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Policy heats up

India is finally taking climate change seriously

Business Standard  |  New Delhi 

The increasing concern among policy makers about is evident from the pre-Budget for 2011-12, read together with the report of the Planning Commission’s sub-group for in the 12th Plan, and the earlier for The 12th Plan (2012-17) will have to pay heed to the challenges thrown out by in charting sustainable development. The sooner India faces up to them, the less the damage will be — although the costs will be substantial in any case. The Indian government already spends 2.8 per cent of on programmes that have mitigation and adaptation relevance. Taken together, various climate change-related missions will cost well over Rs 2.5 lakh crore over the 12th Plan period and beyond.

Over half of India’s population is agrarian and monsoon-dependent. The National Mission for will spend Rs 1.08 lakh crore by 2017 to introduce heat-resistant crops and create new credit and insurance mechanisms and strategies aimed at making agriculture resilient. The focus is food security and the protection of land, water, biodiversity and genetic resources. The Green India Mission will spend Rs 46,000 crore to cover 10 million hectares over the next 10 years. In addition, there must be contingency strategies and disaster relief plans, given a likelihood of more frequent floods, droughts and cyclones. Healthcare could also be more challenging, given a greater incidence of vector-borne diseases like malaria.

But mitigation is secondary, if important. The primary task is to enable nine per cent growth without raising greenhouse-gas emissions. Growth is associated with urbanisation as well as higher transport and power use. India needs to increase its power capacity to 377 GW (from the current 172 GW) to sustain nine per cent growth till 2020. It is also committed to reducing emission intensity by 20 to 25 per cent from 2005 levels, by 2020. Estimating costs of wholesale changes to achieve the desired energy mix is difficult. The relative costs of cheap, dirty fuels like coal versus clean, expensive alternatives may change for several reasons. The National Solar Mission has a target of 20 GW of solar capacity by 2020. In addition, there will be an emphasis on creating other renewable capacities — via renewable energy certificates, renewable purchase obligations and tax-depreciation benefits. Attempts will also have to be made to aggressively promote energy efficiency via the National Mission on Enhanced Energy Efficiency, and to reduce grid transmission losses. In transport too, aggressive fuel efficiency standards must be introduced. Also, the climate-related costs and policy distortions of subsidising diesel and kerosene have to be weighed. Schemes like the Clean Development Mechanism may help raise external resources; of course, technology imports will be necessary. But most funding will have to be domestic. It is not possible without private sector participation and unless all the states are on board. In turn, it is impossible without enlightened co-ordinated policy delivered through a dedicated structure of governance. The 12th Plan document, expected to be adopted and released later during the year, should indicate how the Commission recommends dealing with this task.