CGE Model -

Inputs
•Social Accounting Instruments/Policy
Matrix created for India Scenarios •Endogenous
using data from various CGE Model energy efficiency and end Outputs
government sources and •Simulate Indian of pipe technology
academic literature economy covering 57 improvements •GDP
•Emission Coefficients sectors •Environmental taxes •PM10
•Estimates on existing •Transition to cleaner and Emissions
emission reduction cost effective production
programs technologies and processes

Business As Usual (BAU):

Conventional Growth with existing policies

Scenario 1 : 10% reduction in PM10 emissions in

2030 w.r.t .BAU

Scenario 2 : 30% reduction in PM10 emissions in

2030 w.r.t. BAU

Policy options:
Incentivizing technology up gradation through
economic instruments, securing efficiency
improvements, strengthening enforcement,
enhancement of technology and efficiency standards
Scenarios Instruments Assumptions Outcomes
Economic growth of Some PM emission Driven by the
approximately 7 % reduction because macro-economic structural shift
BAU GDP Growth p.a. of increase in away from the agriculture sector
autonomous energy towards knowledge-
efficiency of supply based industries, greater and
and end-use easier access to global
technologies (driven knowledge, technology and
by capital. In addition
current policies). the shift also reflects the recent
policy initiatives to reduce the
sulphur content of diesel.
Using a tax on coal Tax induced shift to A 10 percent Broader concepts of green
only. Tax applied to a greener fuel mix reduction in growth are usually defined by
both domestic and and annual energy PM10 and other sustainable
imported coal. efficiency gains over small development options .A tax thus
Green Growth and above the particles in 2030 designed on polluting inputs will
Using a tax on PM10. historic trend. over and raise the unit cost of production
Tax applied to coal Limited above reductions and, responding to reduce the
and oil in relation to investment achieved output or substitute it with eco-
the emissions of PM10 availability and under BAU friendly input. Either will reduce
and other small turnover of capital pollution.
particles stock.

Using a tax on coal Tax induced shift A 30 percent As the economy matures, the
only. Tax applied to leading reduction in market realizes the
both domestic and to significant PM10 and other economic benefits of cleaner
imported coal. improvement small and efficient production.
Green Growth in coal technologies particles in 2030 Gradually the environmental
Using a Tax on PM10. Tax along over and command-and-control ‘push’
Plus applied to coal with change in plant above reductions policies in the initial periods are
and oil in relation to vintages over time. achieved under BAU replaced in the medium to long
the emissions of PM10 Higher run by market-driven pull
and other small investment policies to achieve cleaner and
particles. availability and more efficient production. For
faster turnover of eg. the performance of coal
capital stock. technologies improves over
time, reflected in their rising
plant load factor