India Sustainable Growth Hub (ISGH) Research Priorities

For firms, we emphasise projects that look at investments that can raise firm productivity and lower externalities. This includes understanding the effects of various environmental policies on firms.   

1. Identify constraints to technological advancements in firms, especially with respect to green innovation.
2. Measuring the cost pass-through to consumers and the supply chain impacts of domestic or international environmental regulations.
3. Understanding how exposure to climate shocks varies by firm size and what adaptation strategies firms pursue.
4. Compare the effectiveness of demand-side vs. innovation/production-side subsidies in promoting green sectors.
5. Analyse the impact of rising average trade tariffs on industries like transportation, electronics, plastics, and textiles, focusing on environmental implications, innovation diffusion, and technology transfer.
6. What will be the implications of the EU’s carbon border adjustment mechanism (CBAM) or deforestation regulation (EUDR) for Indian industries?
7. Evaluate the role of large firms in protecting employees against extreme weather events, including labour absorption and upskilling.
8. Temperature and other climate impacts on the informal sector.   

Because the nature of environmental externalities involves a market failure, there is a key role for the state to be involved in facilitating sustainable growth.  

1. How does political representation affect environmental outcomes? Does a politician's identity or background matter?
2. What is the role of information in engendering support for green issues and holding politicians accountable?
3. Redesigning social protection for climate change: piloting risk insurance against heat, climate migration, cash transfers, etc.
4. Role of non-state actors in climate adaptation, conservation, and disaster relief: e.g.  Gurdwara committees against crop burning, early-warning systems, etc.
5. How should public finance systems be designed to facilitate a greater flow of transfers to those affected by climate shocks?
6. What institutions are needed to help attract climate finance?
7. What is the role for an emission trading scheme or other price instruments?
8. Early warning systems and other mechanisms to limit the impact of extreme weather events.

Cities, done right, can be havens for climate resilience. Done poorly, they can amplify vulnerabilities for those in poverty.   

1. Public services offered in urban areas mediating the effect of climate shocks, e.g. does better housing mediate the effect of heat on labour supply?
2. Seasonal and permanent climate migrants
3. Balancing supply and skills mismatch of seasonal labour with industry demand for more permanent labour
4. Potential to match based on the time horizon of migrants' vs time horizon of industry, rather than matching on skills as everyone is effectively unskilled.
5. Transportation policies to reduce externalities
6. EV infrastructure, subsidies for procurement of hybrid/EV buses, etc.
7. Expansions in road quality and infrastructure, especially outcomes associated with green infrastructure
8. Public transportation interventions
9. Disaster preparedness (e.g. flooding) of cities
10. Housing interventions that help shield those in poverty from extreme heat. More broadly, interventions that assist in urban cooling.

This theme emphasises how India can source the energy to power its growth and how it can best preserve its threatened natural assets.  

1. Design and evaluation of policy instruments and regulation for reducing environmental externalities, e.g. creating pollution markets or incentives for reducing crop burning
2. Policies to support the integration of renewable electricity and storage onto the grid.
3. Interventions aimed at better understanding and improving the integrity and governance of voluntary carbon markets
4. Measuring the impacts of damaging ecosystems and biodiversity and how to value and protect this element of natural endowments
5. Food-energy-water nexus (i.e. agriculture, power, groundwater depletion)
6. The role of energy markets in the diffusion of renewables, including evaluations of contract designs for power purchase agreements (PPAs).
7. Interventions aimed at enhancing the fiscal health of the power sector, such as those that seek to reduce electricity theft
8. Payments for Ecosystem Services (PES) and other incentives to reduce crop burning and deforestation
9. Understanding how fiscal and monetary policy can be adapted to support green transitions—this includes the role of climate-informed budgeting, inflation targeting, green public investment, carbon taxation - in managing climate-related financial risks and supporting low-carbon growth.

This theme focuses on the macroeconomic risks and opportunities posed by climate change, and how India can align economic stability, growth, and its green transition. The ISGH is keen to support rigorous research that deepens our understanding of the complex links between climate change and macroeconomics, an area that remains both critical and underexplored. 

1. Understanding fiscal, monetary, and industrial policy tools for managing climate-related shocks and promoting green growth
2. Evaluating the growth and distributional consequences of climate shocks, carbon pricing, green industrial policy, and climate-linked subsidies or taxes
3. Studying the macroeconomic implications of global climate regimes (e.g., CBAM, Article 6 mechanisms) for India’s trade, capital flows, and competitiveness
4. Integrating climate risks into macroeconomic models, including Environmental-DSGE (E-DSGE) and structural macro-modelling frameworks
5. Understanding climate finance instruments, including transition finance, green bonds, and sovereign guarantees for low-carbon infrastructure
6. Designing macroprudential policies to address climate-induced financial instability and credit risk.

We welcome proposals that involve the creation of broadly useful and policy-relevant datasets, particularly those leveraging novel data sources (e.g., satellite imagery, administrative data, surveys) and methods (e.g., machine learning) to answer important research questions that are aligned with our focus areas explored above. 

We especially encourage proposals that will generate reusable data assets.