Global warming is a universal problem nowadays. The recent United Nations Climate Change Conference in Copenhagen was partially successful because all participating countries realised the damages caused by greenhouse gas (GHG) emissions and promise to mitigate in the future course of time. India has also promised to reduce 20% to 25% of these emissions up to the year 2020. To implement this, there is a need of solid policy formulation and alternative methodologies. This paper presents the introduction of carbon tax in Indian power sector to mitigate the GHG emissions. Three scenarios with different carbon taxes and various energy saving cases have been developed using MARKAL energy system model. The simulation results show that full exploitation of energy conservation potential with 30% carbon tax lead to a sustainable development. About 72% CO
emission will be reduced in the year 2045 as compared to the base case scenario. Other scenarios also show significant reduction in atmospheric emission.
Keywords: power sector, India, MARKet ALlocation, MARKAL, CO2 emissions, carbon tax, energy efficiency, electricity generation, carbon emissions, carbon dioxide, global warming, greenhouse gases, GHG emissions, energy saving, simulation, energy conservation, sustainable development, sustainability