Evaluation of a Renewable Energy Scenario in India For Economic and Co2 Mitigation Effects

Renewable energy technologies (RETs) are attractive for sustainable energy supply and CO₂ mitigation. In this paper, a CGE model is used to analyze the effects of rapid reduction of costs of solar power generation, an important RET, in India. Alternate scenarios of cost reduction of solar power, hybrid scenarios with a carbon tax and a scenario of only carbon tax are compared with a reference scenario. Simulation results show that under such a scenario, high penetration of solar technology, economic gains, and modest emission reduction are achieved. The analysis shows that compared to accelerated solar technology scenario, a carbon tax achieves superior mitigation. Broad policy implications for developing countries are drawn in the context of global climate change debate.