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A CGE Analysis of the Effects of Global Climate Change Mitigation Policies on India
Abstract
This paper compares the effects of a global carbon tax and a global emissions trading regime on India using a dynamic CGE framework. The sensitivity of the results to the value of a crucial elasticity parameter is also analysed. The results suggest that the choice of the mitigation policy is relatively unimportant from an efficiency perspective. However, the choice of the mitigation policy and the value of the substitution elasticity between value added and energy were found to be important determinants of welfare effects. Global climate change mitigation policies have the potential for promoting low carbon and inclusive growth in India.
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