July 6, 2009

Doing Nothing Fast

FROM- Red Green and Blue

No Funds Allocated for Clean Energy, Climate Change Mitigation in India’s $200 Billion Budget

India’s Union Budget for financial year 2009-10 did not contain any provision for expenditure in promoting clean energy and mitigating adverse effects of climate change. The Indian Finance minister failed to provide any concrete figures that his government would spend in increasing clean energy systems and moving to efficient and cleaner industrial processes including power generation.

Last year the Indian Prime Minister unveiled a National Action Plan on Climate Change just before the crucial G8 Summit in Japan which outlined eight priorities of the Indian government to increase the use of renewable energy. The action plan did not, however, include how the government intends to achieve the goals it had set up. Green groups had been waiting for the government to announce strategy to achieve these goals but the finance minister did not allocate any funds for these goals.

The National Action Plan on Climate Change unveiled last year, outlines our strategy to adapt to Climate Change and enhance the ecological sustainability of our development path. Following this, eight national missions representing a multi-pronged, long term and integrated approach are being launched. I propose to provide necessary funds for these missions.

Sadly, these plans seem to be ‘too long termed’ to set aside some funds for them. One of the major goals in the national plan was to promote solar energy use on a wide scale however, no funds or tax benefits were announced in the budget. The minister did, however, announce more than $20 million in grants to five institutes involved in research related to forests, geology and ecosystem.

Funds have been allocated for various pilot projects like housing projects for the poor but the minister failed announce funding for the proposed feed-in tariff scheme. A public-private partnership company has come up with a plan which calls for rebates for home owners who wish to install solar panels and sell surplus power to the company. The company has set up two pilot projects to study the prospects of the proposed plan. The plan is part of the Delhi government’s climate change mitigation plan 2009-12 but the minister failed to even mention it.

The plans calls for 40% subsidies to the consumers however the chief minister of the national capital New Delhi hinted that her government was already providing solar subsidies and would look into the matter. The state government is not in a healthy financial condition as it has spent huge amounts of funds in public transport projects and in preparation of 2010 Commonwealth Games. Therefore it is clear that the central government has to take the initiative to provide subsidies to the consumer.

Last month India’s New and Renewable Energy Ministry announced a plan to provide $100 Billion in solar subsidies over the next 20 years an increase solar energy generation to massive 20,000 MW from the current 2 MW. Again neither the Renewable Energy ministry nor the Finance ministry care to address the financial and funding aspects of the scheme.

Indian government’s failure to announce or even mention concrete goals for reducing carbon emissions and promoting clean energy mirrors the stance it has taken in the past during international negotiations for the next climate treaty. India has made it clear that it will not accept any mandatory emission reduction goals and the developed countries should not push for any clause demanding emissions cuts from developing countries in the text of the climate treaty.

With no clear funding programs for the ambitious schemes announced it seems that the Indian government is eying the international adaption fund that the developed countries are required to form in order to provide financial help to developing and poor countries to access cleaner technologies. Such an approach would greatly harm India’s image as an important and active player in the global fight against climate change.


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