Odisha forms five committees for low carbon development

The Odisha government has formed five committees to develop fiscal instruments for promoting low carbon development in the state.

The panels formed would look into specific areas and they are mandated to submit their reports within six months.The key deliverables of the committees include a report on the areas of implementation, a report on existing policies of the state government that would affect implementation of identified instruments and an implementation action plan for each recommendation.

The committees are also required to furnish a note on capacity building needs and on funding requirements and utilisation of available funds.

“Various studies have shown that fiscal instruments and incentives can be effectively used for mitigating climate change. There is a need to identify the fiscal instruments that could be implemented in the state to promote low carbon development”, stated a notification by the state finance department.

Among the five committees, one will be on low carbon refund scheme for power sector to be chaired by principal secretary (energy). The panel would have chairman cum managing director of Gridco, regional executive director of NTPC, chief executive of Odisha Renewable Energy Development Agency (OREDA) and managing director of Green Energy Development Corporation (Gedcol) as members.

The other four committees would be on low carbon refund scheme for industries, incentive for waste heat recovery, incentive for buildings and incentive for waste sector.

A subject matter expert from the Confederation of Indian Industry (CII) would provide assistance to each committee on technical matters and support required for drafting of the minutes and recommendations.

A report by the CII pitched for low carbon refunding scheme for the power sector and larger industrial enterprises for facilitating climate friendly industrial development in Odisha and West Bengal.

Low carbon refund scheme is an instrument that levies a cess on the carbon content of fuels used at power plants which is refunded back to the power sector based upon the amount of electricity generated. It provides a dynamic incentive for the industry to reduce the carbon content of electricity generation by increasing efficiency of generation, switching to fuels with lower carbon content and switching from high carbon to low carbon generation.

For larger industrial enterprises, the study says the low carbon refunding scheme has the potential to deliver considerable benefits through a novel and efficient incentive mechanism though it might be administratively complex.

For such enterprises, the report has suggested a levy on the amount of electricity used. The revenue so generated is then refunded back to the sector based on a useful measure of output such as gross profit.