Time to Go Green

The pri­vate sec­tor should be given in­cen­tives to re­duce green­house gas gen­er­a­tion

Business Today - - CONTENTS - Ashok V De­sai The writer is a se­nior econ­o­mist and was chief con­sul­tant in the Fi­nance Min­istry from 1991 to 1993

It is April, but the tem­per­a­tures in north In­dia are al­ready touch­ing their June lev­els. By the time we get to June, they may well be even higher: the past few years have been break­ing max­i­mum tem­per­a­ture records, and so may this year. We think of the un­prece­dented heat only in terms of dis­com­fort and pal­lia­tives – a fan, a water cooler, an air con­di­tioner, or a trip to cooler climes – these are the times when peo­ple rec­og­nize the wis­dom of plant­ing a son or daugh­ter in Amer­ica or Europe. But, how­ever much In­dia may have pros­pered, most of its peo­ple are far from such fi­nan­cial com­fort as would en­able them to send a child abroad. For them, the costs of sum­mer heat are tan­gi­ble.

In a pa­per Robin Burgess of Lon­don School of Eco­nomics put out in March with other econ­o­mists, they ask how many ad­di­tional deaths un­usu­ally hot days re­sult in. They run cor­re­la­tions on fig­ures of tem­per­a­tures and mor­tal­ity in 1957-2000. For the United States, the an­swer is vir­tu­ally zero. For In­dia, sup­pose the long-term av­er­age tem­per­a­ture in a dis­trict on a par­tic­u­lar day in the year is 70-74 de­grees Fahren­heit (21-23 de­grees Centi­grade), and it goes up to 97 de­grees in one year. That day will see 0.03 per cent more deaths than av­er­age in the United States, but 0.74 per cent more deaths in In­dia. That may not sound much; but if the high tem­per­a­tures last for a fort­night, it will re­sult in 10 per cent more deaths.

The higher deaths are al­most en­tirely in vil­lages; ur­ban death rates are lit­tle af­fected by tem­per­a­tures. It could be be­cause vil­lagers have to spend more time in the open and are more ex­posed to sun­shine, or be­cause high tem­per­a­tures in­crease evap­o­ra­tion, re­duce crop yields, and leave farm­ers and agri­cul­tural work­ers poorer. And death is only the ex­treme; those mil­lions who are not dis­patched will seek re­lief that will cost resources and re­duce work done.

In­dia has done vir­tu­ally noth­ing to com­bat global warm­ing; in fact, it has im­peded in­ter­na­tional ac­tion at times. It is not the only coun­try to do so; and it be­lieves it has good rea­son to be ob­struc­tive, namely that its his­tor­i­cal con­tri­bu­tion to ac­cu­mu­lated green­house gases is small. But global warm­ing does not dis­tin­guish be­tween vir­tu­ous and vi­cious coun­tries; it af­fects all of them – the al­ready warm trop­i­cal coun­tries more than ones closer to the poles. They must all com­bat global warm­ing to­gether – by us­ing tech­nolo­gies that re­duce gen­er­a­tion of green­house gases. In­dia has been ask­ing ad­vanced coun­tries to share their knowl­edge of such tech­nolo­gies, with lit­tle ef­fect. Tech­nol­ogy is a valu­able as­set, and ad­vanced coun­tries want to be paid for its use – if they are pre­pared to part with it at all. It may be un­rea­son­able for them to deny In­dia its use; but such lack of rea­son is a part of na­tional sovereignty.

Hence it is in In­dia’s in­ter­est to ac­cu­mu­late such as­sets. It should in­vest in in­vent­ing or im­i­tat­ing such tech­nolo­gies; and since the gov­ern­ment of In­dia is not very good at tech­no­log­i­cal in­no­va­tion, it should give the pri­vate sec­tor an in­cen­tive to re­duce green­house gas gen­er­a­tion. The best way to do so is to tax fu­els that gen­er­ate green­house gases. In­dia’s en­ergy con­sump­tion is 650 mil­lion tonnes oil equiv­a­lent. The in­ter­na­tional price of crude oil is cur­rently $50 a bar­rel, or $350 a tonne. So, the in­ter­na­tional value of In­dia’s en­ergy con­sump­tion is $227.5 bil­lion or `13.65 lakh crore. Arun Jait­ley’s 2017 budget pro­posed to spend `21.47 lakh crore. A tax of one-third (33 per cent) on en­ergy would en­able the fi­nance min­is­ter to abol­ish in­come tax. A tax of a fifth (20 per cent) would be more than suf­fi­cient to abol­ish ex­cise du­ties. I think In­di­ans would be de­lighted to be rid of these vex­a­tious taxes, and would get down se­ri­ously to economise on en­ergy if they were en­er­gised by the end of these taxes.~

A tax of onethird (33 per cent) on en­ergy would en­able the fi­nance min­is­ter to abol­ish in­come tax

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.