The Case For A Comprehensive Indian Climate Bill : Daily Current Affairs

Date: 23/08/2022

Relevance: GS-3: Conservation, environmental pollution and degradation, environmental impact assessment

Key Phrases: Inflation Reduction Act of USA, US CHIPS and Science Act, decarbonization of the economy, Electricity (Amendment) Bill 2022, Five Nectar Elements (Panchamrit), National Action Plan on Climate Change.

Context:

  • The US recently passed the Inflation Reduction Act (IRA) of 2022 with an outlay of $370 billion for the de-carbonization of its economy.
  • It is being hailed as the “biggest climate expenditure in US history” and the beginning of “a new era for climate technology”.
  • It has induced a discussion in India regarding our fight against climate change.

Background

  • India is the 5th most vulnerable country to climate change globally. Annually, India loses nearly 37 billion dollars due to climate change.
  • NITI Aayog estimated in 2018 that more than 600 million Indians will face acute water shortages in the coming years.
  • The impact of climate change is clearly visible as most parts of UP, Bihar and other states are currently facing drought-like situations.

Developments in the USA

  • Recently signed the US CHIPS and Science Act will invest a historic amount in science, technology and manufacturing.
  • These Acts are intended to help the US keep up its technological competitive edge vis-à-vis its primary challenger, China.
  • IRA systematically targets a reduction of emissions across various sectors: buildings, industry, transport and power.
  • It includes investments to promote -
    • Residential energy efficiency improvements;
    • Tax credits for wind, solar and storage;
    • Manufacturing tax credits;
    • Nuclear credits;
    • Clean hydrogen tax credits; and
    • Incentives for clean vehicles, clean refueling/recharging, and for biofuels.
  • The investments and tax credits included sync with the $80 billion investment.
  • Overall, the IRA seeks to reduce greenhouse gas emissions while positioning the US to compete with China in the climate tech space.

Developments in India

  • India has seen its own share of climate-related legislation, including the new Energy Conservation Bill of 2022.
  • Under it, India has approved the setting up of a carbon market, promised to boost renewable energy generation capacity while specifically mandating its consumption by certain sectors.
  • The Electricity (Amendment) Bill 2022 seeks to facilitate greater competition in electricity distribution while proposing automatic tariff adjustments based on fuel cost changes.
  • India’s Nationally Determined Contributions include a commitment to reduce the emission intensity by 45% of GDP by 2030 from 2005 levels and achieve a cumulative 50% installed capacity for electric power from non-fossil fuel sources.
  • This flurry of climate-focused legislation is an excellent sign that Indian legislators have their eye on the ball.

What India can learn from the USA:

  • The IRA is a geostrategic move by the US that also aims to assuage domestic concerns about inflation by reducing its dependence on hydrocarbons, seen as a big cause of price instability.
  • The IRA will enable the US to identify and deploy at scale the solutions necessary to get to net zero by 2050.
  • It will allow the US to reduce its current reliance on China for much of its climate tech supplies.
  • India has committed itself to carbon neutrality by 2070 and to achieve this realistically and self-reliantly, India also needs to invest heavily in climate technologies and domestic manufacturing.
  • IRA is part of a long-range effort to cap the impact of volatile energy bills on retail prices. As fuel costs for Indian consumers have risen, India could use its green plans to meet similar goals.
  • Several policies included in the IRA could be tailored to suit the Indian context -
    • It includes tax credits up to $7,500 (about ₹6 lakh) off the price of a new electric vehicle (EV) which can be transferred to the dealer at the time of purchase - expected to spur EV adoption.
    • While India has an incentive scheme, it lags many other countries on EV adoption. Tax credits could give it a boost.
  • The IRA also provides 5 years of tax credits to make sustainable aviation fuel cost-competitive with jet fuel, reducing emissions by 50-80% compared to jet fuel.
  • India’s transport minister spoke at the recent Mint Mobility Summit about leveraging Indian ethanol manufacturing capabilities to produce aviation-grade biofuels. This needs policy interventions.
  • The IRA also sets aside $5 billion for low-carbon procurement by the US government to promote the use of clean materials. India could embark on a similar drive to spur domestic innovation.
  • This will hopefully drive price reductions, and promote a similar increase in low-carbon procurement by the private sector.

India presented Five Nectar Elements (Panchamrit) at COP26:

  1. Reach 500 GW Non-fossil energy capacity by 2030.
  2. 50 per cent of its energy requirements from renewable energy by 2030.
  3. Reduction of total projected carbon emissions by one billion tonnes from now to 2030.
  4. Reduction of the carbon intensity of the economy by 45 per cent by 2030, over 2005 levels.
  5. Achieving the target of net zero emissions by 2070.

The National Action Plan on Climate Change (NAPCC)

  • It was launched in 2008 by the Prime Minister's Council on Climate Change.
  • It aims at creating awareness among the representatives of the public, different agencies of the government, scientists, industry and the communities on the threat posed by climate change and the steps to counter it.
  • There are 8 national missions -
    • National Solar Mission
    • National Mission for Enhanced Energy Efficiency
    • National 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
    • National Mission on Strategic Knowledge for Climate Change

Way Forward

  • India must invest sufficiently to build domestic climate-tech manufacturing capabilities, enhance the adoption of existing climate technologies, and enable innovation.
  • India needs a comprehensive Climate Bill - with a clear vision, multi-sectoral strategy and substantial investment - to make the country a climate tech power and seize the climate-action moment.
  • Only by becoming an early leader can India emerge victorious in this Great Tech Game.

Source: Live-Mint

Mains Question:

Q. India needs a comprehensive Climate Bill to make the country a climate tech power and seize the climate-action moment. Critically analyze. [150 Words].