliev & Erwin L. Corong & Robert McDougall & Dominique van der Mensbrugghe, 2019. "The GTAP Data Base: Version 10," Journal of Global Economic Analysis, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, vol. 4(1), pages 1-27, June.
    5. Chen, Y.-H. Henry & Paltsev, Sergey & Reilly, John M. & Morris, Jennifer F. & Babiker, Mustafa H., 2016. "Long-term economic modeling for climate change assessment," Economic Modelling, Elsevier, vol. 52(PB), pages 867-883.
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    Cited by:

    1. Das, Khanindra Ch. & Mahalik, Mantu Kumar, 2023. "Renewable energy use and export performance of manufacturing firms: Panel evidence from six industries in India," Energy Economics, Elsevier, vol. 125(C).

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