GS-2, International Relations, Uncategorized

India signs agreement with IBRD

The Government of India and the World Bank have signed a US$ 9.2 million grant agreement under the World Bank-Global Environment Facility (GEF) Program for the Efficient and Sustainable City Bus Service Project to improve the efficiency and attractiveness of bus services in select Indian cities.

Key facts:

  • The project will demonstrate low cost high impact initiatives in efficient bus operations by focusing on modernizing city bus services through modern depots for improving the maintenance of buses; introducing modern Intelligent Transport Systems and Management Information Systems for better planning and management of operations; and by providing technical support to vehicles and drivers for better fuel efficiency, among others.
  • Demonstration cities where the various initiatives for improving city bus services will be undertaken are Mira Bhayandar in Maharashtra, Chandigarh, Jaipur, and Bhopal.
  • This project will complement the Government of India’s Bus Funding Scheme launched to promote public transport by supporting cities to modernize their bus services.
  • The initiatives for modernizing city bus transport services under this project will also help select cities reduce greenhouse gas emissions (GHG) while offering practical transport solutions.
  • The project is designed to specifically focus on identifying regulatory, institutional and fiscal constraints to operation of sustainable city bus services and address the weak capacity in the urban bus sector and facilitate the development of a vibrant urban bus sector community through the development of a comprehensive capacity building program.

Background:

The World Bank Group-Global Environment Facility (GEF) directly support actions to combat major environmental issues such as climate change, loss of biodiversity, polluted international waters, land degradation and desertification, and persistent organic pollutants, as well as stimulate green growth. The program supports an active portfolio of over 200 investments globally.

Environment, GS-3, Uncategorized

Renewables are not enough

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Summary:

World leaders, on April 22, ratified the global climate agreement reached in Paris last December. The agreement requires 195 countries to limit global warming to well below 2°C above pre-industrial levels, with the goal of not exceeding 1.5°C. The countries have also committed to “intended nationally determined contributions” (INDCs) to limit or reduce greenhouse-gas emissions by 2030.

About the agreement:

The Paris Agreement on climate change is a milestone in global climate cooperation. It is meant to enhance the implementation of the Convention and recognizes the principles of equity and common but differentiated responsibilities and respective capabilities in the light of different national circumstances.

  • The agreement acknowledges the development imperatives of developing countries. The Agreement recognizes the developing countries’ right to development and their efforts to harmonize development with environment, while protecting the interests of the most vulnerable.
  • The Paris Agreement recognizes the importance of sustainable lifestyles and sustainable patterns of consumption with developed countries taking the lead, and notes the importance of ‘climate justice’ in its preamble.
  • It seeks to enhance the ‘implementation of the Convention‘whilst reflecting the principles of equity and common but differentiated responsibilities and respective capabilities, in the light of different national circumstances.
  • The objective of the Agreement further ensures that it is not mitigation-centric and includes other important elements such as adaptation, loss and damage, finance, technology, capacity building and transparency of action and support.
  • Pre-2020 actions are also part of the decisions. The developed country parties are urged to scale up their level of financial support with a complete road map to achieve the goal of jointly providing US $ 100 billion by 2020 for mitigation and adaptation by significantly increasing adaptation finance from current levels and to further provide appropriate technology and capacity building support.

What’s good about this agreement?

  • Shared responsibilities: Unlike previous agreements which put all the responsibility for reducing emissions on rich countries, in the Paris Agreement, all 196 signatories agreed that every country must take action, while acknowledging that richer countries should start immediately and cut emissions more steeply, while poorer countries’ contributions will depend on their individual situations.
  • A “ratchet mechanism”: This is the technical term for the agreement to submit new pledges by 2020. It’s the most important victory within the agreement, as many large developing nations, like India and Indonesia, were reluctant to agree to a system that would pressure them to up their ambition within the next decade. The ratchet mechanism requires countries to return to the table in 2020 and spell out their plans for 2025 to 2030. This creates the opportunity for the world to potentially put itself on a course to stay below 2 C.
  • Ambitious abstract goals: The Paris Agreement includes the goal of keeping warming below 2 degrees C. But at the behest of the most vulnerable countries, such as the small island states, it also goes further, calling for efforts to stay below 1.5 C. It even requests that the Intergovernmental Panel on Climate Change produce a report on how we could stay below 1.5 C.

However, this agreement is far from sufficient. Why?

  • Various studies show that even if all INDC targets were achieved, the world would still be heading towards eventual warming of some 2.7-3.4°C above pre-industrial levels.
  • Over the past decade, energy productivity has grown by only 0.7% annually, and the share of zero-carbon energy rose by only 0.1 percentage point per year. Moreover, even if the INDCs were fully implemented, these annual growth rates would reach only 1.8% and 0.4 percentage points, respectively.

What needs to be done?

  • To keep warming well below 2°C, emissions in 2030 must be more than 30% below those envisaged in the INDCs. We must also reduce energy-related emissions by 70% from 2010 levels, with further cuts needed to achieve net zero emissions by 2060.
  • This will require both an improvement in energy productivity (the amount of income produced per unit of energy consumed) of at least 3% per year and the rapid decarbonization of energy supply, with the share of zero-carbon energy increasing by at least one percentage point each year.
  • Solar power can make a difference here. Solar power costs have fallen 80% since 2008. In some places, new supply contracts have set prices as low as $0.06 per kilowatt hour, making solar power fully competitive with coal and natural gas.
  • Investments in renewable capacity need to be matched by accelerated progress in battery technology, or by other tools to match electricity demand to intermittent supply.
  • Road transport and aviation, which currently rely almost entirely on liquid fossil fuels, account for 30% of total energy consumption. Decarbonization of these activities will require electrification or the use of hydrogen or biofuels.
  • Heating buildings is another area where major changes are needed. Here, the more widespread use of zero-carbon electricity, instead of fossil-fuel-based energy, could have a major impact. But there are also important opportunities to design and construct buildings and cities that are substantially more energy-efficient.
  • Energy use by heavy industry presents challenges that are often ignored. Metals, chemicals, cement and plastics are vital building blocks of the modern economy, and involve processes that cannot be easily electrified. Decarbonization may instead require the application of carbon capture and storage technologies, while newly designed building materials could reduce demand for carbon-intensive inputs.
  • Governments have a vital role to play, but so, too, do incumbent fossil-fuel-based energy companies and new-entrant companies deploying or developing new technologies. NGOs can help to identify required policies and hold governments and companies to account. Individual consumers are also important, because their behaviour shapes energy demand.

Conclusion:

The challenge now is to find an economically sensible path that enables emerging economies to fulfil their growing energy needs, while ensuring that the world meets its climate objectives. It is technologically possible. But it will require action by many very different actors. Unfortunately, climate change isn’t waiting. As the global temperature rises, glaciers are retreating, shrinking polar ice is threatening Arctic species, river and lake ice has been breaking up earlier, plants and animals are shifting ranges, and flowering cycles for trees are occurring earlier in the season. The signing of the accord, while historic, won’t solve those problems. It merely starts the world on the right, though very belated, path. The world needs to accelerate the pace.

Editorials, Environment, GS-3, Uncategorized

Cooling the earth down

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“Climate engineering” has been a buzzword in recent years. Environmentalists believe that climate engineering, along with reduction in carbon emissions, can greatly reduce global warming.

What is climate engineering?

Climate engineering, also known as geoengineering, describes a diverse and largely hypothetical array of technologies and techniques for intentionally manipulating the global climate, in order to moderate or forestall the (most severe) effects of climate change.

How is it being viewed currently?

Today, climate engineering efforts are viewed either as secondary measures to be undertaken alongside reducing emissions or as technologies which have not matured enough to warrant discussion by world leaders.

Climate engineering efforts can be divided into two categories:

  1. First, removal of Greenhouse gases from the atmosphere:

This basically involves management of carbon. A prominent example is carbon capture and storage (CCS), where some of the carbon dioxide (CO) being emitted by coal-fired power stations is recaptured by physically sucking it in and transporting it elsewhere to be sequestered underground.

Another method for removing CO from the atmosphere is to increase forest cover as plants will absorb some of the unwanted CO. Increased forestation is part of India’s strategy for reducing CO.

However, it is not clear whether CCS, reforestation and other carbon removal methods can make sufficient impact at the global level to significantly slow down global warming. But they seem relatively benign at the scale at which they are being considered now and will at least lower CO pollution locally.

  1. Second category involves Solar Radiation Management or Sunlight Reflection Methods (SRM):

This method aims to reduce the amount of heat trapped by greenhouse gases by reflecting sunlight back into space, either by increasing the reflectivity of the earth’s surfaces, or by deploying a layer of reflective particles in the atmosphere.

  • Among the techniques being considered under SRM are marine cloud brightening, cirrus cloud manipulation and stratospheric aerosol injection (SAI).

Stratospheric aerosol injection (SAI):

SAI, the boldest and also the most risky of climate engineering interventions, involves spraying into the stratosphere fine, light-coloured particles designed to reflect back part of the solar radiation before it reaches and warms the earth. SAI proponents claim that this could bring down the global temperature by as much as 1°C — a substantial amount in the climate change context. Many researchers have already verified this claim.

  • The optimal gases for injection, such as sulphur dioxide (SO), can be produced in abundance. Furthermore, just a few airplanes specially redesigned for the purpose may suffice for injecting the required aerosol into the stratosphere.
  • There are also precedents from nature. The 1991 volcanic eruption of Mount Pinatubo in the Philippinesinjected 20 megatonnes of SO into the stratosphere, cooling the globe significantly for a couple of years.

climate-engineering

Concerns:

  • However, SAI also has the potential for disastrous side effects, crossing national boundaries. The Pinatubo volcanic eruption is also said to have reduced precipitation, soil moisture, and river flow in many regions.
  • Also, injection of sulphur compounds into the stratosphere is likely to increase acid deposition on the ground and also contribute to ozone layer depletion. Apart from such “known unknowns”, there could also be, to use the catchphrase, the “unknown unknowns”.
  • Besides, once the aerosol has been injected into the atmosphere, it cannot be removed. Yet, if for any reason the injection, once begun, is discontinued prematurely, there can be rapid re-warming. That, ironically, could do more damage than the gradual global warming that we are seeking to combat.

Potential threats from SRM:

Worsening climate change may pressurize small nations to resort to using whatever SAI technology is available in the international market. In their desperation, possible harmful effects on other countries may not weigh heavily on their decision-making. Besides, just the fear of possible adverse side effects could lead to war between the nations.

How to deal with this problem?

One simple way to deal with this problem is to just ban further research in these fields. In fact, some climate scientists have already suggested this. They also fear that even the possibility of SRM interventions may undermine efforts to reduce carbon emissions.

Way ahead:

There are also few individuals who think that a blanket ban on SRM would be unwise and difficult to implement. Technology, benign or malevolent, has a way of continuing to advance.

  • The goal of SRM is to mitigate damage done by carbon emissions. If there is some chance of it succeeding safely, it would be unwise to abandon it at this stage.
  • Abandonment would also leave SRM technologies dangling midway, insufficiently tested or refined. That may nevertheless not deter some desperate climate change-afflicted nation from deploying it, leading to disaster.
  • It is only through continuation of responsible research in climate engineering, done under proper regulatory oversight, that the limitations and risks of such interventions can be fully understood and provide the basis for informed decision-making.
  • That will call for international governance mechanisms for overseeing the research and development and possible deployment of climate engineering techniques.

Conclusion:

The complexity of the issues associated with engineering the climate presents a challenge for shaping even the most basic research and engagements with the public and policy-makers today. It is difficult to predict how the debate on climate engineering will influence – or be influenced by – future developments in technology, the climate system, or the international order. While active climate engineering researchers have already been conscientiously worrying about these issues, it is not too early for the rest of us to start thinking about it.

Editorials, Environment, GS-3, Indian Economy, Science & Tech, Uncategorized

Budget’s Impact on Renewable Energy

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This Budget has laid down the roadmap for taking India to the next level of growth. We not only see a clear direction in which the economy is going to be steered but also the key milestones that we need to cross on the way. Finance Minister Shri Arun Jaitley has identified 9 pillars for having a transforming impact on the economy and life of people which were – Agriculture, Rural Sector, Social Sector (healthcare), Education, Infrastructure, Financial Sector, Governance and Ease of Business, Fiscal Discipline, Tax Reform. The Budget was presented in the backdrop of an improving rural sector and infrastructure expansion; which were two of the prominent features of the Finance Minister’s Budget speech.

What’s in it for the Renewable Energy Sector?

The government has allocated an outlay of above Rs.10,000 crore for 2016-17 for the renewable energy sector. This outlay includes Rs.5,000 crore from the National Clean Energy Fund (NCEF) with the balance coming from Internal & Extra Budgetary Resource (IEBR).

  • A significant part of viability gap funding for solar power projects is intended to be financed out of such cash outlay.
  • The finance minister, in his speech, also mentioned diversification of sources of power for long-term stability and outlined his endeavour to augment investment in nuclear power generation in the long term. Changes have been proposed in the public-private partnership (PPP) mode to revive development of infrastructure.
  • On the taxation front, the clean environment cess on coal, lignite and peat has been doubled from Rs.200 per tonne to Rs.400 per tonne; encouraging the use of renewable sources of energy.
  • Other proposals include extension of benefit of additional depreciation to businesses engaged in the transmission of power and exemption of capital gains arising on account of the appreciation of the rupee against a foreign currency at the time of redemption of rupee-denominated bonds.
  • The final road map for phasing out of tax incentives has also been rolled out. No profit-linked incentives have been extended to the power sector, or renewable energy in particular.

What has been done so far for the Renewable Energy Sector?

At the UN Climate Change Conference held in Paris in 2015, India put forth its strong commitment towards clean energy and announced its climate change plan, i.e. Intended Nationally Determined Contribution (INDC) setting targets for domestic efforts against climate change.

  • Among other initiatives, key targets are 40% power installed capacity from non-fossil-fuel-based energy resources and reducing emissions by 33-35% of its GDP by 2030.
  • India’s INDC also sets a target of achieving 175 gigawatts (GW) of installed capacity of renewable energy—including 100GW of solar power and 60GW of wind power.
  • India also launched the International Solar Alliance (ISA), a coalition of solar resource-rich countries, to address energy needs and common concerns.
  • The Renewable Energy Global Investment Promotion Meet and Expo (RE-INVEST) organized in February 2015, received satisfactory response from global investors. India also signed an MoU with Germany to promote solar energy.
  • The government has also launched programmes, including the Green Energy Corridors, a nationwide transmission grid dedicated to power generated from renewable energy projects; setting up of 25 solar parks with a capacity of 50MW each; ultra-mega solar power projects scheme; and the viability gap funding scheme for setting up solar power projects by offering project developers capital cost support.

What’s holding India back from achieving the stated renewable energy targets?

A challenge remains in the capital funding required for such capacity expansion. With the finance minister deciding to stick to fiscal consolidation and reining in the deficit, India’s ability to further access debt resources is limited, due to an existing high debt ratio.

What else needs to be done to improve the energy sector (Renewable in particular)?

  1. Solve policy lag:

A lot of financing lined up for the deployment of wind and solar projects is stuck. This is due to lack of clarity at the individual state level on tariffs and policies preventing the execution of power purchase agreements (PPAs) in a time bound manner. This problem should be addressed soon.

  • Also, the renewable transition continues to be mired with litigation, discom financials and policy lag. Stressed projects are today a cause of systemic concern and there is a need to ensure that tribunal rulings are more or less binding and that going to courts is more a matter of exception than de rigueur.
  1. Capital allocation and incentives:

The extension of the 10-year tax holiday, inclusion of electricity under GST and clarity on domestic content requirement for renewables would help reduce the end cost of electricity to the consumer.

  • UDAY (Ujwal Discom Assurance Yojana) has the potential to transform the discom landscape but needs clear visibility on capital allocations and time bound focus on separation of content and carriage if the one off projected gains are to be sustained over a longer time frame.
  • Incentives and rebates should be given to the consumers to make solar an attractive and viable option. The solar rooftop industry will certainly need better non-recourse financing options by increasing power sector exposure limits of domestic banks.
  1. Need government reforms:

The government needs to design reforms in terms of pushing the initiative of biomass plants and more in 2016. Countries like Japan and India have identified a huge opportunity to further the energy cooperation across the energy value chain. The government needs to design reforms in terms of pushing the initiative.

  1. Push for solar power generation:

Also, the need of the hour is to create an effective ecosystem to enhance solar power generation capacity across India. While talking about rooftop solar in specific, extension of tax holidays, waiver of electricity duty and banking charge for solar rooftops, activating Renewable Energy Certificates (REC) benefits for rooftop projects and captive projects will certainly motivate more rooftop installations to come-up in cities and towns.

  1. Other reforms:

Enforcement of net metering guidelines across states and renewable purchase obligations, strengthening of grid infrastructure to accommodate intermittent solar power, and promoting storage solutions by way of incentives, subsidies etc.

Conclusion:

The recent budget appears to be focusing more on administrative issues within the limits of fiscal prudence, like providing a legal framework for dispute resolution in PPP projects and measures to curb litigation in order to promote a non-adversarial tax regime. However, in order to provide a fillip to the sector, especially in view of the ambitious targets for capacity enhancement set by the government, it should consider implementing the above mentioned reforms.

Editorials, Environment, GS-3, Uncategorized

Decoding Emission Norms

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The Centre’s decision to adopt Bharat Stage VI automotive fuels nationwide by April 1, 2020 is a key measure that can, if implemented properly, vastly improve air quality. It also fits in with commitments made at the Paris climate change conference.

  • In November, the government had put in public domain a draft notification for implementation of BS-V and BS-VI emission norms for the automobile sector, covering the four wheeler category.
  • Implementation of the BS V standard was earlier scheduled for 2019. This has now been skipped. BS VI, originally proposed to come in by 2024 has been now advanced to 2020, instead.

What are Bharat norms?

Introduced in the year 2000, the Bharat norms are emission control standards put in place by the government to keep a check on air pollution. Based on the European regulations (Euro norms), these standards set specifications/limits for the release of air pollutants from equipment using internal combustion engines, including vehicles. Typically, the higher the stage, the more stringent the norms.

  • The BS IV norms were introduced in 13 cities apart from the National Capital Region from April 2010. Currently, BS IV fuel is being made available across the country in stages, with the entire nation expected to be covered by April1 2017.

Why is it important to upgrade these norms?

Upgrading to stricter fuel standards helps tackle air pollution. Global automakers are betting big on India as vehicle penetration is still low here, when compared to developed countries. At the same time, cities such as Delhi are already being listed among those with the poorest air quality in the world. The national capital’s recent odd-even car experiment and judicial activism against the registration of big diesel cars shows that governments can no longer afford to relax on this front.

  • With other developing countries such as China having already upgraded to the equivalent of Euro V emission norms a while ago, India has been lagging behind.
  • The experience of countries such as China and Malaysia shows that poor air quality can be bad for business. Therefore, leapfrogging to BS VI can put India ahead in the race for investments too.

BS-VI Norms:

  • The particulate matter emission in BS-V and BS-VI is same for diesel cars though it is 80% less than BS IV.
  • The nitrogen oxide (NOx) level is, however, 55% less in BS-VI over BS-V which in itself is 28% lower than BS IV.
  • The sulphur content in fuel norms for diesel and petrol under both BS-V and -VI standards does not change at 10 ppm, though it is substantially less than 50 mandated for both the fuels under BS-IV.

bharat-stages

 

 

Why we need these norms?

Major pollutants such as fine particulate matter, sulphur dioxide, nitrogen oxides and carbon monoxide emitted by millions of vehicles on India’s roads are severely affecting the health of people, particularly children whose lungs are immature and hence more vulnerable.

  • Thousands of premature deaths and rising rates of asthma episodes highlight the urgent need to make a radical and complete shift to modern fuels and vehicle technologies.
  • Past national policy of implementation of the BS IV fuel standard also failed primarily because this was not done all over the country and the technical standard also permitted a higher level of sulphur in the fuel.
  • Higher sulphur results in high volumes of fine respirable particulates measuring 2.5 micrometres (PM2.5) being generated in emissions.
  • Since even this obsolete standard was not followed uniformly, many vehicles, especially commercial passenger and freight carriers, have been using lower standard fuel supplied outside big cities. This has rendered their catalytic converters incapable of absorbing pollutants.

Other factors affecting the air quality in the country:

Improved air quality, especially in big urban centres, depends on several factors in an era of fast motorisation.

  • A bloated population of vehicles using fossil fuels has affected travel speeds, worsening pollution levels.
  • Poor civic governance has left roads unpaved and public spaces filled with debris and construction dust, constantly re-circulating particulate matter in the air.
  • Moreover, the monitoring of diesel passenger and commercial vehicles – the biggest contributors to total emissions – for compliance with emissions regulations remains poor.
  • Even, the distortions in urban development policy that facilitate the use of personal motorised vehicles rather than expanding good public transport, walking and cycling, are glaring.

Challenges before the government:

The government could face two key challenges in implementing the decision.

  • First, there are questions about the ability of oil marketing companies to quickly upgrade fuel quality from BS-III and BS-IV standards to BS-VI, which is likely to cost upwards of Rs 40,000 crore.
  • Second, and more challenging, is the task of getting auto firms to make the leap. Automakers have clearly said that going to BS-VI directly would leave them with not enough time to design changes in their vehicles, considering that two critical components — diesel particulate filter and selective catalytic reduction module — would have to be adapted to India’s peculiar conditions, where running speeds are much lower than in Europe or the US.
  • Also, the rollout model of introducing higher grade fuel and vehicles first in the cities has fundamental drawbacks, as was evident in the BS-IV implementation. In the periphery of designated BS-IV cities, BS-III vehicles could be registered; BS-IV vehicles (especially heavy vehicles) were more expensive, and BS-III fuel was cheaper than the BS-IV equivalent. And interstate trucks and buses, the biggest polluters, were forced to stay on with BS-III engines simply because the fuel outside cities did not conform to BS-IV norms.

Implications:

  • The three parties that are impacted by this decision are automobile, auto-components and petroleum refining companies. According to the government, oil PSUs would need to invest Rs 28,750 crore for the upgrade.
  • The problem for the automobile companies is a bit more complicated. Cars made by European and Japanese companies in India already comply with tougher fuel norms since these are exported to European nations. The problem lies with cheaper cars that cater largely to the domestic market.
  • Also, it will take at least three years of on-road testing with BS-VI fuel before cars can be cleared. That has more to do with Indian weather, traffic and road conditions.

What will change after the new norms kick in?

BS-IV norms are currently followed across 63 Indian cities for petrol and diesel. The BS-IV compliant fuels have sulphur concentration of 50 parts per million (ppm). This will come down to as low as 10 ppm in BS-VI compliant fuels and auto engines. This means a lower level of harmful emissions and reduced incidence of lung diseases.

  • The switch to BS-VI norms will also reduce concentration of carbon monoxide, unburnt hydrocarbons, nitrous oxide and particulate matter from emissions.
  • Finally, the quality upgrade will also result in diesel’s cost of production going up by 63 paise per litre and petrol by Rs 1.40 per litre. The switch will also make petrol vehicles costly by Rs 50,000 and diesel vehicles by Rs 1 lakh.
  • For consumers, this translates into higher retail prices of petrol and diesel.

Conclusion:

Rolling out the BS VI standard nationally, skipping BS V, has significant cost implications for fuel producers and the auto-mobile industry, but its positive impact on public health would more than compensate for the investment.