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Mrunal [Economic Survey Ch12] Sustainable Development, Climate Change (Part 3 of 3): PAT, RPO, REC, Cap-n-trade Print
[Economic Survey Ch12] Sustainable Development, Climate Change (Part 3 of 3): PAT, RPO, REC, Cap-n-trade
1. Climate financing 1. Taxation 2. Subsidies 3. Funds and Technology Transfers 1. International Funds 2. Desi Funds 4. Market Based 1. PAT 2. RPO 3. REC 5. Cap n Trade vs Carbon Tax 2. Green National Accounts 3. Clean Energy challanges 1. Nuclear 2. Wind Power 3. Solar Power 4. Mock Questions
Climate financing
In all convention/conferences/protocols related to environment, climate change, wildlife protection and biodiversity: there are three gangs with three motives. Gang What do they want?
1. LDC/vulnerable countries We are victims= Give us CA$H. 2. India, China and Developing countries 3. US, EU and Developed countries.
Why should we pay all CA$H? China and India should also do something!
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Mrunal [Economic Survey Ch12] Sustainable Development, Climate Change (Part 3 of 3): PAT, RPO, REC, Cap-n-trade Print
So, What is the Common Factor here? CA$H. Whether you want to promote sustainable development, or you want to reduce green house gases (GHG) emission or you protect biodiversity or you want to win election you need truckload of CA$H. We can classify the cash streams based on who is the prominent player Government Taxation Subsidies Funds Market CDM under Kyoto protocol PAT and ESCert REC and RPO
Taxation
An environment or green tax is imposed on a product that damages the environment, to reduce its production or consumption. This is in line with the polluter pays principle.
Coal Cess
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Mrunal [Economic Survey Ch12] Sustainable Development, Climate Change (Part 3 of 3): PAT, RPO, REC, Cap-n-trade Print
Subsidies
Destructive to environment
When Government provides subsidies on diesel, kerosene, fertilizers: often they pose a threat to the environment. for example 1. Cheap diesel a. Menace of SUVs= air pollution. b. Excessive use of diesel pump sets = groundwater depletion. c. Use of tractor as a transport vehicle. 2. Cheap fertilizer = excessive use= soil degradation. 3. Cheap kerosene = mixed with petrol = air pollution. Hence there is need to rationalize subsidies to make sure they dont create havoc on environment.
Funds
Only listing the prominent ones
International Funds
Provides funding to reducing global emissions from deforestation and forest degradation in developing countries. REDD= Reduce Emissions from Deforestation and Forest Degradation Under UNFCCC. to transfer money from the developed to the developing world, so they can combat climate change.
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UN-REDD Program
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Mrunal [Economic Survey Ch12] Sustainable Development, Climate Change (Part 3 of 3): PAT, RPO, REC, Cap-n-trade Print
provides funding to LDCs preparation and implementation of national adaptation programmes of action (NAPAs). Under UNFCC, administered by Global Environment Facility (GEF).
financing channeled through the Multilateral Development Banks (MDBs) like ADB, African Development Bank etc. World bank act as trustee
Desi Funds
National clean energy fund (NCEF)
Money collected by imposing Cess on coal. Government expects to collect 10,000 crores under this fund by 2015. NCEF will support projects, programmes and policies that promote clean energy technologies. When forest land diverted for non-forestry purposes, the user agencies have to pay money into Compensatory Afforestation Fund. This money is used for Green India Programme (to increase forest cover) + also for wildlife protection. for in situ conservation of genetic diversity of indigenous crop varieties, at Panchayat level.
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Mrunal [Economic Survey Ch12] Sustainable Development, Climate Change (Part 3 of 3): PAT, RPO, REC, Cap-n-trade Print
In the Twelfth Five Year Plan, the PAT scheme is likely to achieve about 15 million tonnes oil equivalent of annual savings in coal, oil, gas, and electricity. Some experts argue that PAT is not very effective because it is one type of capn-trade scheme. Instead of that, we just should just put some type of carbon tax on the polluters.
Certainty to both company and government. (because for X tonnes of CO2 emission, company will have to pay Y rupees as carbon tax.)
Long-term signals from cap-andtrade are less powerful because of above cost-uncertainty. Taxation sends clear signals and impetus for example, Entrepreneurs for behavioral changes. choice of the type of power plant (sub-critical or supercritical). Need to create a market monitoring agency to supervise the trade of those Can be collected by existing Tax
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Mrunal [Economic Survey Ch12] Sustainable Development, Climate Change (Part 3 of 3): PAT, RPO, REC, Cap-n-trade Print
permits/certificates.
authorities.
Carbon tax covers the entire economy, including households and other units This leaves out many small, medium or impossible to reach in a cap-and-trade unregistered organizations (who mechanism. Because increase in tax affect together may release significant the price of product, consumer behavior portion of the emissions). and many units indirectly associated with the sector. (e.g. car mechanic, numberplate painter.) Can be more easily manipulated to allow additional emissions. For Less chances of manipulation. Because example, if permits become too government will need parliaments approval pricey, then government might have to to change taxes. sell or distribute more permits to keep the price reasonable. Political pressures and lobbying could Political pressures and lobbying could lead lead to different allocations of to exemptions of sectors and firms. allowances. For example if Example again if Automobile companies Automobile companies give more give more election donation to ruling election donation to ruling party then party then government might exempt the government will increase their whole automobile sector from carbon tax. Quota/cap/limit for CO2 emission.
RPO
RPO target define how much electricity in the country is estimated to be produced from renewable energy sources (=green electricity) Year 2009 2012 2020 %Green electricity (in total electricity production) 5 7 15
Under RPO mechanism, the DISCOMs, Captive Power Plants, and Open Access Consumers have to purchase certain the minimum level of renewable energy (out of total consumption). State Electricity Regulatory Commission (SERC) look after this matter.
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Mrunal [Economic Survey Ch12] Sustainable Development, Climate Change (Part 3 of 3): PAT, RPO, REC, Cap-n-trade Print
the owner of the REC certificate can claim that he has purchased renewable energy.
Wind Power
Electricity generated by a wind turbine is highly sensitive to wind speeds. Therefore global practice is now to build towers in the range of 80120 m, it significantly increases the power generation potential. Size of wind turbines has increased. Earlier turbines were typically less than 1 MW, the recent designs go up to over 5 MW Taking these into consideration, the wind potential in India is now estimated at about 103000 MW for 80 m hub height. India also has considerable off-shore wind potential, particularly in Tamil Nadu and Andhra Pradesh-which is yet to be exploited. We could safely target a wind capacity addition of 30000 MW by 2020.
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Mrunal [Economic Survey Ch12] Sustainable Development, Climate Change (Part 3 of 3): PAT, RPO, REC, Cap-n-trade Print
Variation
Wind power has significant seasonal and even intra-day variations. It may lead to a situation, where either the wind generation cannot be utilized, or when the wind suddenly dies down, Thus the loss of electricity generation will impact grid stability and operation. So we need to complete the Wind capacity addition by other energy sources, which have a quick ramp-up time. For example pumped storage hydro, opencycle gas turbines, compressed air and high power density batteries.
Solar Power
So far not been effective in augmenting rural power generation, because
Technology
At present there are two main technologies for solar cells
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Mrunal [Economic Survey Ch12] Sustainable Development, Climate Change (Part 3 of 3): PAT, RPO, REC, Cap-n-trade Print
Expensive but dominates the global market If more R&D is done, this can become way efficient than crystalline silicon.
Rapidly growing telecom sector provides an excellent synergy for augmenting solar power in rural areas. At present there are close to 0.2 million telecom towers and about 40 per cent of these are in the rural areas. Solar power should be used to run them.
Mock Questions
1. Sustainable Development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs. This definition was given by a. UNFCC b. UNESCO c. Brundtland Commission d. None of above 2. What is the theme of 12th FYP? a. Faster, More resilient and inclusive Growth b. Rapid, More sustainable and resilient Growth c. Faster, More Inclusive and Sustainable Growth d. None of above 3. Which of the following is not a direct mission under NAPCC? a. National mission on Sustainable Habitat b. National mission on Strategic Knowledge for Climate Change c. National mission on reduction of Green house gas emission d. National mission for sustaining the Himalayan Eco System 4. What is the purpose of National mission for Green India? a. Incorporate green technologies in Industries. b. Incorporate green technologies in residential and commercial buidlings c. Increase R&D spending for eco-friendly and energy efficient vehicles and electricity appliances. d. None of above. 5. What is Indias voluntery committment for climate change? a. by 2015 India will reduce the GHG emission emission by 20-25% of 1990 level b. by 2020 India will reduce the GHG emission by 20-25% of 2005 level c. by 2020 India will reduce the GHG emission intensity of its GDP by 2025% of 2005 level d. None of Above 6. which of the falling subject is not part of the State list? a. Fisheries b. Prevention of Animal diseases
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Mrunal [Economic Survey Ch12] Sustainable Development, Climate Change (Part 3 of 3): PAT, RPO, REC, Cap-n-trade Print
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c. protection of wild animals and birds. d. Taxes on animals and boats Correct Statements a. The Biological Diversity Act was enacted under the National Action Plan on Climate Change (NAPCC). b. National Action Plan on Climate Change (NAPCC) contains National mission on Coastal protection, as one of its 8 mission. c. Both d. None Correct Statements a. The prime source of money for Compensatory Afforestation Fund is cess on petrol and diesel. b. National Gene Fund is meant for ex-situ conservation of medicinal plants in botanical gardens. c. both d. none Correct Statement about PAT (perform, Achieve and Trade) scheme a. It provides subsidy to MSME sector for increasing export. b. Is administred by DG export under Commerce Ministry. c. both d. none Partha Dasgupta Committee is associated with a. Western Ghats b. Himalayan Ghats c. Green National Accounts d. None of above Correct Statements a. Blended cement more emissions-intensive than ordinary Portland cement. b. Majority of the coal based power plants in India are based on Ultra super critical technology. c. Both d. None Energy Conservation Building Code a. is designed by Ministry of New and renewable Energy b. is meant for only residential buildings in India c. both A and B d. Neither A or B GRIHA stands for a. Green Rating by Indian housing association b. Green Rating for Integrated Housing Accreditation c. Green Rating for Integrated Habitat Assessment d. None of above SVA-GRIHA rating system is a. designed by CSIR b. for big industrial establishments in SEZ areas.
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Mrunal [Economic Survey Ch12] Sustainable Development, Climate Change (Part 3 of 3): PAT, RPO, REC, Cap-n-trade Print
c. Both d. None 15. Bachat Lamp Yojana a. is a scheme developed by Ministry of New and Renewable energy b. Provides subsidy for buying solar based LED lamps. c. Both A and B d. Neither A or B 16. Electro-luminescence is responsible for producing light in a. CFL bulbs b. Halogen lamps c. LED lights d. None of above
URL to article: http://mrunal.org/2013/05/economic-survey-ch12-sustainabledevelopment-climate-change-part-3-of-3-pat-rpo-rec-cap-n-trade.html Posted By Mrunal On 16/05/2013 @ 14:59 In the category Economy
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