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This paper explores the sources and magnitude of energy-inefficiency in the electricity generating sector in India and its implications for carbon emissions from this sector. An econometric methodology is developed to disaggregate and quantify the contribution of technical and institutional factors to this inefficiency. The analysis demonstrates the potential for institutional and economic policy reforms that provide incentives for the adoption of efficiency-enhancing production practices to reduce carbon emissions while increasing net electricity generation, even with the existing capital equipment.
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Khanna et al. (1999) studied this question.
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