Realising low carbon infrastructure dream

Tuesday 26 October 2010

IDFC report puts forth an assortment of diverse solutions

India would need major policy and regulatory changes including standards, taxation of pollution and tailored incentives to ensure infrastructure development follows a low carbon route.

These are among the many proposals put forward in the India Infrastructure Report (IIR) 2010, released by Infrastructure Development Finance Company Limited (IDFC) on October 20, in New Delhi. The report is ninth in the annual IIR series published by IDFC’s 3-i network, a collaborative effort with Indian Institute of Management, Ahmedabad and Indian Institute of Technology, Kanpur (IIT-K).

A compilation of 27 papers by various authors, the report primarily focuses on how solutions available at hand, can move ideas from the drawing board to execution. It examines five areas - cleaner and efficient energy, rural infrastructure, urban and rural transport planning, legal frameworks and financial support. The distinctive feature of the report is that it primarily focuses on domestic resources and capabilities including financing. In doing so, it perhaps sends a subtle message that India's policy enthusiasts are moving beyond global climate deals to address the dual challenges of infrastructure development and taking on climate change.

For achieving energy efficiency in the electricity sector, Pramod Deo, chairman and Vijay Deshpande, advisor, Central Electricity Regulatory Commission in their paper urged the power regulators to take up the challenge. The duo noted that average efficiency of India’s coal-based power plants is 27 per cent, among the lowest in the world – compared to a world average of 34 per cent. “As coal will continue to be a mainstay,” Deo said, “stringent norms for higher efficiency designs are being enforced for upcoming power plants.” The duo further claimed that management of electricity demand has not been effective as envisaged. “Part funding for new demand side management techniques of high-voltage transmission networks and smart grids needs to come from consumers of utilities in the form of surcharges,” they noted in the report.

While discussing industrial energy use, another paper decried the lack of public data as a major drawback to plan any regulatory programmes. As regards to renewable energy, a paper found that many states have failed to comply with Renewable Energy Purchase Obligation (RPO) norms. Renewable Energy Certificates (REC) is a new complementary tool to RPO. Anoop Singh of IIT-K, highlighted “REC ignores the non-grid connected power generation installations, generally found in remote and rural areas”. Alan Rosling, an entrepreneur, lamented that a recent abrupt rule of limiting five megawatt per applicant in bidding under national solar mission is already causing investor fears.

Dilip Ghosh, an official with the government of West Bengal, in his paper pointed that awareness and knowledge of environmental issues and climate change adaptation is extremely low among panchayats. “There is an urgent need to take up capacity building,” he added. Another paper proposed increasing forest cover in degraded lands to generate rural employment and sequester carbon. Rajiv Lall, CEO and MD of IDFC suggested that “grass-root low carbon measures could be incentivised through microfinance institutions”.

The grim scenario and poor condition of urban planning in India has also been given enough attention in the report. As per the government's Indian Network of Climate Change Assessment, road transport accounted for a staggering 87 per cent of transport sector emissions in 2007. One paper reasoned that budgets for urban public transportation projects should not be looked in isolation, which leads to skyrocketing fares in rails and buses; rather it should be compensated adequately through charges on private transport. To put it concisely, Dinesh Mehta, Professor Emeritus, Center for Environmental Planning and Technology University, Ahmedabad, argued “urban transport planners in India should start focusing on moving people and not on just moving vehicles". Another paper on transportation emphasised that it is time non-motorised transport is viewed upon with more esteem in the country and facilitated by segregating lanes to ensure user safety.

Few takeaways from the report:

  • New nationally binding law or policy on renewable energy for enhanced certainty and harmonisation across states
     
  • Start panchayat level capacity building schemes for adaptation
     
  • Put taxes or charges on carbon emitting activities for raising funds
     
  • Agriculture-based offsets for a market with domestic offset buyers
     
  • Environmental co-benefits to be integrated in transport and urban planning

 

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