FISCAL INSTRUMENTS FOR ENVIRONMENT AND CLIMATE CHANGE: EXPERIENCES FROM INDIAN STATES

Research Team: Koyel Mandal, Rajesh Rangarajan and Chayan Badyopadhyay
LEAD Centre: Centre for Development Finance (CDF)
Focus Area: Environment & Climate Change
Project Geography: Tamil Nadu, Karnataka, Maharashtra
Partner: ClimateWorks Foundation
Status: Completed

Background:

Greenhouse gases (GHGs) and other pollutants impose negative externalities in the form of additional costs on the entire society. Given India’s voluntary domestic commitment to reduce emissions intensity of its GDP by 20-25% from 2005 levels by 2020, it is important for Indian States to adopt a low carbon growth path. The emissions of GHGs and other pollutants, if left to free market forces, are unlikely to be reduced on their own, thereby necessitating government intervention. Several States have adopted fiscal instruments to mobilize resources for promoting their low carbon growth plan. However, little is known about their operational mechanics and performance to date. This policy brief series compiles experiences from some of these States that have implemented fiscal instruments to address environmental and climate issues.

Related Resources
POLICY BRIEF – Akshaya Shakti Nidhi ( Green Energy Fund)- Karnataka
POLICY BRIEF – Financing instruments for addressing climate change and pollution: Lessons learned from Maharashtra
REPORT – Fiscal Instruments for Environment and Climate Change: Experiences from Indian States