The recent Copenhagen summit on climate change may not have resulted in binding agreements, but India is getting ready with the task of meeting its proposed emission intensity-cut targets of 20-25% by 2020. This will mean additional investment by the industry as well as the government, triggering fears of slowing growth rate. Neeraj Thakur of DNA spoke with director general of the Bureau of Energy Efficiency (BEE) Ajay Mathur, who was one of the negotiators at the Copenhagen meet. Excerpts from the interview:
Post-Copenhagen, how does it feel to be back to square one as there was no firm decision at the summit?
It depends on how you look at the result. I agree that there is a disagreement on most of the issues that are required for securing the interests of developing nations. However, what we have achieved at Copenhagen is a political statement from the US and other countries.
The US President has committed something and so have other nations. Now, the US President can go back to his Congress and say that this is what the world has committed itself to, and now they need to do something.
For us, it is important to be careful regarding funding of expensive technology required to control carbon emissions and the implementation of the REDD (reduced emission from deforestation and degradation) mechanism to ensure that the most vulnerable population gets support quickly.
So, if we analyse the world scenario before the start of the Copenhagen summit and after that, I think we have achieved a lot.
The government had to face a lot of criticism for announcing self binding emission intensity cuts of 20-25% till 2020. Do you think those targets are achievable?
The targets are achievable with efforts. We need to focus on four key areas — enhancing efficiency of our thermal power plants to alleviate power generation; controlling losses in transmission & distribution; fuel efficiency of the transport sector; and efficient use of various electronic appliances. If we are successful in each one of them, it is achievable.
The government announced its emission intensity-cut targets a few weeks before the Copenhagen meeting. What was BEE’s role is setting up these targets and how did one arrive at the 20-25% figure?
The intensity-cut target was decided by the government and not by us. It announced the target in Parliament before the Copenhagen meet and we were entrusted with the task of framing policies to achieve those targets.
Emission cuts will have a direct impact on the pace of India’s growth. So if pre-recession, we were growing at 9% plus rate, what will be the cost that Indian growth story will have to pay if we try achieve emission-cut targets?
Measures to control emissions will require incurring additional costs to begin with. But they (the measures) will more than pay for themselves in next 3-5 years.
Are you sure that every investment made to buy new technology will break even in 3 to 5 years?
Yes. Take the example of a power station working on sub-critical technology that has coal efficiency of 37-38%. Now, if a power producer buys super-critical technology that costs 10-15% more than the sub-critical technology, the company will have to invest that much more initially. But that new technology will increase the coal usage efficiency by 10%. This will increase the rate of return for the power producer and, in 3 to 5 years, the initial cost can be recovered.
But wouldn’t higher upfront payment make financial closure difficult for projects?
Yes, financing would be the main issue for Indian companies before they adopt new energy-efficient technology. The economy as a whole will be better off because you are using less resources and the overall cost of producing goods becomes less. But in the short term we will have to device new financing tools that take care of the investor’s initial needs.
Technology makes lives better for the poor, if made available to them at a cheaper rate. In a country that has over 30% people living below poverty line, the costly technology to control carbon emission will make life difficult for the poor. What are your views on this?
It is important for the government to ensure that all people do not bear the brunt of this additional cost. Even today, you look at the case of CFL technology: Those who had the money, shifted from the old technology (normal bulbs) to the new one (CFL) as it saved on electricity consumption. The high cost of CFLs deterred the poor from buying it. So the government came out with Bachat Lamp Yojna scheme, in which CFLs are made available to houses at Rs 15, which is the cost of a normal bulb. The company that sells the CFL at a cheaper rate earns carbon credits and recovers the balance cost by selling those credits in the market.
If we can come out with such schemes, we will be able to adopt the energy efficient technology without any problem.
Recently, the government announced an incentive of 50 paise per unit for generating wind energy. The measure will cost the government Rs 380 crore per annum. How much of subsidy can be offered to promote clean technology?
Well, I can talk about energy efficiency… wind energy is out of my purview. I do not believe in giving subsidy to promote technology. We will have to come out with schemes that promote energy efficiency without any subsidy. Bachat Lamp Yojna is a perfect example.
India’s per capita carbon emission is 1.3 tonnes, while it is 20 tonnes in the US. Do you think the targets announced by us are justified, or have we gone overboard in making announcements?
It has been one of the cornerstones of India’s stated policy that every individual is entitled to certain amount of carbon space. In the long term, all countries will have to converge into a band of per capita carbon emissions. Our Prime Minister has committed that India’s per capita emissions will never exceed those of developed countries. This is actually a challenging target — as the developing countries reduce (emissions) and we grow, we have to ensure that we do not exceed their average. The US and Europe agree that about 80% reduction in carbon emissions has to be from the developed countries by 2050. There is a huge amount of disagreement on 2020 number but not on the 2050 number.
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