Costs of Reducing Greenhouse Gas Emissions: A Case Study of India’s Power Generation Sector

Manish Gupta ()

No 2006.147, Working Papers from Fondazione Eni Enrico Mattei

Abstract: If India were to participate in any international effort towards mitigating CO2 emissions, the power sector which is one of the largest emitters of CO2 in the country would be required to play a major role. In this context the study estimates the marginal abatement costs, which correspond to the costs incurred by the power plants to reduce one unit of CO2 from the current level. The study uses an output distance function approach and its duality with the revenue function to derive these costs for a sample of thermal plants in India. Two sets of exercises have been undertaken. The average shadow prices of CO2 for the sample of thermal plants for the period 1991-92 to 1999-2000 was estimated to be respectively Rs.3380.59 and Rs.2401.99 per ton for the two models. These shadow prices can be used for designing environmental policies and market-based instruments for controlling pollution in the power sector in India.

Keywords: Marginal Abatement Costs; Distance Function; CO2 Emissions; Shadow Prices; Power Generation Sector (search for similar items in EconPapers)
JEL-codes: Q40 (search for similar items in EconPapers)
Date: 2006-11
New Economics Papers: this item is included in nep-cwa, nep-ene and nep-env
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

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Persistent link: https://EconPapers.repec.org/RePEc:fem:femwpa:2006.147

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