Although India’s per capita emissions are still below world average, its aggregate emissions make it the third largest carbon emitting country presently. With further economic growth and development, it is imperative that India’s industry becomes more energy efficient and emits less carbon per unit of output.

India’s flagship instrument, the Perform, Achieve and Trade (PAT) scheme is a cap-and-trade program to reduce energy intensity of output in some industrial sectors. Using a nationally representative, establishment-level panel dataset, the study finds through a difference-in-differences analysis that this market-based program led to a reduction of 37 to 40 per cent in the energy intensity of output for the cement sector. But cement markets are characterised by high concentration such that impacts on treated plants might also affect untreated units, leading to biased results in the Potential Outcome Framework. The study thus develops a simple model that allows the researchers to compute treatment spillovers on the product markets.

Oliver Schenker is Robert Bosch Assistant Professor for the Sustainable Use of Natural Resources in the Economics Department at the Frankfurt School of Finance & Management. Before joining the Frankfurt School of Finance & Management, Oliver Schenker hold between 2011 and 2015 different positions at the Centre for European Economic Research (ZEW) in Mannheim, lastly as acting head of the department Environmental and Resource Economics, Environmental Management. During this time he, inter alia, co-coordinated a large European research project on the interaction of climate and energy policy instruments. He holds a Ph.D. from the University Bern. His research focuses on Environmental and Energy Economics. In particular, he is interested in energy and climate policy in emerging and developing countries and interaction between different policy instruments and their resilience to external shocks.

https://www.frankfurt-school.de/en/home/research/staff/Oliver-Schenker

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