Structuring of ecotaxes in India
Student name: Mr Rajat Verma
Guide: Prof Badal Mukhopadhyay
Year of completion: 2011
Host Organisation: National Institute of Public Finance and Policy
Supervisor (Host Organisation): Dr Kavita Rao
Abstract: Recently India has committed in Cancun Summit, December 2010, to reduce its emissions by 20-
25% by 2020 from its 2005 levels. Therefore there is a need to search for economic tools like
ecotaxation, tradable permits etc. for achieving this ambitious target. In this paper we have
explored the dimensions for structuring ecotaxes in India which is done by extensively reviewing
the literature in this area. The major objective of this paper is to get a better understanding of
eco/environmental taxation and to see how it can be structured in Indian context. This is done by
analysing conceptual issues in ecotaxation, drawing experiences from Netherlands, South Africa
and Mexico and reviewing the history of ecotaxation in India. The data regarding ecotaxes &
their revenue details in the above mentioned 3 countries is taken from OECD/EEA database. The
major findings from this paper are: India is still a beginner in this area and hence needs to learn
from other countries experiences. For making ecotaxes effective it should be levied at both
levels: centre and state. Coal and petroleum products are the two goods which should be
primarily targeted as they constitute the major proportion of the GHGs and are also not
regressive in Indian context.
