Subnational implications from climate and air pollution policies in India’s electricity sector

Abstract

Emissions of greenhouse gases and air pollutants in India are important contributors to climate change and health damages. This study estimates current emissions from India’s electricity sector and simulates the state-level implications of climate change and air pollution policies. We find that (i) a carbon tax results in little short-term emissions reductions because there is not enough dispatchable lower emission spare capacity to substitute coal; (ii) moving toward regional dispatch markets rather than state-level dispatch decisions will not lead to emissions reductions; (iii) policies that have modest emissions effects at the national level nonetheless have disparate state-level emissions impacts; and (iv) pricing or incentive mechanisms tied to production or consumption will result in markedly different costs to states.