Environment, GS-3, Uncategorized

Environment Digest – 24 April – 30 April 2016

[1] First damage, then fix?

Context

Recent Art of Living festival at Yamuna plain and widening of NH7 have done environmental damage

World Cultural Festival

The festival was held despite the National Green Tribunal (NGT) finding that clearances were faulty

NH7

“Very dense forests”, as per the classification of the Forest Survey of India, connecting the Kanha and Pench tiger reserves are being cleared for the widening of National Highway 7

Polluter Pays Principle

The Polluter Pays Principle (PPP) is an environmental policy principle which requires that the costs of pollution be borne by those who cause it. In its original emergence the Polluter Pays Principle aims at determining how the costs of pollution prevention and control must be allocated: the polluter must pay.

Under the PPP this was wrong action

  • Yamuna floodplain was flattened for an Art of Living-backed World Culture Festival; NGT gave its go-ahead to the festival after imposing an initial fine of Rs. 5 crore on the Art of Living foundation for damages caused to the plains
  • Thousands of trees were cut even before forest clearance was granted, It is alleged that undue pressure was put on clearing one portion of forest land (a 37-km stretch which is part of the Kanha-Pench tiger landscape) as the rest of the highway had already been broadened, the National Highways Authority of India was asked to make contributions to the Compensatory Afforestation Fund.

The glaring question is, do polluters pay so they can pollute further? Do we need to make distinctions in the way environmental compensation is meted out? What safeguards should we put in place to prevent violations of existing laws which get sanitised by compensation?

What the courts say

  • The courts stress that one cannot pay for the express purpose of polluting.
  • The polluter pays principle in effect says that if found to be environmentally damaging, the actor/developer needs to compensate people as well as bear costs of environmental restoration.
  • In effect, this also implies that the principle also does not mean that the polluter can first pollute and pay for it.

Question remains

Paying compensation gives some respectability to the polluter, while damage to the environment may not always get reversed.

[2] The future agenda for climate change

Context

The landmark Climate Change Agreement has been signed in New York last week by 171 countries, including India. Now the time has come to assess what has been achieved and what remains to be done.

Why is such an agreement imperative, more so for India?

  • Combating climate change is extremely important for India.
  • Global warming threatens changes in the monsoon and in snow melt in the Himalayas, adversely affecting the reliability of our water supply.
  • Monsoon variability along with higher temperatures threatens crop productivity.
  • Extreme events like floods and droughts (currently being experienced in Maharashtra) could become more frequent. This will affect the farmers and consumer at the same time.
  • Tropical diseases such as malaria could increase.
  • Coastal areas would be affected by a rise in sea level.

Agreement – a way out of the developed and developing countries conundrum of the past

The agreement has broken the deadlock that prevented progress for many years. Since global warming is caused by the growing stock of CO2 and other greenhouse gases (GHGs) in the atmosphere, primarily due to the burning of fossil fuels by industrialized countries, developing countries used to argue that it is the industrialized countries that must take action to reduce CO2 and GHG emissions. No obligations were, therefore, imposed on developing countries since 1992, when the United Nations Framework Convention on Climate Change (UNFCCC) negotiations began.

But it became increasingly untenable after China became the world’s largest emitter, but could still claim exemption from mitigation obligations because it was still classified as a developing country.

China took note of this and voluntary adopted the mitigation targets, and announced them in November 2014 as part of a bilateral agreement with the US.  Following this a year later in Paris all developing countries agreed to specify some mitigation targets in the form of Intended Nationally Determined Contributions (INDCs) which are incorporated in the agreement signed in New York.

India has promised a reduction in the emissions intensity of GDP by 33% to 35% from the 2005 base level by 2030. We have also targeted an increase in the share of non-fossil fuel-based electricity generation capacity from 12% of total electricity generating capacity in 2012 to 40% by 2030.

Is the agreement sufficient?

The agreement is important, but it is certainly not sufficient because what has been promised is not enough because :

Even if all the INDCs are fully implemented, the increase in global temperature will be around 3 degrees C above pre-industrial levels, which is much above the global target of limiting warming to 2 degrees C.

To limit global warming within the 2 degrees C, global emissions have to be reduced by approximately 70% by 2050. This will require the collaborative efforts of both the developed as well as developing countries.

  • Industrialized countries need to accelerate the pace of reduction in their emissions in the period after 2030. However, the political climate in these countries at present does not seem conducive to their taking stronger action.
  • Developing countries accounts for close to two thirds of total global emissions and since their GDP is expected to grow faster than that of the industrialized countries, their emissions footprint will become unsustainable if stronger mitigation action is not taken.It is estimated that if developed countries accelerate their pace of reduction without the developing countries doing so, the global temperature would soar around 6 degrees C which is catastrophic.

How to set fair targets?

It is good to start combating the climate change by voluntary mitigations but in the longer run, targets need to be set fair and square.This can be done by a Carbon Budget Approach.

Carbon Budget Approach

  • This aims at quantifying the amount of CO2 and other GHGs (on a CO2 equivalent basis) that can be pumped into the atmosphere from now onwards, consistent with limiting global warming to 2 degrees C.
  • This “carbon budget” must then be allocated across different countries in a manner which is seen to be fair, taking into account the ability of individual countries to bear the costs involved. Richer countries should obviously do more, including by contributing to meeting the financial cost of mitigation in poorer countries

It may be more practical to discuss these issues in a smaller forum such as the G20 to begin with. This group accounts for 80% of the world’s emissions, and if agreement can be reached here, it can then be taken to the wider UNFCCC forum.

Is a low carbon scenario feasible for India?

The scope for a low carbon trajectory for India has been explored in a joint study by Montek Ahluwalia, Nicholas Stern and Himanshu Gupta, using the latest India Energy Security Scenarios calculator published by NITI Aayog. The study has simulated the effect of (a) reducing energy demand in different sectors by shifting to more energy-efficient technologies and systems than in the business as usual (BAU) simulation and (b) increasing the contribution of renewable energy in the energy mix compared with the BAU.

The average growth rate of GDP is assumed to be 7.4% per annum up to 2047 in both the BAU and the low-carbon scenarios.

  • Business as Usual (BAU) Scenario

The BAU scenario leads to an increase in import dependence in coal from 18% in 2012 to 57% in the terminal year 2047 and in oil from 77% to 90%. This is unacceptable from the perspective of energy security.

The emissions trajectory is equally worrisome. Per capita emissions increase from 1.7 tonnes of CO2 equivalent in 2012, to 5.9 tonnes in 2047! This is two-and-a-half times the global target of 2 tonnes per capita, consistent with limiting global warming to 2 degrees C.

  • Low Carbon Scenario

It provides a much more sustainable prospect. Import dependence in coal falls from 57% in the terminal year in the BAU to 19%. In oil it falls from 90% to 60%.

Emissions are also much lower, with emissions per capita contained at 3.3 tonnes in 2047. This is above the target global average target of 2 tonnes per capita.

An interesting feature of our low-carbon results is that 85% of the reduction in emissions compared with the BAU is due to the measures taken to improve energy efficiency. Renewables have captured the public imagination, and they are indeed important, but it is increased energy efficiency that will be more important over the relevant horizon. This is in part due to the fact that our current energy efficiency levels are relatively low and there is room to catch up.

Is the low-carbon alternative that easy?

  • In the low-carbon alternative the capital costs are higher by about 3% points of GDP in the first 10 years after which the difference declines.
  • Higher capital costs could lead to lower investments in other sectors and lower GDP growth unless they are offset by faster improvements in productivity because of structural reforms.

This highlights the fact that productivity gains through reforms should be fully exploited.

Other Advantage of Low-Carbon Scenario

It would lead to much lower levels of air pollution. The latest World Health Organization list of the most polluted cities in the world shows that 14 of the 25 most polluted cities are in India, with Delhi at the top. Air pollution leads to a significant number of additional deaths and although it is not easy to quantify how much of this is due to fossil pollution, it is reasonable to conclude that moving to a low-carbon trajectory would yield substantial advantages in this area.

India as compared to China on emission reduction

China has announced that its emissions would peak in 2030. India has made no commitment on peaking thus far, but the issue cannot be avoided.

In the Ahluwalia, Stern and Gupta joint study referred to, we find that under the low-carbon scenario India’s emissions could peak by 2040. Since India in 2040 would have only half the per capita GDP that China will have by 2030, it means that although India would peak 10 years later than China, it could peak earlier in the developmental dimension, as measured by the level of per capita GDP.

We should recognize that peaking of our emissions is unavoidable if we are serious about combating climate change.

“Low Carbon” as a slogan has wide appeal and slogans have a role in capturing public attention. The real challenge, however, lies in identifying the specific policies that will achieve the results projected and mobilizing political support for them.

[3] Policies for low carbon development

Policies needed to achieve the low carbon outcome.

  1. Energy pricing must support energy conservation
  • Energy prices are critical for promoting energy conservation because even if energy-efficient options exist, they will be adopted only if they are cost-effective.
  • If we want to promote energy conservation, we should avoid energy subsidies and set prices at a level that covers full economic costs.
  • The Aadhaar platform, combined with financial inclusion, provides an effective mechanism for making the change.
  • This approach could be applied to both kerosene and cooking gas, which are still subsidized by the central government.
  • ‘Leaked’ kerosene is used to adulterate diesel, damaging the engines into which it is fed and increases the pollution load.
  • State governments also subsidize energy by underpricing electricity to farmers, which encourages excessive withdrawal of ground water, which in turn  has dangerously lowered the water table in Punjab and Haryana.
  • States should be persuaded to introduce a programme to increase electricity tariffs for agriculture in a phased manner over a number of years, earmarking the resources saved for promoting water-saving irrigation methods and much-needed water conservation in rural areas.
  • The central government could offer to match the funds mobilized through higher agricultural tariffs to expand watershed management programmes.
  1. Taxation to offset social costs of fossil fuels
  • The use of fossil fuels produces global warming and also local air pollution because of particulate matter released by thermal power stations and automobile exhausts.
  • What is needed is a global effort with all countries imposing a carbon tax at a globally calibrated rate.
  • If all countries join, there will be no competitive disadvantage for any individual country. We should be willing to join a global pact on this issue.
  • The appropriate level of the tax depends upon the estimated social cost of air pollution.
  • Any proposal to impose taxes will meet with opposition. We need to explain that the purpose of these taxes is to discourage the use of polluting fuels.
  • The resources mobilized by such a tax could, in principle, be returned to the community by lowering other taxes, but since there is a need to raise tax revenues to fund many socially desirable expenditures, it makes sense to use the revenues from the pollution tax for these, rather than lowering other taxes.
  1. Promoting energy efficiency in industry
  • Industry is the largest single user of energy and there is scope for increasing efficiency in energy use in industry.
  • As the world focuses on increasing energy efficiency, the scope for efficiency gains will increase.
  • One reason for energy inefficiency in Indian industry is the unreliability of grid power, which forces many smaller units to invest in captive electricity generation, which is much less energy-efficient than grid-based supply.
  • Improvement in the functioning of the electricity sector making captive generation unnecessary will improve overall energy efficiency.
  • This lies entirely in the domain of state governments.
  1. Energy conservation in transport
  • The transport of passengers and freight is another area which offers potential energy savings. Improved logistics would help by rationalizing the movement of freight and removing inter-state barriers and check posts with long waiting times.
  • The introduction of a well-designed goods and services tax would be a major benefit in this context.
  • As far as railways is concerned, we need to lower freight charges to attract traffic away from road transport, and raise passenger fares to reduce losses in this segment.
  • A Rail Tariff Regulatory Authority has been anno-unced, but has not yet been constituted.
  1. Energy use in cities: buildings and urban transport
  • Building design standards, which are set by state governments and local bodies, must be revised to make the buildings more energy efficient and also enforced in practice.
  • The central government on its part could announce that all new central government buildings will meet the highest green standards.
  • There is a need to upgrade the statutory minimum energy efficiency requirements for all major appliances in line with the latest technological developments.
  • These standards should be revised periodically to reflect new developments in these areas in the world.
  • Simultaneously, there should be aggressive use of labelling to push consumers to greater energy efficiency.
  • A great deal can be done to increase energy efficiency in urban transport through better land use planning to reduce the demand for transport and by encouraging a shift from private transport to public transport.
  • Positive measures to promote public transport will have to be accompanied by disincentives for the use of private vehicles.
  • A pollution tax on petrol and diesel will help.
  • An annual registration fee which is effectively an annual tax on car ownership would also help, as would the introduction of much higher parking charges.
  • The resources realized from these taxes should be earmarked to support public transport.
  • Electrification of vehicles is a key element in a climate change strategy not only because they are more energy-efficient and reduce local pollution, but also because the electricity will increasingly come from renewables, reducing total pollution.
  1. Pricing issues for renewable energy
  • The costs of solar energy have been falling and the latest bids for solar projects have produced solar tariffs that seem comparable to the price of conventional electricity supplied to the grid.
  • However, the supply of solar and wind energy is intermittent, and induction of large-generation capacity from intermittent sources into the system is only possible if the distribution companies contract balancing capacity for the lean period or there is scope for storing the electricity produced during the peak period and using it in the lean period to deliver a pattern of supply which matches the demand profile.
  • In both cases, additional costs have to be incurred. These will have to be passed on as higher electricity tariffs.

Conclusion

  • A number of policy interventions are needed in different areas to combat climate change. Some are in the domain of the central government, while others are in the domain of state governments.
  • Within each government, action often lies with different departments, each of which typically works in a silo, and achieving coordination across these different actors is often difficult.
  • Fortunately, all that has to be done doesn’t have to be done immediately.
  • However, five years from now, when the Intended Nationally Determined Contributions are reviewed in the climate change negotiations, we should be in a position to show substantial progress in all these areas.
  • For that, we need to start immediately to build public understanding about the need for these policies as part of the strategy to combat climate change.

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