Renewable subsidies, higher tariffs on coal to result in lower emissions in India by 2030: Study

Washington, March 8

Combining renewable subsidies and higher tariffs on coal would lower the emissions by nearly one-third in India by 2030 compared to the current policies, according to a study carried out by two IMF economists.

The study, conducted by Margaux MacDonald and John Spray, notes that the two steps would also decrease coal imports by 14 per cent by 2030, thus increasing resilience to global changes in energy prices and improving energy security.

Released on Tuesday, the study observes that India has made significant progress towards meeting its emissions reduction targets under the Paris Agreement, but with current policies total greenhouse gas (GHG) emissions would nonetheless increase by more than 40 per cent by 2030.

While a modest increase in short-term emissions may be necessary to meet poverty reduction and energy security goals, a more rapid scaling up of current policies could help lower emissions considerably over the medium term and bring India closer to a path to net zero by 2070, it said.

The two economists said that their research shows an alternative emissions trajectory could be achieved by scaling up current policies.

“One of our proposals includes a gradual increase in subsidies on the use of renewable energy coupled with higher taxes on emissions, in addition to the many targeted policies that India has focused on,” it said.

This would have the added benefit of early reduction in the reliance on imported fuels, helping to ensure universal access to energy, and lessening the negative health effects of pollution.