higher – potentially considerably higher. In evaluating the environment-growth tradeoffs, accordingly, a judgment must be made about the size and availability of such ―low hanging fruit‖ and appropriate incentives.

37. Both Green Growth scenarios have other important benefits. Most significantly they reduce CO2 emissions, which have an important value. If we take that value at even a modest US$10 per ton, reflecting what might be gained in revenues from participation in emerging carbon abatement markets, India could realize an additional benefit of around US$59 billion (with a PM10 tax). Global carbon models estimate that these emissions could be worth much more—US$50-120—by 2030. The green growth scenarios have other environmental benefits we have not included, especially in the areas of natural capital [elaborated in the companion paper, ―Valuation of Biodiversity and Ecosystem Services.‖]. Finally the Green Growth scenarios produce benefits for all: i.e. they have distributional advantage over the conventional scenario.<sup>23</sup> 38. The findings and conclusions of this study and the use of the CGE model should also be considered in the context of various assumptions/limitations.

- Only particulate emissions were analyzed; other local environmental issues were not considered.

- The baseline PM10 and other particulate emissions used in the CGE model were obtained from the IIASA literature on India and were not based on actual measurements.

- The CGE model did not separate health services from overall public services as an economic sector. The expected expansion of health services to address the increasing environmental health issues was not separately covered.<sup>24</sup>

- The CGE model has a medium- to long-term structure and therefore could not cover short-term fluctuations, e.g. oil price volatility.

- Both production sectors (57) that cover agriculture, manufacturing,  services, and households were represented as  prototypes; thus the distributional environmental health impacts on different economic strata and geographic locations were not taken into account.

39. The study shows that the CGE model could be used as a tool for policy making. Being a general equilibrium open economy model, its strengths lie in the representation of inter-sectoral linkages both within and outside the country. At an economy-wide level, the CGE model makes it possible to determine whether growth objectives are compatible with the environmental objectives. The management of pollutants at the sectoral level can also be used to determine the abatement costs across the sectors. Distributional implications (winners vs. losers) among the sectors could also be analyzed.

40. Further work using the CGE model after correcting for environmental health impacts would be useful in policy making. The present approach has the flexibility to incorporate multiple scenarios, e.g. the various scenarios in Parikh (2009) to

> 23 Improving air quality is a public good. Even if poor air quality affects all equally, an improvement has a bigger proportional benefit to the poor. And there is evidence that the poor are more affected by air pollution.

> 24 Health services are in the same category as education and defense: public services. They are separated from other services provided by the private sector such as trade, transport etc

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