As governments seek ways to move their economies and societies towards sustainable development, taxation and expenditure policies are increasingly being recognized as important tools. Green Budget Reform refers to the coherent use of fiscal policy instruments to induce environmentally sound economic behaviour.

Research undertaken in this project followed two streams:
 
Sectoral assessment and analysis of budgetary and other policy instruments for addressing local environmental concerns in India.

Green budget opportunities in India
 
 Opportunites in the budget to address environmental concerns in the energy, transport
   and agriculture sectors.

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Development of analytical tools to facilitate the integration of environmental, social, and economic considerations in policy-making for the energy sector, tools that can be adapted and applied in other countries. Three such tools were developed.

FESA (Framework for energy sustainability assessment) 
   An analysis and communications framework for asessing progress towards objectives
   in sustainable energy development.

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Full-cost accounting of electricity
   Determining the real cost of electricity generation taking into account environment and
   health-related externalities.

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MARKAL(MARKet ALlocation) equity and compensation
    Models to study the impacts of climate change mitigation scenarios on lower income
    groups.

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