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Climate policies in a second-best world--A case study on India

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  • Mathy, Sandrine
  • Guivarch, Céline

Abstract

The aim of this article is to analyze the potential for synergies between climate policies and development in a case study on India focusing on the power sector sub-optimalities. To do so, we use Imaclim-R, a dynamic recursive energy-economy model that represents a second best world with market imperfections and short-run adjustments constraints along a long-term growth path. The analysis suggests (i) global carbon pricing induces prohibitive macroeconomic costs for the Indian economy, even in the case of significant financial transfers associated with a global cap-and-trade system and a 'Contraction and Convergence in 2100' allocation scheme and (ii) the most cost efficient climate policies are not uniform carbon pricing only. The implementation of domestic policies suited to the national context, for instance targeting sub-optimalities in the power sector for India, allows reducing significantly the macroeconomic costs induced by international mitigation policies.

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  • Mathy, Sandrine & Guivarch, Céline, 2010. "Climate policies in a second-best world--A case study on India," Energy Policy, Elsevier, vol. 38(3), pages 1519-1528, March.
    • Handle: RePEc:eee:enepol:v:38:y:2010:i:3:p:1519-1528
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    Cited by:

    1. Emanuele Massetti, 2011. "Carbon tax scenarios for China and India: exploring politically feasible mitigation goals," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 11(3), pages 209-227, September.
    2. Vaibhav Chaturvedi & Priyadarshi Shukla, 2014. "Role of energy efficiency in climate change mitigation policy for India: assessment of co-benefits and opportunities within an integrated assessment modeling framework," Climatic Change, Springer, vol. 123(3), pages 597-609, April.
    3. Ruben Bibas & C. Cassen & Renaud Crassous & Céline Guivarch & Meriem Hamdi-Cherif & Jean Charles Hourcade & Florian Leblanc & Aurélie Méjean & Eoin Ó Broin & Julie Rozenberg & Olivier Sassi & Adrien V, 2022. "IMpact Assessment of CLIMate policies with IMACLIM-R 1.1. Model documentation version 1.1," Working Papers hal-03702627, HAL.
    4. Nopiah, Ririn & Widodo, Tri, 2019. "Climate Change Mitigation Through Market-based instruments in Large Asian Emitters," MPRA Paper 91230, University Library of Munich, Germany.
    5. Guivarch, Céline & Monjon, Stéphanie, 2017. "Identifying the main uncertainty drivers of energy security in a low-carbon world: The case of Europe," Energy Economics, Elsevier, vol. 64(C), pages 530-541.
    6. Meriem Hamdi-Cherif & Céline Guivarch & Philippe Quirion, 2011. "Sectoral targets for developing countries: combining 'common but differentiated re-sponsibilities' with 'meaningful participation'," Climate Policy, Taylor & Francis Journals, vol. 11(1), pages 731-751, January.
    7. Tol, Richard S.J., 2017. "The structure of the climate debate," Energy Policy, Elsevier, vol. 104(C), pages 431-438.
    8. Gambhir, Ajay & Napp, Tamaryn A. & Emmott, Christopher J.M. & Anandarajah, Gabrial, 2014. "India's CO2 emissions pathways to 2050: Energy system, economic and fossil fuel impacts with and without carbon permit trading," Energy, Elsevier, vol. 77(C), pages 791-801.
    9. Rao, Narasimha D., 2013. "Distributional impacts of climate change mitigation in Indian electricity: The influence of governance," Energy Policy, Elsevier, vol. 61(C), pages 1344-1356.
    10. Elmar Kriegler & Brian-C O'Neill & Stéphane Hallegatte & Tom Kram & Richard-H Moss & Robert Lempert & Thomas J Wilbanks, 2010. "Socio-economic Scenario Development for Climate Change Analysis," CIRED Working Papers hal-00866437, HAL.
    11. Kimmich, Christian & Sagebiel, Julian, 2016. "Empowering irrigation: A game-theoretic approach to electricity utilization in Indian agriculture," Utilities Policy, Elsevier, vol. 43(PB), pages 174-185.
    12. Jiang, Jingjing & Ye, Bin & Liu, Junguo, 2019. "Research on the peak of CO2 emissions in the developing world: Current progress and future prospect," Applied Energy, Elsevier, vol. 235(C), pages 186-203.
    13. Céline Guivarch & Sandrine Mathy, 2012. "Energy-GDP decoupling in a second best world—a case study on India," Climatic Change, Springer, vol. 113(2), pages 339-356, July.
    14. Neil Strachan & Will Usher, 2012. "Failure to achieve stringent carbon reduction targets in a second-best policy world," Climatic Change, Springer, vol. 113(2), pages 121-139, July.
    15. Guivarch, Celine & Monjon, Stéphanie, 2016. "Energy security in a low-carbon world: Identifying the main uncertain drivers of energy security in Europe," Conference papers 332807, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.

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