CO-BENEFITS OF INTERNALIZING LOCAL AIR POLLUTION COSTS IN INDIA’S POWER SECTOR

摘要

Reducing harmful effects on human health has attractedrnmuch attention in the large cities of developing countries.rnSome measures for decreasing local air pollution accompanyrnCO_2 emissions reductions. This paper estimates thernco-benefits of internalizing the marginal damage cost ofrnlocal air pollution as an environmental tax in India’s powerrnsector using a MARKAL model for the period 2006–rn2031. There scenarios are analyzed: business as usualrn(BAU), low tax, and high tax. Coal-based power generationrnis dominant and SO_x, NO_x, and CO_2 emissions increasernin the BAU scenario. When the marginal damagerncost of local air pollution is internalized to the powerrnsystem cost, the power system changes dramatically andrngas-based plants become dominant. SO_x and NO_x emissionsrndecrease significantly owing to the installation ofrntechnology related to desulfurization and denitration, andrnfuel switching. This occurs earlier in the high tax scenariornthan in the low tax scenario. CO_2 emissions increase inrnthe middle term as a result of the efficiency loss causedrnby desulfurization and denitration technology. The cobenefitsrnare found in the long term, as CO_2 emissionsrndecrease owing to fuel switching. Thus, when estimatingrnthe co-benefits of environmental policy, we should analyzernthe long-term effects.