Date of Submission


Date of Award


Institute Name (Publisher)

Indian Statistical Institute

Document Type

Doctoral Thesis

Degree Name

Doctor of Philosophy

Subject Name

Quantitative Economics


Economics and Planning Unit (EPU-Delhi)


Somanathan, E. (EPU-Delhi; ISI)

Abstract (Summary of the Work)

It is increasingly being accepted that the planet we live in is unable to fulfill the enormous resource demands that mankind places on it. As a result the environment we live in has undergone rapid changes in the last two centuries - changes that adversely affects human life. Long ago Thomas Malthus and more recently the Club of Rome researchers warned that rapid economic and population growth were going to be unsustainable as they are going to create an acute shortage of food and vital metals like mercury. Their predictions never passed the test of time (Sterner, 2003). However their ideas seem to hold true for ecological and environmental resources. The problem of overuse of global commons like earth’s atmosphere and hydrosphere and local commons like forests, groundwater reserves, grasslands are a reality in today’s world. The unfortunate fate of ecological goods is mainly due to the impure public good nature (rival but not excludable) of ecological goods and services. This ensures over-exploitation of such resources in a regulation free world as the economic man- an individual guided by self interest, does not internalize the externalities associated with such resource use. Hence the need of environmental policies to deal with situations of market failure in the realm of environmental goods and services. In addition to market failures, ill designed government policies are often an important reason for environmental problems. In the light of this, a economic study of various aspects of environmental policy is of great importance.This dissertation consists of three chapters, each of them dealing with a particular aspect of environmental policy. The first and the third chapters deal with the distributional effects of environmental policy making in South Asia. To the extent that our current environmental problems are outcomes of unsustainable economic growth, it is unethical to have environmental policies that have adverse distributional consequences. It is specially true for developing countries with unequal societies like India and Nepal. Opposition to environmental policies are often on distributional grounds. Hence studying the distributional effects of environmental policies are of importance.The second chapter of this dissertation deals with climate policy in a situation of dynamic inconsistency. Dynamic inconsistency in the context of climate policy refers to a situation where the policy maker cannot commit to a policy in future. The chapter shows how incentives to invest in research and development of green (emission free) technologies are affected by the presence of such commitment problems. It studies the role of various market instrumentsemission taxes, emission caps and investment subsidies, in creating incentives for R & D in green technology.I will now discuss each of these essays in brief by outlining the motivation and major results. In the chapters that follow, we discuss each of them in greater detail.


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Creative Commons Attribution 4.0 International License
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