The IMF Working Papers series is designed to make IMF staff research available to a wide audience. With nearly 300 released each year, working papers cover a wide range of theoretical and analytical topics, including balance of payments, monetary and fiscal issues, global liquidity, and national and international economic developments.
Spreadsheet models are used to assess the environmental, fiscal, economic, and incidence
effects of a wide range of options for reducing fossil fuel use in India. Among the most effective
options is ramping up the existing coal tax. Annually increasing the tax by INR 150 ($2.25) per
ton of coal from 2017 to 2030 avoids over 270,000 air pollution deaths, raises revenue of
1 percent of GDP in 2030, reduces CO2 emissions 12 percent, and generates net economic
benefits of approximately 1 percent of GDP. The policy is mildly progressive and (at least
initially) imposes a relatively modest cost burden on industries.