There is a seductive argument for a carbon tax in
India. But what should be the optimal tax rate?
A full blown analysis of emission mitigation opportunities are investigated taking into account a tax that increases in equal yearly increments of Rs 165 per tonne to reach Rs 2301 per tonne by 2030.
A full blown analysis of emission mitigation opportunities are investigated taking into account a tax that increases in equal yearly increments of Rs 165 per tonne to reach Rs 2301 per tonne by 2030.
The carbon tax has been found to be the most suitable way of bring down emissions in comparison to host of other measures, ranging from a road fuel tax to encouraging higher efficiency, power sector feebate, renewal subsidy, excise on electricity to a coal excise tax.
The impact of the carbon tax on the pricing matrices of various industrial segments in India is thoroughly investigated in the report and it has been found to be marginal.
The carbon tax will reduce energy-related CO2 emissions by about 8 percent and 22 percent below BAU levels in 2020 and 2030 respectively. These results are driven almost entirely by reductions in coal use, which account for 98% of the CO2 reduction and 2 per cent coming from the oil and gas sector
Does a carbon tax therefore necessarily lead to a higher usage of gas?
Source: Indian PetroPlus
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