This study examines the effects of the inclusion of the co-benefits on the potential installed capacity of carbon dioxide capture and storage (CCS) projects with a linear programming model by the clean development mechanism (CDM) in India's power sector. It is investigated how different marginal damage costs of air pollutants affect the potential installed capacity of CCS projects in the CDM with a scenario analysis. Three results are found from this analysis. First, large quantity of IGCC with CCS becomes realizable when the certified. emission reduction (CER) prices are above US$56/tCO(2) in the integrated Northern, Eastern, Western, and North-Eastern regional grids (NEWNE) and above US $49/tCO(2) in the Southern grid. Second, including co-benefits contributes to decrease CO2 emissions and air pollutants with introduction of IGCC with CCS in the CDM at lower CER prices. Third, the effects of the co-benefits are limited in the case of CCS because CCS reduces larger amount of CO2 emissions than that of air pollutants. Total marginal damage costs of air pollutants of US$250/t and US$200/t lead to CER prices of US$1/tCO(2) reduction in the NEWNE grid and the Southern grid. (C) 2013 Elsevier Ltd. All rights reserved.