Role of Economic Instruments in Mitigating

Carbon Emissions (An Indian Perspective)

Name : T.JAYASRI SATYA

Enrollment No.: 09115092 Branch/Group :ELECTRICAL(E-5)

ABSTRACT
Introduction:The increased level of greenhouse gas emissions in In-
dia and South Asia have serious consequences. Therefore, restricting
carbon emissions is a must for India for it to progress towards a
sustainable path of development. Stronger environmental measures
including use of clean fuel and encouraging energy efficiency are
two of them. The environmental cost of economic development is a
matter of grave concern.
Objective:
The primary objective of this paper is to analyse the rationale behind
different economic instruments used for mitigating carbon emissions
and the likely impact of carbon taxation on mitigating carbon emission
from industrial usage.

Methodology:
Source of Data: NCAER model forecast, OECD Energy Statistics
and Balances of Non-OECD Countries,various years.
Method of Analysis:
First of all it analyses the pattern of energy usage in India and the
implications thereof relating to carbon emissions. Second, it examines
whether pricing and taxation policies have any role to play in mitigating
carbon emissions from industrial usage in important energy products.
The study shows that the pattern of energy usage exhibits a shift towar-
ds non-coal based energy products. It also suggests that the extent
of carbon emission reduction is not substantial enough to warrant the
use o-f carbon taxation for mitigating emissions.
Results:
The proportion of reduction from the current tax scenario has been
computed to provide an impression of the relative change with the
change in taxation. An increase in the price of energy products due to
carbon tax would lead to lower industrial production because of
technological constraints, particularly in the initial periods.

CONCLUSION: The existing literature is of the opinion that one has to

choose the right instrument depending on the situation. This would be
one of our future areas of work. Therefore, much detailed, extensive and
meticulous analysis is required to reach at any conclusion regarding the
role of carbon tax as an instrument for reducing carbon emissions in the
country.