OECD Development Centre Working Papers

The OECD Development Centre links OECD members with developing and emerging economies and fosters debate and discussion to seek creative policy solutions to emerging global issues and development challenges. This series of working papers is intended to disseminate the OECD Development Centre’s research findings rapidly among specialists in the field concerned. These papers are generally available in the original English or French, with a summary in the other language.

English, French

Clearing the Air in India

The Economics of Climate Policy with Ancillary Benefits

With the aid of a computable general equilibrium model, this paper estimates for India the magnitude of spillovers from limiting growth of greenhouse gas emissions to local air quality and the health of the urban population. The most important spillovers are reductions in emissions of particulates with associated declines in mortality and morbidity. By valuing these spillovers (or ancillary benefits), we can compare them with the welfare costs of climate policy, estimating that — on conservative assumptions — emissions could be reduced by somewhat more than 10 per cent from their 2010 baseline level without incurring net costs. With central estimates of substitution elasticities and willingness-to-pay for health improvements, “no regrets” abatement could reach around 17-18 per cent of baseline emissions. The analysis also permits assessment of the inter-regional variation in costs and benefits, finding that abatement costs are relatively low and ancillary benefits high in North and ...


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