Carbon market on the anvil in line with emissions trajectory
The government plans to create the Indian Carbon Market (ICM), where a national framework will be established with the goal of decarbonizing the Indian economy by pricing Green House Gas (GHG) emission through trading of Carbon Credit Certificates. For this reason, the Carbon Credit Trading Scheme is being developed by the Bureau of Energy Efficiency, Ministry of Power, and Ministry of Environment, Forest & Climate Change.
Since India already has a market mechanism based on energy savings, the new Carbon Credit Trading Scheme would strengthen efforts to transition to a more sustainable form of energy by expanding the focus to include all possible energy sectors in India. In order to meet the climate goals, GHG intensity benchmarks and targets will be created for these sectors and will be in line with India's emissions trajectory. Based on how well these sectoral trajectories are doing, carbon credits will be traded. Additionally, it is anticipated that a voluntary system will be developed concurrently to stimulate GHG reduction from non-obligated industries.
In addition to defining the necessary validation, registration, verification, and issuance processes, the ICM will develop methodologies for estimating carbon emissions reductions and removals from various registered projects. Guidelines for the emissions scheme's Monitoring, Reporting, and Verification (MRV) will also be developed after consultation. The establishment of an extensive institutional and governance structure with clear roles for each party involved in the implementation of ICM is planned. All entities will have their capacities built up in order to gain new skills in the area.
Through the purchase of emission credits by both public and private entities, the ICM will activate new mitigation opportunities. In a developing economy like India, a well-designed, competitive carbon market mechanism would facilitate the sector-wide and entity-level reduction of GHG emissions at the lowest possible cost and accelerate the uptake of clean technologies.
With its ambitious Nationally Determined Contributions (NDC), India has been at the forefront of the fight against climate change. The government is creating the ICM to make it easier to meet current goals as well as India's upgraded climate targets. The ICM will help to achieve the NDC goal of reducing the GDP's emissions intensity by 45 percent compared to 2005 levels by hastening the shift to a low-carbon economy. (Outlook India, The Hindu)
The Delhi water row cannot be decided by courts: Haryana
The Delhi High Court has been informed by the Haryana government that the Yamuna water supply issue between Delhi and Haryana cannot be decided by the courts. To remedy the problem, the Delhi government could contact the Centre or the relevant river boards. In the wake of the summer season, the Delhi Jal Board (DJB) petitioned for an unhindered supply of clean water to Delhi and the removal of sand mining blockades from the river. Haryana opposed this request.
The Haryana government asserted that the Delhi government's dispute over the share and allocation of water is not maintainable in court and further stated that the Delhi government or the Delhi Jal Board (DJB) should raise the issue of any additional water demands with the Upper Yamuna River Board, the Bhakra Beas Management Board, or the federal government in accordance with the Interstate River Water Disputes Act, 1956.
The document was submitted by lawyer SB Tripathi in response to DJB's request in an ongoing lawsuit from 2013 for clean water and the removal of bundhs. In the complaint, Haryana was accused of disobeying earlier court orders issued in May 2019 to supply Delhi with its fair share of water and to prevent illegal sand mining. The DJB, through advocate Sumit Chander, also claimed that despite the order, images from last month showed such structures obstructing the water flow as a result of acute water shortage during the summer.
In its fresh application, DJB had contended that the water coming from Haryana contained several pollutants, which required the intervention of the court, and surveys showed that the main source of pollution in the Yamuna was Haryana. The directions had come after a committee, constituted by the high court to inspect whether bundhs were found at 11 locations on the river Yamuna. (Hindustan Times)
RBI report calls for a sector-specific approach to green transition
The Reserve Bank of India (RBI) has focussed on climate change as the primary theme in its Report on Currency and Finance (RCF) for 2022-23, a theme-based annual report on contemporary issues concerning central banking and macroeconomic issues in India. This year’s report “Towards a Greener Cleaner India” emphasises climate goals as a policy priority and analyses the potential macro-financial consequences of climate change for India.
The report emphasises how fiscal policy influences energy investments and transition. It explores the intricate and non-linear interactions among the economy, financial systems, and related policies, as well as the function of central banks like the RBI in addressing climate change. According to this, a sector-specific approach to the green transition can only be successful if reasonable and consistent progress is made across all significant carbon-emitting industries.
According to the report, fiscal policy plays a significant part in accelerating the switch from fossil fuels to renewable energy sources. It also emphasises the urgent need for a green taxonomy, a classification scheme that determines whether an investment is sustainable or not. According to experts who contributed to the report's preparation, India has prepared its green taxonomy but has not yet made it public. The report examines the physical indicators of climate change as well as global and Indian policy initiatives. Following that, it talks about the macroeconomic impact of climate change in India, how it affects the financial industry, and policy alternatives to mitigate climate risks.
For India to reach the net zero target by 2070, the GDP's energy intensity would need to be reduced rapidly -- by about 5% annually -- and the country's energy mix would need to be significantly improved -- to about 80% renewable energy by 2070-71. The report estimates that India will need at least 2.5% of GDP in green financing annually through 2030, putting a value on the size of the effort required to combat climate change.
The impact of climate change on various industries, including agriculture, transportation, electricity, and mobility, is covered in the report. Challenges related to sectoral green transition are also highlighted. According to the report, the industrial sector has the largest fixed investment and is the hardest to decarbonize because it uses so much energy.
In terms of agriculture, the report identifies a pattern of climate change's effects on the industry and claims that horticulture, particularly perishable products like vegetables, is more affected because horticulture crops are more vulnerable to extreme weather events. The impact on foodgrain production appears mild in comparison to this, possibly as a result of the varied geographical distribution of foodgrain production and the localised nature of climate events. (Mongabay)
Telangana urges the Centre to review the report on the Palamuru-Rangareddy irrigation scheme
The Palamuru-Rangareddy Lift Irrigation Scheme (PRLIS), which is being built on the Krishna River, has been the subject of a significant protest from the Telangana administration to the Centre after it rejected its detailed project report. The Central Water Commission (CWC) has been encouraged by the state to re-examine the findings and approve the project as soon as possible.
The PRLIS being constructed at a cost of ₹35,000 crore envisages lifting water from the foreshore of Srisailam reservoir to the proposed KP Laxmidevipally Reservoir near Shadnagar in Rangareddy district, irrigating upland areas of Nagarkurnool, Rangareddy, Narayanpet, Mahbubnagar, Vikarabad and Nalgonda districts, for an ayacut of 10 lakh acres, besides providing drinking water to en route villages and Greater Hyderabad Municipal Corporation, besides industrial use.
The Krishna Water Disputes Tribunal-II has yet to rule on the DPR, according to the CWC, thus it cannot be examined until then. The goal of the project is to extract 45tmcft (thousand million cubic feet), which will be used when Godavari water is diverted to the Krishna River.
Telangana's chief secretary said that all of the CWC's reservations about the project had been addressed in detail, thus the Centre shouldn't have any trouble reviewing the DPR. “How did the Centre grant permissions to the Upper Bhadra irrigation project in Karnataka, in addition to according it the status of a ‘national project’. How are the norms different for Telangana and Karnataka?” he asked. (Hindustan Times)
The Gujarat cabinet approves a land distribution plan for projects involving green hydrogen
Land parcels totalling 1.99 lakh hectare have been set aside for five significant industrial houses under a drafting land allocation strategy for green hydrogen projects that the Gujarat government has approved. The action is being taken as India works to make a significant transition to producing green hydrogen, and as the government develops a programme of incentives to promote its production. The state government's energy department has reviewed the power plans of five states in preparation for the strategy, which would unify all energy plans.
With a security deposit of Rs 2,998 crore, the state cabinet approved the allocation of land to Reliance New Energy Limited, Adani New Industries Limited, Torrent Power Limited, ArcelorMittal Nippon Steel India Limited, and the Welspun Group. In contrast to the firms' requests for 3.26 lakh hectares, 1.99 lakh hectares were authorised on the basis of a 40-year lease at a cost of Rs 15,000 per hectare, with the government earning about Rs 299 crore. With a generation of 39.95 lakh metric tonnes of green hydrogen, the total quantity of renewable energy using green hydrogen on the projected acreage is expected to reach 99,814 MW. The state government of Gujarat is scheduled to soon announce an initiative to promote the generation of green hydrogen. (The Times of India)
This is a roundup of important policy matters from May 1 - May 15, 2023.
/articles/government-plans-develop-carbon-credit-trading-scheme-decarbonisation