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Stubble burning surged in Uttar Pradesh, Rajasthan, and Madhya Pradesh. Madhya Pradesh recorded 16,360 cases, the highest among states monitored, writes Surabhi Gupta.
The increase in stubble-burning cases in Uttar Pradesh, Rajasthan, and Madhya Pradesh highlights gaps in policy implementation and technology accessibility. (ETV Bharat)
New Delhi: The Indian Council of Agricultural Research (ICAR) has unveiled its findings from the satellite-based monitoring of stubble burning across five major agricultural states; Punjab, Haryana, Uttar Pradesh, Rajasthan, and Madhya Pradesh. Conducted between September 15 and November 30, 2024, the study highlights a marked reduction in the overall number of stubble-burning incidents compared to previous years.
According to the ICAR report, stubble-burning cases declined to 37,602 in 2024, representing a 34% drop from 2023 and a staggering 59% reduction since 2021. This data underscores growing awareness among farmers and the impact of various government initiatives to curb the environmentally harmful practice.
Expert Insight
S.N. Mishra, a climate expert and professor at TERI School of Advanced Studies, spoke to ETV Bharat on the issue. "While the reduction in stubble-burning cases is encouraging, the claim of a 70% reduction in Punjab appears overstated. Farmers are increasingly avoiding detection by burning stubble at times not monitored by polar-orbiting satellites," Mishra explained.
He added, "Air pollution in North-West India is influenced by two key factors: aerosol loads and atmospheric conditions. This year, strong post-Diwali winds and the absence of an inversion layer helped prevent a pollution spike. However, high nighttime aerosol loads suggest that pollution levels remain concerning. Effective long-term solutions require consistent policy enforcement, farmer engagement, and economic incentives for sustainable residue management.”
Four-Year Overview of Stubble Burning Cases
Statewise Analysis
The report provides a detailed breakdown of cases by state, showing progress in some areas while highlighting persisting challenges in others.
While Punjab and Haryana reported significant reductions, 70% and 39%, respectively, stubble-burning incidents surged in Uttar Pradesh, Rajasthan, and Madhya Pradesh. Madhya Pradesh recorded 16,360 cases, the highest among the states monitored, reflecting a 31% increase compared to 2023.
The report provides a detailed breakdown of cases by state, showing progress in some areas while highlighting persisting challenges in others. (ETV Bharat)
Reasons for Success in Punjab and Haryana
Several factors contributed to the success in reducing stubble burning in Punjab and Haryana:
• Sustainable Technologies: Subsidized machinery like happy seeders and super straw management systems facilitated in-situ residue management.
• Awareness Campaigns: Efforts by government bodies and NGOs educated farmers on the harmful environmental impact of stubble burning.
• Policy Interventions: Stricter enforcement of penalties and financial incentives under the Commission for Air Quality Management (CAQM) played a pivotal role in deterring the practice.
Challenges In Other States
The increase in stubble-burning cases in Uttar Pradesh, Rajasthan, and Madhya Pradesh highlights gaps in policy implementation and technology accessibility. Madhya Pradesh’s 31% increase in cases underlines the need for region-specific strategies and a stronger focus on farmer support.
Impact on Air Quality
Stubble burning has long been a key contributor to the winter air pollution crisis in North India. The decline in incidents in Punjab and Haryana has had a noticeable impact, improving air quality during the post-Diwali period. However, experts caution that rising cases in other states could offset these gains, emphasizing the need for a nationwide approach to tackle this issue comprehensively.
The ICAR report paints a mixed picture of progress and challenges. While the overall decline in stubble-burning incidents is a step in the right direction, the surge in cases in certain states demands urgent attention. Experts call for consistent policy enforcement, increased financial incentives for sustainable practices, and continuous engagement with farmers to eliminate the practice altogether.
As Mishra aptly noted, “The problem is not just seasonal but systemic. Long-term solutions will require integrating economic, technological, and environmental strategies to achieve lasting results.”
The success in Punjab and Haryana offers a blueprint for addressing the issue across India. Still, achieving cleaner air for all will require coordinated efforts and sustained commitment at all levels.
Read MoreDr. Habeck emphasised India’s immense renewable energy potential, particularly in solar and wind, which allows for green electricity generation at globally competitive prices
Dr. Robert Habeck, German Vice Chancellor and Minister for Economic Affairs and Climate Action, engaged with students from TERI School of Advanced Studies (TERI SAS) to discuss opportunities and challenges of the energy transition in both India and Germany, with a particular focus on win-win scenarios through decarbonising economies.
In his opening remarks, Dr. Habeck emphasised India’s immense renewable energy potential, particularly in solar and wind, which allows for green electricity generation at globally competitive prices. He highlighted the importance of international cooperation, which offers mutual benefits, and encouraged students to see their essential role in this journey toward sustainable development. As future engineers, scientists, policymakers, and entrepreneurs, students have a critical role in making green development a reality.
The discussion with the students covered decarbonisation of economies, globalisation, diversified supply chains, and international cooperation. Students explored Germany's approach to achieving an 80% renewable electricity share by 2030 and discussed challenges in managing hard-to-abate sectors, potential job impacts, and the necessity for public support in the energy transition. Topics also included opportunities in trade, specifically in solar, battery manufacturing, and green hydrogen.
Prof. Suman Kumar Dhar, Vice Chancellor, TERI SAS, highlighted, “Dr. Robert Habeck engaged students in a vibrant dialogue titled 'Inspiring Minds, Empowering Change - Navigating the Future Together'. His insights on sustainable development and climate action ignited passion among future leaders, highlighting the impact of collaboration. Through critical discussions on innovative solutions, Dr. Habeck inspired a generation to think creatively and act decisively in addressing global challenges, showcasing education’s role in shaping a sustainable future.”
Following the student exchange, Dr. Habeck and Abhay Bakre, Mission Director, National Green Hydrogen Mission, Ministry of New and Renewable Energy (MNRE), jointly presented the Indo-German Green Hydrogen Roadmap. Officially agreed upon at the 7th Indo-German Inter-Governmental Consultations on 25 October 2024, this roadmap outlines a shared path to achieving a sustainable energy future.
The panel discussion was joined by Rishika Rajkumar, Suhani Nagar, Dhruv Rajoria, Anuja Ramugade, Jayati Gupta and Taveri Rajkhowa.
Read MoreAccording to LinkedIn’s ‘Jobs On The Rise 2024’ report, ‘Sustainability Manager’ is one of the top 25 most sought-after roles in India.
New Delhi: Shiny, brand-new red benches that popped up one day in Delhi University’s North Campus led 20-year-old Sneha Chopra to a career in environment. Initially thinking they were a PR stunt by a brand, Chopra, then a zoology student at Khalsa College, ignored them. But then she saw that these benches, installed by Zomato, were made of 100 per cent recycled plastic waste as part of a sustainability campaign.
“It was my first time seeing a company take concrete action for the environment, and I realised there’s so much scope for sustainable action in the corporate world,” said Chopra, who is now pursuing a master’s degree in Environmental Studies and Resource Management from The Energy and Resources Institute (TERI) in Delhi. She wants to graduate and work as a sustainability manager for a big corporation like Zomato, helping reduce their carbon footprint.
Chopra is one of the many new ‘climate aspirants’ in India – she wants a career working in the climate action sector, and the avenues to choose from seem endless. LinkedIn’s Jobs on the Rise 2024 report named ‘Sustainability Manager’ as one of the top 25 most sought-after roles in India. Climate change has permeated every sector and industry, from environmental, social, and governance (ESG) consulting and environment law to climate agriculture science and renewable energy policy. Colleges are perking up at the opportunity, introducing new courses on climate sciences. Companies, on the other hand, are offering workshops on sustainability to their employees.
“Climate is the economy now”
– Arunabha Ghosh, CEO, CEEW
According to industry experts, this growth is partly motivated by increased student interest in issues of climate change and mitigation. Others point out that the interdisciplinary nature of climate jobs makes them attractive to a wider audience. However, most industry insiders agree on one thing – the climate careers trajectory will only grow upwards.
“Climate is the economy now,” said Arunabha Ghosh, CEO of the Council on Energy, Environment and Water (CEEW). “It is not just some sectors or industries that need to adapt to the climate crisis, it is the whole world that needs to incorporate climate concerns in its overall thinking.”
Sustainability consulting taking off
Karantaj Singh, the 25-year-old co-founder of a Bengaluru-based ESG technology firm called Breathe ESG, has been passionate about sustainability since “before it became sexy”.
Singh was still in high school when a chance visit to the United Nations Headquarters in New York sparked his interest in the climate action sector. The visit was organised by the World Federation of United Nations Associations (WFUNA) in 2015, the year they announced their Sustainable Development Goals (SDGs). Now, Singh has been in the sustainability space for almost a decade.
Upon his return, he co-founded The Deepam Initiative in Bengaluru to provide climate-resilient infrastructure to villages in Karnataka. Right after college, when he joined KPMG as a strategy consultant, Singh realised the real potential of sustainability in even a mainstream profession like consulting. So he left the growing ESG advisory team at KPMG to start a firm focused exclusively on helping companies streamline their environment and sustainability management processes.
He was a part of the growing ESG advisory team in KPMG for a year before leaving to start a firm solely dedicated to helping companies streamline their environment and sustainability management processes.
“Being sustainable is no longer a choice for companies – investors, customers, and international regulations all demand that sustainability should be the core function of any company,” explained Singh.
Barely two years old, Singh’s Breathe ESG already has a number of clients in sectors such as real estate, infrastructure, manufacturing and even retail. They use the firm’s solutions to manage, calculate and report companies’ carbon emissions and sustainability practices. Indian regulators such as the Securities and Exchange Board of India (SEBI) mandate the top 1,000 companies in India to report their ESG practices, but more and more companies are voluntarily declaring their emissions in a bid to be more sustainable. This is the market that Singh, his co-founder Shaayak Chatterjee, and their team of 15 employees from engineering, business, history, environment science, and marketing backgrounds have tapped into.
KPMG, Singh’s former employer and one of the world’s biggest consulting firms, also leads in environment and sustainability services in India. It offers a range of ESG solutions to its clients, including ESG reporting, climate risk modelling, and sustainable finance. Namrata Rana, National Head for ESG, KPMG India, spoke about how the need for ESG consulting services arises because of the way climate change has permeated every company.
“The world has realised that unless they are aligned to the natural ecosystem and its changes, the entire business model that the world runs on is under threat,” said Rana, explaining how the real-world impact of climate change and extreme weather is much stronger for companies than regulatory frameworks demanding sustainability measures. KPMG India’s ESG vertical started just before Covid-19 with about 35-40 people. Now, it has over 200 employees across the board. Rana also added that sustainability is a company-wide watermark for KPMG – every practice and service in the organisation embeds ESG.
Viral Thakker, Partner, Sustainability & Climate Leader, Deloitte South Asia, echoed Rana’s views on how clients are responding to more “nature-based solutions” in ESG consulting. He explained that the number of people and companies working in ESG indicates a “profound shift” in how companies are looking at climate change and reacting to it.
“The job market goes through waves – a few years ago, data science was all the rage, then it was product management. Now, India’s going through the climate wave,” said Shrey Agarwal, founder and CEO of Alt Carbon, a carbon dioxide removal (CDR) company based in Darjeeling, West Bengal.
Agarwal’s point also comes across acutely in industry reports – the transition to climate-centric jobs is being acknowledged by the entire job ecosystem. According to the International Labour Organization’s ‘Assessment of India’s Green Jobs and Just Transition Policy Readiness’ report 2023, around 54 million green jobs will be created in the country between 2021 to 2030. Other organisations such as the Skill Council for Green Jobs (SCGJ) peg the number at 30-35 million new green jobs by 2047. However, as the ILO’s report states, and the industry agrees, “green jobs are a priority in India.”
In terms of the economic impact of green jobs, the World Economic Forum, in a report titled ‘Mission 2070: A Green New Deal for a Net Zero India’, estimated that the country could create a $15 trillion economic opportunity through its green transition by 2070. Out of this, the report said, $1 trillion worth of opportunities could be created just by the end of this decade.
“Climate is where the money is,” said Amlan Bibhudutta, a 24-year-old research analyst at CEEW. With a degree in economics and a postgraduate diploma in data and policy, Bibhudutta initially wanted to get a postgraduate degree in economics and move abroad. But a year into researching energy transition pathways at CEEW, he realised the scope in the climate space.
“The job market goes through waves – a few years ago, data science was all the rage, then it was product management. Now, India’s going through the climate wave”
– Shrey Agarwal, founder and CEO, Alt Carbon
“It isn’t just energy or sustainability. There is climate finance, there’s pollution, afforestation – you name it, and there are people working on it. The thing with climate change as opposed to other social impact sectors like poverty alleviation is that it affects everyone, even financial institutions and big industries. So they’re all the more interested in mitigating it,” he explained. In three years, Amlan was promoted from a consultant to a full-time analyst with CEEW, where he is part of the climate finance team.
The journey of CEEW itself exhibits the steep rise in climate careers in India. From less than 80 employees in 2019 to around 350 employees in 2024, the think tank has become one of the biggest in India. Its focus on environment, renewable energy, and water has made even the government take notice, and many verticals of the think tank are working with state and central government departments to help design sustainable policies.
“The rise in climate jobs is entirely demand-driven,” said Reman Singh, the head of human resources at CEEW. “The demand right now far outstrips the supply in this sector,” she added.
Climate and environment education
For Shubha V, an alumna of IIM Indore, working in Ernst & Young’s climate change and sustainability services vertical was ideal for starting a career in climate-focused consulting. When she was sitting for her placements at IIM in 2022 during her five-year Integrated Programme in Management, there was a tough competition for this role – almost as much as there is for mainstream consulting roles in the ‘Big Four’. Only nine people, including Shubha, got the job that year from her college.
“It was a prestigious job, and the interview process was equally daunting. There were three rounds including a written, an HR interview, and a final interview,” she said.
It was during the final interview process, when she met her future bosses, that Shubha was quizzed on her ability to serve in a sustainability role.
“I realised it wasn’t just generic MBA questions and case studies – they were more interested in my understanding of sustainability, and how I had used my skills in the climate sector before,” she recalled.
“They were trying to gauge if my long-term goal aligned with working in climate change.”
Shrey Agarwal of Alt Carbon too talked about the freshers they usually hire at Alt Carbon. He explained that most of the students from BITS and IITs, and even local engineering colleges in Darjeeling and Sikkim, where their facility is based, are very well-versed with the hardcore STEM skills required for climate tech companies. The problem arises in knowing how to apply these skills to the climate sector.
“Many engineers and scientists know about climate change but don’t think about how they can apply their geoengineering and research skills to actually solve the issue,” said Agarwal.
“Climate deep-tech can significantly change the world, but it’s an underrated industry in India right now, and colleges can definitely help facilitate its growth,” he added.
Some colleges in India are actively working to facilitate this growth in climate awareness.
From established IITs and NITs to newer private universities such as OP Jindal Global University and Ashoka University, there are courses, departments, and degrees dedicated to environment, climate, and energy studies.
Azim Premji University’s Centre for Climate Change and Sustainability already has over 80 students enrolled in their BSc in Environmental Science and Sustainability programme that was introduced only two years ago. The department, which was launched in 2019, offers training workshops and short courses like environment data analysis and environment reporting for mid-career professionals. Due to growing demand, the department has also decided to start a master’s in Environment Change and Sustainability programme this year.
“We don’t have a degree requirement for our BSc or MSc courses – you can be from any background. The nature of our course is interdisciplinary, just like climate change,” explained Harini Nagendra, the director of the centre. Owing to demand, Nagendra also started a weekly webinar on job opportunities in the sustainability sector this September, and the first episode garnered more than 1,700 viewers.
While Azim Premji and OP Jindal have both introduced specific environmental programmes fairly recently, other prominent institutions such as IIT Bombay, NIT Rourkela, and IIT Madras have been offering courses in environmental engineering, atmospheric sciences, and climate sciences for far longer. NIT Rourkela, the first NIT in the country to offer master’s courses in atmospheric sciences in the year 2010, currently has 108 postgraduate students and 48 PhD students in the department, all pursuing varying levels of research in the field of climate change action. Similarly, IIT Bombay’s Centre for Climate Studies, which started with around four PhD students in 2012, has over 70 PhD students enrolled now.
“Universities and education spaces are at the forefront of climate science – they develop models to predict climate trends, they analyse data for extreme weather events, and recommend policy measures for climate mitigation,” said Nagaraju Chilukoti, an assistant professor in the Department of Earth & Atmospheric Sciences at NIT Rourkela, Odisha.
Interdisciplinary nature of climate careers
At the TERI booth at the International Solar Festival in Delhi, 27-year-old research associate Hemakshi Malik animatedly explained her work in renewable energy, focusing on solar potential in agriculture in the states of Haryana and Uttar Pradesh. But five years ago, she was studying physical science in Delhi University, hoping to work in quantum computing.
“My journey into energy transition and climate change was quite accidental, but once I was here, I couldn’t leave,” said Malik, emphasising the importance of the work she does at TERI.
After an internship with GIZ India, which provides services for sustainable development, in 2023, where she worked on the potential estimation of agrivoltaics in different Indian states through remote sensing and Geographic Information Systems (GIS), Malik understood the impact of technology on climate change policy. She has now completed a year at TERI as a research associate; her favourite part is that she gets to interact not just with the private sector but also with government stakeholders and communities to understand the barriers and enablers for the proliferation of renewable energy. This multisectoral extent of her job also involves an interdisciplinary cadre of researchers.
“I come from physics, while my colleagues are economists, doctors, social scientists, engineers,” Malik laughed. “Yet here we are all working together because all our skills are equally important in something as all-encompassing as climate action.”
Environment science might have been a niche subject during my parents’ time, but we’re a generation that has grown up with global warming.
– Ireena Singh, an undergraduate student of environment studies at OP Jindal Global University
CEEW’s Reman Singh made similar arguments from the employer side of the equation. Their organisation actively employs people from political science, international relations, anthropology, and physical sciences to work on climate change-related issues. Their main ask is – can this individual understand the different facets of this planetary problem? Can they be a force for public good in the realm of climate change?
In today’s generation, it is not difficult to find such individuals. Ireena Singh, an undergraduate student of environment studies at OP Jindal Global University, said that choosing her discipline was never much of a dilemma. She remembers studying about the depleting ozone layer and climate change since she was 10 years old. Shreya Sharma, a graduate in literature from Ashoka University, started pursuing environment as a minor only in her final year but went on to work in an environment advocacy firm because the subject gripped her.
Azim Premji University’s Harini Nagendra also attributed the rising interest in climate careers to the sheer exposure that the younger generation has had to climate change. It is no longer a distant threat, but a very real, in-time experience for most of them. So, added Nagendra, “their passion to work in this field is quite understandable”.
“Environment science might have been a niche subject during my parents’ time, but we’re a generation that has grown up with global warming,” said 20-year-old Ireena, currently in her third year of undergraduate studies and looking for jobs in climate-driven NGOs. “I think it’s surprising for someone my age to not want to work in climate action.”
(Edited by Aamaan Alam Khan)
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Carbon pricing is the value ascribed to the external costs – usually social costs – of pollution emitted by an industry. The price on carbon emissions is applied either through a carbon tax or an emission trading system.
Representative Image Source: AP
In the 1920s, a British economist, Arthur Pigou, highlighted the social benefits of making industries pay for the costs of the pollution they caused. In time, this concept was taken up in different ways, which have led to the concept of ‘carbon pricing’.
According to the World Bank, carbon pricing is the value ascribed to the external costs of pollution emitted by an industry. External costs are those that do not affect the industry itself directly – most industries receive the full benefits of fossil fuel consumption, but only bear a trivial fraction of its climatic cost. Instead, public systems pay a socially tragic price – such as the costs of losing crops because of poisoned air/water and health care costs because of heat/cold waves or extreme weather events from global warming.
Carbon pricing is an economic tool used to push industries, households and governments to bring down emissions and invest in cleaner options. It helps in shifting the burden of damage caused by pollution onto those responsible for the pollution but does not dictate how or where emissions can be reduced. Instead, it puts an economic value to pollution and allows polluters to decide whether to reduce emissions or continue polluting but pay the price for it.
Carbon pricing/taxes/trade are under the control of a country’s government. The government decides what taxes to levy and polluters pay these taxes to the government. Ideally, these taxes should be used to either offset the extra burden of carbon taxation on low-income groups or on remedial projects to offset the effects of pollution.
Why a price on carbon?
Carbon is priced because carbon-based gases (of which carbon dioxide or CO2 is most prevalent) are the most abundant greenhouse gases (GHGs) in most emissions. Therefore, pricing carbon provides an incentive for households, firms, industries, and governments to reduce emissions cost-effectively.
According to the latest Intergovernmental Panel on Climate Change (IPCC) report (March 2022), the window of action for meeting the goals set by the Paris Convention (a reduction in GHG emissions such that global warming is restricted to 1.5–2 degrees C above pre-industrial times) is rapidly closing. The report, titled Impacts, Adaptation, and Vulnerability states that without immediate action, rising global temperatures and climate change with create conditions beyond human tolerance.
Currently, the price on carbon emissions is applied in two ways; one is through a carbon tax, and the other through a cap-and-trading or emission trading system (ETS).
What is carbon tax?
Carbon taxes are the prices that governments impose on polluters for each metric ton of CO2 emissions (mt CO2e) generated. These taxes are levied on coal, oil products, and natural gases, according to their carbon contents. The advantages of levying carbon taxes are many. By internalising the externality of pollution costs, the tax motivates industries to improve energy efficiencies, move towards low-carbon fuels and renewable energy sources. The concept of carbon taxation can also be applied to other GHGs and pollutants. In addition, carbon taxes are fairly easy to administer as add-ons to already existent fuel taxes and generate revenue for governments that can be routed towards funding other aspects of the sustainable development goals.
Carbon taxes are, however, are not problem-free. One of the main arguments against carbon taxes is that they make fossil fuels more expensive, which will disproportionately affect people of lower income groups. In addition, carbon taxes may discourage investment and economic growth as businesses may shift production into countries without carbon taxes. Another issue with carbon taxation can centre on how the revenues collected from the taxes are utilised – should they be used towards alleviating tax burdens on workers due to rising fuel prices or towards repairing environmental degradation? Finally, the administrative costs of monitoring and measuring emissions, and uncertainties in measuring the social costs of carbon pollution can make carbon taxation a difficult task.
Individuals and households bear the brunt of carbon taxes when the price of the tax – which is usually directly levied on an industry – trickles down to consumer prices.
What is carbon trading? What are carbon credits?
Carbon trading is a market-based approach to pricing carbon emissions by putting a cap on or limiting the total amount of carbon-based pollution that can be produced. In this system, a central authority, in most cases, governments, allocate or sell a limited number (set as a cap) of permits that allow a specified amount of emissions over a period of time. In this system, each polluter is allotted a specific quota or allowance of pollution that it can emit.
However, polluters are then allowed to trade these permits with each other. For example, if a polluter manages to reduce its carbon emissions to levels lower than its assigned permit values, it is allowed to sell the right to emit carbon to another polluter which may be producing more emissions than it has permits for.
A carbon credit is a generic term for a tradeable certificate or permit representing the right to emit a certain amount of CO2 (usually 1 metric ton) or an equivalent amount of different GHGs. It is, in a sense, the basic trading unit for carbon markets.
The carbon trading market was set up in 1997, after the Kyoto Protocol was signed. Under this protocol, all participating countries were to set and adhere to a limit on their carbon emissions over a series of commitment periods. However, the protocol also allowed countries to trade emissions permits with each other. Apart from these permits, other tradeable carbon commodities could also be used, including carbon removal units (from activities such as reforestation), emission reduction units, and certified emission reductions (from clean development mechanism projects).
The prices in cap-and-trade schemes, which use carbon credits, are market driven (meaning that their prices vary according to demand and supply), although the government controls how many units/credits are allotted to each industry/stakeholder, and so how many credits are available for sale on the whole.
Carbon is priced because carbon-based gases, primarily carbon dioxide, are the most abundant greenhouse gases in most emissions. Photo by marcinjozwiak/Pixabay.
Criticisms of the carbon pricing system
Currently, the Environmental Defense Fund states that the cap-and-trade system is the most “economically and environmentally” sound approach to limit emissions and mitigate global warming. This is because the cap sets a firm limit on pollution and trading encourages cutting emissions in the most cost-effective manner.
However, there are several arguments that have been put forward (apart from the issues on carbon taxation) to highlight that carbon pricing, including carbon trading is insufficient to mitigate climate change. These arguments point out that carbon pricing places more importance on increasing efficiency than on effectiveness and encourages optimisation of existing systems rather than on transforming them to reduce pollution. Furthermore, it has been pointed out that current issues with emissions are a fundamental systemic problem of society, and not just a market problem; therefore, they will require more than just a ‘price on pollution’ to overcome.
“First and foremost, one must remember that carbon pricing, especially carbon taxation, is a tool to make cutting carbon emissions more economical – it is not necessarily a tool to cut the total amount of carbon produced”, says Nandan Nawn, a professor at the Department of Policy and Management Studies, TERI School of Advanced Studies and a member of the Biodiversity Collaborative.
“If we take the example of pollution from cars, a tax may not incentivise the owner-users to reduce the use of fossil fuels. After all, in urban areas, owning and using many cars is more of a status symbol, just like owning land in the rural areas. There are just too many incentives – EMI (equated monthly installment) is the most important – that fits nicely with this ‘aspiration’. For most users, fossil fuel is an ‘essential commodity’ and the quantum of its use is independent of price changes. On the other hand, making the emission standards stricter has the potential to reduce the pollution emitted by a running engine per unit of time. But according to ‘Jevons Paradox’ or the ‘rebound effect’ (expounded by William Stanley Jevons at the House of Commons two and a half centuries ago), if the rise in car numbers increases at a rate higher than the rate at which emissions are reduced, total emission will increase. There are no easy solutions here, given the political economy of carbon in India,” Nawn explains.
In addition to these issues, unlike how the cap-and-trade program drove innovations to reduce sulfur dioxide emissions from power plants, the rise in technological innovations for reducing carbon emissions have not met with the same success. Although there is some evidence that innovations in low-carbon technologies are being driven by the European Union’s ETS (EU ETS) and China’s ETS, there are doubts that this will help in driving climate change mitigation at the desired rate.
What is the current rate at which carbon is priced?
According to The World Bank’s Global Carbon Pricing Dashboard as of April 2021, global carbon pricing initiatives range from less than $1 to as high as $137 per mt CO2e. There are currently 65 carbon pricing initiatives across 45 national jurisdictions. In 2021, these initiatives would cover 11.65 Gmt CO2e, which represents 21.5% of the global GHG emissions. However, less than 1% of the global emissions (5 out of 65 initiatives) are currently priced at close to or above the least estimated social cost of carbon, which, according to the IMF, is 75 USD per mt CO2e. A publication in 2021 in the journal Environmental Research Letters, places the social cost of carbon at a whopping >3000 USD per mt CO2e if climate-economy feedbacks and temperature variabilities are taken into account. As of November 2021, the average weighted price of carbon stood at 3.37 USD per mt CO2e.
How does carbon pricing work in India?
Currently, India does not have any explicit carbon pricing or cap-and-trade mechanisms; instead, it has an array of schemes that place an implicit price on carbon. The Perform, Achieve and Trade (PAT) scheme aims to reduce emissions from energy intensive industrial sectors by setting specific energy reduction targets. Industries that exceed the targets are awarded Energy Saving Certificates (ESCerts), each of which is equal to one metric tonne of oil. Those industries unable to meet the targets are required to buy ESCerts (from units that have exceeded their targets) through a centralised trading mechanisms hosted by the Indian Energy Exchange.
The Coal Cess is a tax on coal that was introduced in 2010, which aimed to use the collected revenue to finance clean-energy initiatives and research via the National Clean Energy Fund. However, the idea failed to achieve significant outcomes as a large part of the collected revenue remained unutilised. In 2017, the coal cess was abolished and replaced by the Goods and Services (GST) Compensation Cess; the proceeds of this tax are used to compensate states for revenue losses due to a shift to the new indirect tax regime.
Renewable Purchase Obligations (RPOs) and Renewable Energy Certificates (RECs) are aimed at encouraging India’s growing renewable energy sector. All electricity distribution agencies are required to source a specific minimum of their electricity requirements from renewable energy sources. For each state, the RPO is fixed and regulated by the respective State Electricity Regulatory Commission. The RECs are market-based instruments that aid in achieving RPOs through trading at power exchanges.
Internal Carbon Pricing is a tool used by the private sector in India to reduce emissions voluntarily, so that they can channel investments into cleaner and more energy-efficient technologies to meet corporate sustainability goals. Currently many major Indian private companies such as Mahindra and Mahindra, Tata, Infosys, and Wipro, use ICP to lower their carbon footprints.
Can I participate in carbon trading?
Households and individuals at this stage, cannot directly participate in carbon trading, as carbon emissions calculations at such small scales are not very accurate. Households may be part of a larger trading scheme, where the carbon emissions of an area – for example, an entire city – are calculated, and used as measures to note increases/decreases in carbon emission profiles. The main issue with the carbon credit system currently, especially for small businesses or individual land holders, is that agencies that provide credentials for and evaluate carbon credit generation, charge very high fees, which may not be offset by the income generated from selling the carbon credits themselves.
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