In this concluding part of his extended interview to Business Standard, Environment Minister Jairam Ramesh talks of his agenda for greening Indian industry: new energy efficiency norms for industry, applying a new environment index at industrial clusters, and the like. Excerpts
What is the scope of your green plan for industry?
The big thing we are awaiting is the national energy efficiency mission, which we have announced. The amendments to the Energy Conservation Act are now awaiting parliamentary approval. We are introducing a market-based mechanism for energy efficiency — a cap and trade system, so to speak. In nine energy-intensive industries, like cement, fertiliser and refineries, the best-practice energy consumption norms are stipulated. An energy-efficiency certificate is to be introduced, as a legal sort of tender, mandated under the Energy Conservation act. Say there’s a company meeting these standards by a substantial amount and there are companies well above the standards by a substantive amount. You create an internal market for trade in the certificate.
There is an auditing issue here, because there is no reliable way of auditing who meets the norms.
There are 714 energy-intensive units for which we will have the norms set. It’s a new era we are entering. To my mind, it is the only system which will work. We are not a country where you can close down units.
Internationally, the carbon trading thing is no longer seen as such a great idea.
This is not carbon trading. The metric is not carbon emissions. The metric is energy consumption. This is a big step forward that we’ve taken. The Bill has been introduced, the amendments are there. I expect by the end of the Budget session these amendments will be passed. By the middle of the year, the whole process of creating market-based mechanisms will fall into place.
Tell us about these industrial clusters that you have rated on environmental quality.
We got IIT Delhi and some other independent institutions to study where we are on environmental quality in 88 clusters. We looked at air pollution, water pollution and land pollution. Based on the results, we devised a Comprehensive Environmental Pollution Index, which we will update every year.
The second part is to devise intervention. There has been a failure on the part of State Pollution Control Boards to monitor environmental quality. The infrastructure has not kept pace with industrial expansion. I have been to Vapi and Ankleshwar, which are the most polluted clusters. A simple thing like the drainage system has not kept pace with the expansion. Units have proliferated, but the basic infrastructure provided for in the mid-60s and 70s has not expanded. What you see in Vapi is red-colour effluent getting into the soil or municipal drains. It is a complete failure of environmental management.
What corrective steps are you taking?
I’ve had a chat with the finance minister. I said the primary responsibility of environmental management in these clusters is of private industry. However, there are many cases in which you will need common service facilities. You will require infrastructure facilities. I suggested we create a financial corpus – Rs 500 crore to begin with. This money from the Centre will stimulate state governments to participate, industry to participate, banks and financial institutions to participate. It is the Centre that seems to be more concerned with the environment than states. States are more concerned with growth, investment and employment.
What about the plans to encourage green buildings?
Buildings will be a very important contributor to our emissions. If you see the modern service economy, it is turning out to be as energy-intensive as conventional manufacturing. That is because of the way buildings have been designed. In the United States, the building sector is responsible for 35 to 40 per cent of greenhouse gas emissions. We are not in that league as yet. As the service economy modernises, as urbanisation increases, as per capita income goes up, as prices of ACs fall, we will be in a situation where the building sector will play a very important role.
The most important thing is to have codes that are best practice in terms of energy consumption and emissions. We have introduced codes called the GRAHA. There is an international code called LEAD. India’s most efficient (from an emissions point of view) public building will be the new ministry of external affairs, which will be commissioned by June. Our ministry’s own office building, which will be commissioned by November 2011, will reduce energy consumption by 50 to 60 percent. There are similar buildings in Gurgaon – the Wipro office building, the ITC building, the Teri University. The bulk of the construction activity in states is in municipal building codes. If we are able to show what can be done at the Central level, the demonstration effect of these buildings will ensure that private buildings that get permission under various energy codes will also be energy compliant.
Don’t such buildings raise costs?
For our building, we are looking at Rs 100 crore. What it would have cost had we not taken in all these features, that exercise we have not done, though it would be an interesting exercise. What the corpus will do is to fund activities such as a common effluent treatment plant.
With all that you are planning, will you reach your emission reduction targets?
With our eyes closed, we will reach 20 per cent. Many of these actions are in various stages of implementation. I expect the low carbon economy group to come up with a few more suggestions. We have many studies to show we can do better.
You have said that India has no data on emissions intensity beyond 1994. If so, what is the basis for your targets?
We have internationally-used data. The only source of comparable data is either Energy Administration of the US or the International Energy Agency in Paris. They use our Economic Survey and sectoral surveys and calculate.
Why don’t we have our own data beyond 1994?
Our whole approach to climate change has been dictated by international negotiations. Our mindset is, does the UNFCCC demand it? By May of this year, we will have an emissions inventory for 2007. The ballpark numbers will not change. From then, we will keep updating once in two years.
The Chinese are now among the top solar companies. Can you explain this, and where do we stand?
Of the top 10 solar companies, four are already Chinese. China has strategically decided that they want to be world leaders in green technology by 2020. China has 12,000 Mw of wind-based energy, whereas India has 8,000 Mw. Five years ago, India was ahead of China. The Chinese are selling super-critical technology for coal-based power generation. The Chinese have grasped this as a strategic opportunity. Japan is also trying to recover the technological leadership that it lost in the 80s. They are also betting in a big way on green technology. It’s not the United States, but Japan and China that will be the drivers of technology on coal-based power, wind, solar energy.
(The earlier parts of this interview were published on January 15 and 16)