Getting clean air back

Air pollution can be brought down to near permissible levels within five years with the use of the right regulatory and policy instruments

The good news is that finally there is a National Clean Air Program to mitigate the real health crisis that air pollution is causing. The task is daunting. All new programs need substantial funds for the subsidies and grants that are the normal instruments of implementation. The fiscal deficit will, however, be higher in the coming financial year and the new government would need to again move towards fiscal rectitude. The provision of large budgetary resources for clean air may, therefore, be difficult. So the challenge would be to make a major dent without much money. Fortunately, there are some zero and modest cost options, which can have a major impact and require only policy and regulatory interventions. 

The zero cost option for getting air pollution from burning of crop residues down to zero would be for the thermal power stations of the region to offer an attractive enough price for the supply of briquettes made from crop residues. The price signal would get competitive private investment into briquette making plants. The farmers would get a price for their crop residue and some increase in their incomes.  The additional cost, if any, that the power plants would incur by the use of briquettes instead of coal would be a pass through in their regulated tariff. The impact on the final consumer would be negligible. All that would be needed is a policy mandate to thermal power plants and regulators.

Electricity and gas cylinders are reaching all rural households through Saubhagya and Ujjwala programmes. Cow dung is presently used for cooking and is a significant source of air pollution. The Power Distribution Companies could announce a sufficiently remunerative tariff for the purchase of electricity generated from cow dung. This could be a separate earmarked component of the Renewable Energy Purchase obligations of the Distribution Companies. A policy mandate to the Regulators would be needed. There are mini plants, which convert cow dung into gas and compost and use the gas, to generate electricity. Private investors would then put up plants in villages and pay a price for cow dung. Cattle owning households would get some additional income. With this they would find it easier to pay for clean energy, electricity, and gas, for cooking. In a few years all the cow dung in the country could be converted into clean energy and would cease to cause air pollution. The additional cost to the consumer of electricity as a result would be marginal.

Electric vehicles do not pollute the air. To begin with, the Transport Authorities in the more polluted areas, such as the National Capitol Region, could announce that from, say, 1st January 2020, all new as well as replacement permits for taxis, three wheelers, and mini buses for local public transport would be given only for electric vehicles. This would give enough time for the electric vehicle manufacturers in India to ramp up production. They have the electric vehicles. The local authorities should get a sufficient number of charging stations in place by then. The cost of these electric vehicles have come down considerably. The Energy Efficiency Services Limited(EESL) is providing electric vehicles to the government at the existing market rates. These do not need subsidies for public transport. Purchase of electric vehicles for personal use would rise only after people get used to electric taxis. However, the electric two wheelers have become so economical that they only need the network of charging stations to dramatically increase market share. But buses need subsidies as their costs are still quite high. Subsidising electric buses by fully foregoing the goods and services tax (GST) would be amply justified. It may be noted that London is mandating that all taxis be electric to address growing concerns there about air pollution.

Micro, small and medium industries cause considerable air pollution as they use coal and other polluting energy sources. A rapid extension of the gas grid to cover all urban areas and industrial clusters would enable these industrial units to use clean gas as their energy source. All households would also switch over to piped gas for cooking. Imported liquefied natural gas (LNG) based fuel would be able to cater to the full demand. This can be done without any subsidy. The distortion of dual pricing in gas; one for domestic gas and one for imported LNG has outlived its rationale and needs to go. There should be only one price for all consumers as is the case with petrol and diesel.

Then there are old coal fired stations in and around urban centres. These can easily be closed to reduce air pollution. This should pose no difficulty as the country has surplus power capacity. The recent closure of the Badarpur thermal plant is a good example. Such closure of old polluting plants would also reduce net carbon emissions as the newer plants are more energy efficient. In addition, the increased demand for electricity from newer plants would, to some extent, mitigate the risk of these plants becoming NPAs due to lack of demand. 

Old commercial vehicles cause considerable pollution and need to be fully replaced with BS VI compliant new vehicles at the earliest; within 3 to 5 years. A regulatory fiat of scrapping all these vehicles across the country would be the way forward. The phasing out would not run into resistance and become far smoother if an attractive enough price was given for trading in of the old vehicles. An efficient system for scrapping these with full traceability would also need to be put in place. Government would need to fully finance this. But the outgo of money would be sufficiently offset by the additional GST revenues from the higher sales of commercial vehicles.

Air pollution levels could conceivably be brought down to near permissible levels within five years with the use of the right regulatory and policy instruments. Subsidies should be introduced only where there is no other option. But then it should be amply provided so as to achieve the objective fully.

The writer is former Secretary, Department of Industrial Policy and Promotion, Government of India