Greenhouse Gas Control Policies in India
Overall GHG emission target and timing
The Minister of State for Environment and Forests Jairam Ramesh said in September 2009 that India might domestically set “broad indicative targets” for the 2020-2030 period for domestic policies, but that India would not take on legally binding targets internationally. In a United Nations summit meeting on climate change, he re-announced an intent to domestically legislate voluntary targets for vehicle fuel efficiency in 2011, building codes in 2012, and carbon capture and storage by 2020. The government also pledged that 20% of India’s energy would come from renewable resources by 2020, and 15% of India’s annual GHG emissions would be taken up by forests by 2030 (up from about 11% in 2005). The Indian government has pledged that its emissions per capita would always remain below those of the now-industrialized countries (though expected population increases are substantial). Decisions may be made by the Indian Parliament.
Principal Policy Instruments
To date, India’s national government relies almost exclusively on public information, training of energy auditors, voluntary “declarations” of energy management policies by businesses, and small financial awards as its principal instruments to promote energy efficiency. In concept, Ramesh has said that India might enact a law directing the government to set climate-related, but non-mandatory, targets, with reporting to and review by the Parliament. He has indicated that the new law may be similar to the Fiscal Responsibility and Budget Management law (FRBM), which directs the government to develop targets, and requires reporting to the Parliament, as well as Parliamentary approval. The targets in the FRBM are neither specified nor binding. Prime Minister Manmohan Singh approved in August 2009 a national energy efficiency plan that would require 714 energy-intensive industrial facilities in nine sectors, accounting for 40% of India’s fossil fuel use, to meet energy efficiency targets. The energy efficiency plan is estimated by 2015 to avoid about 5% of India’s projected fossil fuel use. The Prime Minister’s Office may be contemplating setting up a new National Climate Change Mitigation Authority under the Prime Minister’s authority.
Reportedly, the government has initiated greenhouse gas abatement plans in the past several months, including reforestation. An existing voluntary set of efficiency standards is expected to become mandatory by 2010. Stronger standards may be set for energy efficiency for certain appliances and government buildings; an Energy Conservation Building Code (ECBC) for all new government buildings; and monitoring of afforestation. India’s Prime Minister Singh announced in late August the intention of introducing an energy efficiency trading system to reduce India’s energy consumption by 5% and its CO2 emissions by 100 million tons annually from projected levels by 2015 (about 8% of current emissions). Two funds would be created with about $60 million of funding to provide partial loan guarantees and venture capital. Proposed targets may be set by December 2010.
In 2008, the Prime Minister released a National Action Plan on Climate Change, containing eight “national missions”: the National Solar Mission; National Mission for Enhanced Energy Efficiency; Nation Mission on Sustainable Habitat; National Water Mission; National Mission for Sustaining the Himalayan Ecosystem; National Mission for a Green India; National Mission for Sustainable Agriculture; and National Mission on Strategic Knowledge for Climate Change. The most concrete measures aimed at increasing solar energy capacity. In November 2009, the Indian Union Cabinet approved a Jawaharlal Nehru National Solar Mission (NSM) to increase India’s solar electric capacity from 5 megawatts (MW) to 20 gigawatts (GW) by 2022 (slipping back two years from the initial target date), at a cost of $19 billion. Some $900 million has been approved for the initial phase, to install 1.1 GW of on-grid and 0.2 GW of off-grid solar capacity by 2012.
The NSM will offer financial incentives to investors, including tax breaks, and will boost research. Several existing laws support renewable energy development, according to a report from the Pew Center.
The Electricity Act (2003) encourages the development of renewable energy by mandating that State Electricity Regulatory Commissions (SERCs) allow connectivity and sale of electricity to any interested person and permit off-grid systems for rural areas. The National Tariff Policy (2006) stipulates that SERCs must purchase a minimum percentage of power from renewable sources, with the specific shares to be determined by each SERC individually. The states of Himachal Pradesh and Tamil Nadu have the highest quotas—20% by 2010 and 10% by 2009, respectively. Under the Rural Electrification Policy (2006) electrification of all villages must be completed by 2012. India established a program to replace 400 million incandescent light bulbs with efficient compact fluorescents by 2012.
A fund supports the regeneration and sustainable management of forests. The initial capitalization of the fund was proposed to be $2.5 billion, with an annual budget of about $1 billion. Although India has some pollution control standards in place, enforcement of standards has been low. The current government is planning to establish a new National Environmental Authority, apparently to be modeled after the U.S. EPA.
Covered Gases and Sectors
Most identified and proposed measures address CO2. The proposed system of “tradable energy efficiency certificates” would apply to 714 energy intensive facilities in the following sectors: fossil fuel-fired electricity generation; fertilizer production; cement; iron and steel; chlor-alkali production; aluminum; rail transport; and textiles.
Allocation of GHG reductions to various sectors
The Bureau of Energy Efficiency would assign energy efficiency improvement targets to the most energy-intensive industrial plants, based on bench-mark performance “bands.” Facilities in the most efficient “band” would have a less stringent improvement target, while those in less efficient “bands” would be required to make greater improvements. Facilities that perform better than the targets would receive energy savings certificates (“ESCerts”) that could be sold to companies for compliance with their targets or, potentially, banked to meet future requirements. Facilities that fail to meet targets could be fined.
Regulations or exemptions specific to trade-sensitive sectors
Reportedly, Indian officials have suggested taxing imports based on the per capita carbon emissions of the exporting country. This could have a large impact on the United States, as its per capita emissions are higher than most countries. (Besides foods and fossil fuels, the United States exports to India a wide variety of products, among which the largest in value are: civilian aircraft and parts, steel and other metal products,synthetic fertilizers, chemicals, electronics and industrial equipment, electronics, and gem diamonds.)
Motor Vehicles: In India, high taxes are levied on motor fuels: 52% on gasoline and 32% on diesel in 2007. The Prime Minister’s office has directed the Bureau of Energy Efficiency to set fuel efficiency labeling standards for vehicles under the Energy Conservation Act, to become effective by 2011. However, after several years’ delay, these standards have not been set. As planned, the standards would require labeling only by 2011, with mandatory performance to be effective later. The Bureau of Energy Efficiency would certify the manufacturers’ labels.
Reportedly, some representatives of the automobile sector have demanded that the standards be set on the basis of CO2 emissions and legally be put on India’s list of “local pollutants.”
- ^ This section was prepared by Jane A. Leggett, Specialist in Environmental and Energy Policy, Congressional Research Service
- ^ http://economictimes.indiatimes.com/articleshow/5007545.cms?prtpage=1; a published interview with Ramesh provides greater insights into the minister’s thinking, at http://redgreenandblue.org/2009/07/06/no-funds-allocated-forclean- energy-climate-change-mitigation-in-indias-200-billion-budget/.
- ^ http://www.forbes.com/2009/09/23/jairam-ramesh-india-business-energy-climate-change.html.
- ^ http://www.thaindian.com/newsportal/india-news/indian-forests-absorb-11-of-annual-greenhouse-gas-emissionsjairam- ramesh_100240011.html.
- ^ See, for example, http://in.reuters.com/article/oilRpt/idINDEL15998520090907?pageNumber=1&; virtualBrandChannel=0.
- ^ http://www.indg.in/rural-energy/environment/national-action-plan-on-climate-change.
- ^ Ministry of New and Renewable Energy, “Statement of Dr. Farooq Abdullah on Jawaharial Nehru National Solar Mission – ‘Solar India’” November 23, 3009.
- ^ Pew Center, “Climate Change Mitigation Measures in India,” International Brief 2, September 2008.
- ^ http://online.wsj.com/article/SB125018657071529801.html.
- ^ Among many sources: http://www.business-standard.com/india/news/23-thermal-plants-not-complyingemissionnorms/ 01/09/69289/on.
- ^ http://www.business-standard.com/india/news/govt-to-reduce-water-air-pollution/365976/.
- ^ http://www.dw-world.de/dw/article/0,,4707051,00.html.
- ^ U.S. Census Bureau, Foreign Trade Statistics, http://www.census.gov/foreign-trade/statistics/product/enduse/exports/ c5330.html.
- ^ http://www.greencarcongress.com/2009/06/india-fe-20090603.html.
Note: The first version of this article was drawn from R40936 An Overview of Greenhouse Gas (GHG) Control Policies in Various Countries by Jane A. Leggett, Richard K. Lattanzio, Carl Ek, and Larry Parker, Congressional Research Service, November 30, 2009.
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