Evaluating India’s Climate Targets: The Implications of Economy-Wide and Sector-Specific Policies

Abstract

We employ a numerical economy-wide model of India with energy sector detail to evaluate the impact of achieving India’s commitments to the Paris Climate Agreement. We simulate targets for reducing CO2 emissions intensity of GDP via an economy-wide CO2 price and for increasing non-fossil electricity capacity via a Renewable Portfolio Standard. We find that compared with the no policy scenario in 2030, the average cost per unit of emissions reduced is lowest under a CO2 pricing regime. A pure RPS costs more than 10 times the cost of a CO2 pricing regime. Projected electricity demand in 2030 decreases by 8% under the CO2 price, while introducing an RPS further suppresses electricity demand. Importantly, a reduction in the costs of wind and solar power induced by favorable policies may result in cost convergence across instruments, paving the way for more aggressive decarbonization policies in the future.

Green Trend in Global Energy Development: Tendencies and Opportunities

“…The largest energy suppliers were China, India, and Indonesia. The most noticeable decline was observed in the United States and Germany (Singh et al, 2019;Zhu et al, 2019).…”

Developing new pathways for energy and environmental decision-making in India: a review

“…Overall, several national and sectoral scenarios indicate it is likely India will achieve its power sector NDC target of 40% non-fossil capacity by 2030 with limited or no additional effort beyond stated policies (Shukla et al 2017, du Can et al 2019, Singh et al 2019. Several scenarios indicate that India is likely to outperform this target and achieve non-fossil capacity from 45% to 59% in 2030 (Chattopadhyay and Sharma 2017, Chaturvedi et al 2021, IEA 2021).…”

The Economic, Energy, and Emissions Impacts of Climate Policy in South Korea

“…This representation leads to rising marginal generation costs and limits penetration of each technology. Other studies that use technology-specific factors to control for intermittency (and other) factors not explicitly represented in economy-wide models include Orlov and Aaheim (2017) and Singh et al (2017). An advantage of this approach is that it facilitates exogenous assignment of generation from these technologies to meet external forecasts in the BAU scenario, while at the same time allowing price-induced changes in generation in the policy scenarios.…”