CLIMATE POLICIES IN A SECOND-BEST WORLD – A CASE STUDY ON INDIA
Session Climate Change V: CGE
Session ChairRamon Ortiz, BC3 Basque Centre for Climate Change


Presenter(s) Sandrine Mathy, CIRED/CNRS
Discussant(s) Enrica De Cian, FONDAZIONE ENI ENRICO MATTEI
Co-Author(s) Céline Guivarch, CIRED
WCERE Categorys Energy issues, Climate change, CGE models and environment and Environment and development
Keywords India, power sector, second-best world and synergies between climate mitigation and development

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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; (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.

 
When & Where
Thu 1 Jul 10
16:15 - 18:00
Room DS-M260
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