Estimating economy: Environment linkages of emission mitigation in India

This paper examines the environmental impacts of India’s likely growth paths in terms of increased emissions of CO2 and PM10, and the feedback from those emissions on its economic performance.  These two-way linkages are examined for a Base Scenario as well as a Low Carbon Scenario, showing the co-benefits of the latter relative to the former.

The comparative static GTAP-CGE model is complemented with statistics on urban pollutants (from the national statistical sources) and productivity (from the literature). The model is ran consecutively for 18 years to develop economic and "environment corrected" economic scenarios to 2030.

In this analysis, PM10 emissions originate from fuel combustion and production processes. Preliminary findings forecast that the PM10 emissions will double in the next 18 years.

The first model runs reproduce the actual GDP growth rates in the country in the period 2004-2009 and the official projections to 2030.  They refer to a purely "economic baseline" where the health impact of the pollutants is not taken into account.

Second, within a Millennium Development Goals perspective; an “environment corrected” baseline is developed. This scenario assumes improved access to water and sanitation. Improved health indicators have a positive impact on the economic output through enhanced labor productivity and labor supply mechanisms. Their impact on GDP is estimated through the CGE model.

Finally, "low carbon growth" and “green growth” policies are simulated within the same framework and compared to the previous scenarios for policy recommendations.