Opinion
For an integrated resources policy
23 Feb 2011 |
Dr Maria Ligia Noronha
| The Hindu
It is time to think out of the box and develop policy and regulatory models that are unique to us, rather than adopt the sector specific imported model of independent regulators.
A high-power committee headed by Ashok Chawla has been constituted to look into the pricing, allocation and utilisation of natural resources. The recent cases of illegal mining and corruption, undervaluation of 2G spectrum and its allocation, pricing of natural gas, and the potential of shale gas have prompted this exercise, long overdue. Here is an opportunity, however, to put in place an integrated development and regulatory policy for natural resources development rather than opt for a limited agenda.
Several factors make the need for an integrated policy compelling. One, the rising prices and economic rents these resources generate require a revisiting of how the rent is appropriated, and of the arrangements and business models we have to allocate resources and share the rents between the developer and the state. Two, the resource and capacity needs of the constituent resource rich States need to be assessed. For, key resources such as oil, natural gas, minerals, coal and hydropower are owned by the States and controlled by the Centre. Three, the strategic aspects of coal, oil, base metals, and rare earth metals need a longer term perspective on their development and utilisation. Four, the often adverse environmental implications of development call for a context-specific, informed and inclusive debate on weak and strong sustainability criteria. Five, the social impact that their development creates, in the absence of a focussed attention on a more people-oriented resources policy, will result in inequitable and unfair outcomes and, increasingly, a reduced social licence to operate. Six, oil, gas, coal and minerals are exhaustible resources. Developing them today means we forgo the opportunity of developing them in future. It is important to ensure that some of the revenues earned from such development are put into intergenerational funds so that they generate income streams in perpetuity, as does the Government Pension Fund of Norway that is built on a share of its petroleum revenues, and invests the proceeds in income generating activities. A fiscal rule then determines what can be appropriated for budgetary purposes.
In India, as in many other countries, there is a tendency to treat these issues separately. But the time has come for us to think out of the box and develop policy and regulatory models that are unique to us, with a common architecture rather than merely adopting the sector-specific imported model of independent regulators. Given that resources in India occur in rich terrestrial or marine environments - and onshore resources in the midst of dense habitations - and that we are still in the early stages of their development, there is a strong case for an integrated resources policy.
Our work in these sectors suggests the need to engage with the following questions:
Should India consider having different business models for different minerals depending on their strategic and economic importance, rather than a uniform concession system for all? For example, oil and gas have adopted production sharing contracts (PSC) because of their strategic importance and value. Should we not think of production sharing contracts or rate of return contracts for iron ore, copper, lead and zinc, for greater resource control, to capture the resource rent more effectively, and to have options to take shares in kind that can be used to develop downstream industry in States? Not being able (or willing) to oversee or control the cost component in production sharing contracts should not be an excuse for not seriously engaging with this business model.
Inadequate approach
Should we not introduce intergenerational principles in the design of funds that we create out of our resource revenues? The current approach is to impose a cess on the sector and then have the proceeds go to a sectoral fund which is part of the Consolidated Fund of India, as is the case of the Oil Industry Development Fund, a model that is also proposed by the MMDR Bill 2010. This approach is inadequate and, going by the experience of the oil fund, does not recognise the intergenerational aspects of exhaustible resource development. The oil cess is not shared with the States. Assam and Rajasthan have been asking for a share in grants from the oil development cess or its reduction to accommodate a larger additional royalty to States to be used for local development. Resource revenues need to be transparently recorded and spent on current poverty alleviation and social development priorities, and also invested in future needs.
Should we not use more competitive bidding processes to allocate acreage, blocks, and sites to get better deals for States as argued by Chhattisgarh Governor Shekhar Dutt in his letter to the PMO on the MMDR Bill 2010? Competitive bidding processes or auctions capture the differential quality of the resource or the hydropower sites, and the desirability of resource to the entrepreneur, and result in better economic outcomes for the resource owner relative to discretionary allocations, as the economic agent is in a better position to judge the value of the resource and express this valuation through the bid or premium offered as compared to the assessments of government agents.
Should we not seek to integrate better economic, social and environmental regulations around natural resource development? Environmental regulation can result in reduced competition and create barriers to entry through, for example, the time involved in the permitting process, tradable pollution permits which benefit the dominant firms, etc. On the other hand, permissive entry policies or the absence of policy or its enforcement can result in excessive competition and entry which exacerbate the cumulative environmental and social impacts, as is evident in the mining in Goa and Karnataka.
Should we not revisit Centre-State relations in the context of environmental regulation of resource development? The current sharing of rights and responsibilities of environmental management and oversight tends strongly to favour the Centre, as against the need for much more distributed governance. There is a limited functional interaction between Central and State authorities and among relevant State level agencies. The role of gram sabhas, PRIs is limited or absent, even where decentralisation is provided for, the corresponding institutional and fiscal support is inadequate and, overall, the States are under no strict obligation to devolve functions on natural resource management to local bodies.
Resource federalism
Should we not focus on strengthening the institutions of resource federalism as we put in place more and more independent regulators which tend to centralise power at the Centre? Resource federalism was not an issue in the earlier phases of resource development, in that federal arrangements did not constrain the Centre's statist and centrist approach to it. However, economic reform and coalition politics are leading to new demands from the States. As the Centre seeks to accommodate them through a greater devolution of revenues and control, there is need to strengthen the institutions of oversight and rule enforcement, which involve all three levels of government. In fact, in this context, and given the poor regulatory performance of the mineral rich States in recent times, should we not have a diffusion of regulatory control through society by requiring a more pro-active disclosure of information in connection with the RTI, institutionalising social audits and participatory monitoring using indicators, tools and spatial databases? One of the most interesting developments using Google earth maps, for example, is the way people are now in a position to locate illegal mining and the dumping of overburden rejects, and create protests around it because they have the information they need.
Let logic prevail
21 Feb 2011 |
Mr R K Batra
| The Financial Express
Natural gas is a relatively nascent industry, and there are many issues which need to be speedily resolved for this industry to grow and prosper.
In its judgement on the Ambani dispute, the Supreme Court has said that the government must come out with a comprehensive policy on natural gas.
Companies that discover oil enjoy a tax holiday but the same is not true for gas. When companies drill, they find find either oil or gas or both. It seems unfair that those who discover oil get a tax benefit and those who discover gas do not.
After its initial enthusiasm, the government lost interest in the Iran-Pakistan-India gas pipeline but kept it alive through intermittent meetings. The Turkmenistan-Afghanistan-Pakistan-India gas pipeline is now being discussed and has the support of both the US and the Asian Development Bank. The government must now not dither but boldly confront and take a stand on issues of security, transit and transportation costs and landed costs considering that India will be at the tail-end of the pipeline.
The allocation policy of gas from the K-G basin, as formulated by the empowered group of ministers, leaves it open to interpretation. For example, within a sub-sector, if there are competing requirements, who gets the priority? For a project to be bankable, gas supply needs to be assured. In some cases, the argument has been turned on its head: first build the project, and then we will see if gas can be allocated. This is illogical. The system needs to be made more transparent and encouraging downstream investment.
There is a view that for a gas market to develop and price discovery to take place, a national gas grid with trading hubs has to be developed. But for a commercial entity to put up a gas pipeline (leave alone a national grid) there has to be an assurance of supply, consumption and a reasonable pipeline tariff. It would seem more logical for individual pipelines to develop over time to be eventually linked to organically form a grid instead of building a gas grid in anticipation of supply.
The role of regulator too needs to be looked into. The Petroleum and Natural Gas Regulatory Board Act gives the board limited powers, and even these have caused a turf war between the government and the board, leading to delays. While, the PNGRB Act was notified on October 1, 2007, section 16 was not notified. The section authorises the regulator to approve laying, building, operating or expanding a city or local natural gas distribution network.
Though the board had issued licences in six cities, it could not proceed with the bids for seven other cities following a restraint order by the Delhi High Court. The Union law ministry subsequently cleared a petroleum ministry proposal to notify section 16. Apart from preventing such long delays, there is a need to give more teeth to the regulator if it is to function effectively.
Meanwhile, in a positive development, the PNGRB has announced revised zone-wise tariffs for the main HBJ transmission pipeline and the newly constructed East West gas pipeline.
No momentum in distribution
24 Jan 2011 |
Mr Saurabh Gupta
| The Financial Express
The Electricity Act 2003 envisaged distancing the power sector from direct government control by setting up independent regulatory commissions so that power sector utilities can function as commercial entities, leading to sustainable operations.
Almost eight years have passed since, still state electricity distribution utilities are grappling with operational and financial inefficiencies, leading to high T&D and AT&C losses, high energy and peak deficit and large revenue gaps. In a true sense, power sector reforms have not really taken off in the distribution segment. Direct or indirect interference by vested interests remains a challenge for the regulatory bodies, and their complete independence remains a distant dream.
Power supply accounts for the bulk of a utility's cost. Forecasting demand accurately is a prerequisite for meeting the ever-increasing requirement of electricity. Any failure to undertake such assessments for short-, medium- and long-term scenarios leads to inefficient power purchase arrangements.
Despite the significant capital intensive interventions over the years, AT&C losses in the country have remained high. AT&C losses were around 28% in 2008-09. Power theft remains a key threat to the profitability and self-sustenance of the sector. The lack of metering till the distribution transformer level, innovative ways used by power thieves, local political environment in which the utility operates are some of the reasons that inhibit curbing of power theft.
The inefficient tariff structure is another area of concern. State electricity regulatory commissions (SERCs) have failed to work out a realistic and progressive tariff structure that reflects cost-to-serve and targets a reduction of cross-subsidy, promotes competition in distribution and bridges the revenue gap of utilities. The tariff structure is beset with direct and indirect subsidies (cross-subsidy). In most states, electricity is being supplied to the agricultural sector free or on nominal tariffs. Further, in most of these cases, direct subsidies are not provided by state governments, which widens the revenue gap for the utility.
Ideally, tariffs should be based on the cost of power supply to the respective categories. A comprehensive assessment of category-wise costs has not been done by most utilities, and the inherent consumer resistance to any increase in tariffs is generally attributed to supply side inefficiencies. Also, political sensitivity of the sector poses further hurdles to designing a viable tariff regime.
Thus, to enhance the efficiency and performance of the sector, regulatory commissions have to play a key role. Directives issued by the SERCs and interventions envisaged to reform the sector needs to be prioritised and a more focused approach is required. The very basic initiatives such as 100% metering at the consumer, feeder and distribution transformer levels needs urgent attention.
Also, studies on demand forecasting, cost of power supply and load research can help improve efficiencies. Teri is assisting regulatory commissions and utilities in such studies.
Use the new opportunities
09 Jan 2011 |
Dr R K Pachauri
| The Tribune
The year must mark a turning point in the implementation of the National Action Plan on Climate Change to achieve the higher level of energy security and sustainable development. The year 2010 has been a significant period in India's evolution as a country of global importance. The fact that the year ended with major world leaders visiting this country clearly shows that we are the focus of attention for the big powers which constitute the five permanent members of the Security Council. Significantly, leaders from all these five nations travelled to India during the year.
What is also very satisfying is the fact that India registered a very healthy rate of growth while many countries were struggling to register positive growth rates of even 2 per cent and continued to suffer unemployment rates which are unacceptably high.
But as we look towards the New Year in several respects 2011 represents a set of new opportunities, which we would be ignoring if we do not fully identify them and make the best use of them. In the energy sector, for instance, the world is moving to a distinctly different mix of consumption and supply. Growing concerns about energy security justify a substantial improvement in the efficiency of energy use and a shift towards renewable energy sources, simply because not only would fossil fuels cause serious environmental problems at the local level, but also add to questions of security of supply, particularly for India with our growing import dependence on fossil fuels.
Additionally, India would certainly be under pressure at the global level to control its emissions of greenhouse gases, even though historically India hardly contributed to the enormous growth in the concentration of these gases which has taken place since industrialization began in the countries of the developed world.
Keeping all these in mind the government has taken a long term and enlightened view, which blends our commitment to sustainable development with responsibility for dealing with the challenge of climate change in coming up with the National Action Plan on Climate Change (NAPCC). Underlying the NAPCC is also an attempt to achieve a higher level of energy security. However, the progress in implementing the NAPCC is still not tangible, and this is an area on which government, business and industry as well as civil society must focus during 2011. The Prime Minister announced the contours of the NAPCC on June 30, 2008. It is, therefore, time that we got down on a collective basis and with the involvement of multiple stakeholders towards implementing the provisions of this plan effectively.
To achieve desirable results will require a substantial amount of institutional innovation and reforms of some structures within the government that are directly involved in the implementation of the NAPCC. For instance, the country has set itself an ambitious target of 20,000 MW of solar based power generating capacity, which must come in place in almost the next 10 years. This is a gigantic task which requires innovative institutional arrangements to implement. What is also needed is a massive effort to involve not only the Central Government but also those at the level of states and districts down to the level of local government. To bring about use of solar energy and higher levels of energy efficiency in buildings, for instance, local government has to be part of building standards and codes and their effective enforcement.
In several other aspects of the NAPCC also, if we are serious about meeting the impending challenge of energy security, the growing impacts of climate change and contributing to the solution of this challenge at the global level, the year 2011 must mark a turning point in the implementation of the NAPCC, the blueprint of which is a laudable effort on the part of the government. The comprehensive nature of the NAPCC requires intervention across the board, and that would, therefore, bring about an effective shift towards a more sustainable pattern of development. This is clearly an area which merits the highest attention in the New Year and the involvement of every section of society.
Let’s face it
27 Dec 2010 |
Dr Leena Srivastava
| The Financial Express
We provide a major push to renewable energy forms including solar but seem to have thrown distribution reforms out of the door. States have set up electricity regulatory commissions but they are struggling to define their relevance.
The suspicion that India's energy policy has been adrift has been around for some time. We continue to totter along providing a major push to rural electrification through the RGGVY programme while at the same time emphasizing a decentralized distributed approach to energy provision based on some artificial geographical distinctions between areas to be covered by these initiatives.
The environment minister's statement in Cancun expressing India's apparent willingness to accept greenhouse gas emission limitation targets at some time in the future has drawn a lot of criticism from both opposition parties in the government as well as environmental activists. Undoubtedly India will, sooner or later, have to take on emission reduction commitments. If the world was to agree to fully compensating, in financial terms, for historical responsibilities then the pressure on India to start moving to lower emissions trajectories could be immediate. The important point to bear in mind here is that we are no longer talking of 'if' but 'when' India will take on commitments. As such, the sooner India internalises the domestic implications of potential international commitments the lower will be its costs, and the world's costs, of adjustment in the future. The rest is negotiating for 'a few dollars more' - and rightfully so - at the international level.
Climate change considerations may be just the glue needed to hold India's energy policy making together. Spanning issues of energy efficiency and renewable energy while at the same time providing compensation to maintaining the health of the forest sector - while rendering coal as the least desirable fuel form - climate change commitments would force the government of India to consistently and constantly review its energy policies for resource effectiveness. Recent paper submissions by Teri, both internationally and domestically, have highlighted the radical transformations that would be required in our energy development pathways under alternate scenarios of climate commitments. The most recent presentation in Cancun has highlighted the limitations of public finance to both support these transformations directly as well as to leverage private finances for the purpose. While it is debatable whether climate actions would increase the medium to long term costs of delivery of energy and related services, it is more certain that the initial investment costs in energy and transport infrastructures will be manifold higher. How India bargains away its rights to emissions is going to be critically important to its ability to absorb the costs of climate action.
Lighting a Billion Lives, a measurable initiative
27 Dec 2010 |
Mr Rajiv Chhibber
| The Financial Express
In the early 90', when the term CSR (corporate social responsibility) became a part of corporate India' lexicon, most Indian companies looked at it as a new term for an old practice - making donations to good causes or support communities around their factories. At the same time knowledge institutions like TERI (The Energy and Resources Institute) were of the view that CSR is multilayered, and there are activities beyond the normal that could be pursued by companies. That was perhaps one of the earliest calls in India to advocate CSR as an integral business principle.
Since then TERI' remit has included providing advice to companies on sustainability and sustainable development - technologies and the approaches that they should adopt to improve their profitability, competitiveness, and market share - without compromising resources for future generations and also to meet the challenges of climate change, which is bound to have a toll if steps are not taken in advance. In 2000, we set up the TERI Business Council for Sustainable Development India, an independent and select platform for corporate leaders to address issues related to sustainable development, which now has evolved into a strong industry body of 106 members coming from diverse sectors including PSUs, MNCs and private sector companies from across India. The focus - to guide the Indian corporate diaspora and encouraging businesses to develop a vision of a sustainable company, translate that vision into a management action plan and turn sustainability into a competitive advantage, hence changing the way companies see CSR as a new wine in the old community-development-and-corporate-philanthropy.
In the year 2007, while conducting its own research and study on socio-economic conditions and technological opportunities, TERI realized that 400 million people in India today have no access to electricity, and the global population was 1.6 billion worldwide. Tragically, it is very unlikely that the current generation among these deprived 1.6 billion would ever receive electricity in their homes. Against this background the initiative "Lighting a Billion Lives" was launched. This is based on the use of solar lanterns specially designed and manufactured on a decentralized basis. Typically, this activity is centered around one person in a village, usually a woman, who is able to charge a number of solar lanterns using a solar panel during the day and rents them out to all the villagers at night. The entire village benefits from clean, pollution-free lighting, which enhances their incomes and wellbeing. Over the last two years, the initiative has succeeded in illuminating around 30,000 households or 1, 50,000 lives spread over 560 villages across 16 states in India.
Today, Lighting a Billion Lives is a unique and measurable sustainability initiative that effectively demonstrates how Public-Private-People partnerships easily support rural schemes mooted by the government, particularly in the areas of health, education, environment, women' empowerment as well as rural development. The campaign has support from PSU' and corporates, among its various partners to aid the execution of the program at the scale at which it exists today, while providing the corporates with CSRs and other strategic benefits.
Some of the key projects that have been taken up by PSU' and Corporates towards Lighting a Billion Lives are:
1. Lighting up a KGBV establishment under Sarva Shiksha Abhiyan: Setting example of public-private partnership for a social cause, the Lighting a Billion Lives campaign commissioned a Solar Charging Station in a residential school at Podi Uproda village in the Korba district of Chattisgarh, under the sponsorship support of NTPC. The residential school has been set-up by the government under the Kasturba Gandhi Balika Vidyalaya (KGBV) scheme. The objective of KGBV is to ensure access and quality education to the girls of disadvantaged groups of society by setting up residential schools with boarding facilities at elementary level. KGBV tries to target the significant gaps in the enrolment of girls at the elementary level reaching out to the most excluded groups of children. The provisioning of solar lanterns at the residential schools established specifically under KGBV scheme of GoI has ensured availability of safe and environment friendly source of light (in the form of solar lanterns) after dusk. This has also helped in eliminating the dependence of these young girls on kerosene lit lamps which poses threats to their safety and health. The solar lanterns have also helped the tribal students in overcoming the impediments to learning and gaining knowledge that these young girls have to face due to non-availability or erratic supply of electricity after dusk.
2. Promoting innovative financing of solar charging stations: Lighting a Billion Lives entered into strategic partnership with YES Bank Limited to expand the reach of the campaign. As part of the collaboration, YES Bank shall work with TERI towards promotion of the campaign in two specific areas of partnership, namely design and implementing a scaleable semi-commercial business model for financing solar charging stations and developing fundraising programs/products at YES Bank for grant support to initiative. To begin with, the semi-commercial business model, being developed by TERI and YES Bank, will be piloted across 2-3 villages with divergent socio-economic conditions. Going ahead, YES Bank shall provide financing for at least 50 solar charging stations during the year and market the financing product to other financial institutions to support scaling up of the campaign in India. Earlier last month, RGVN (Rashtriya Gramin Vikas Nidhi) also announced its interest to draw synergies between its various livelihood programs and Lighting a Billion Lives.
3. Jagmag Desh Mera: In a bid to connect common people to the Lighting a Billion Lives initiative, Voltas partnered with the program. As part of this partnership, Voltas created a welfare fund called 'Jagmag Desh Mera Fund'. Anyone can participate in this movement and contribute by bringing home an energy-efficient Voltas Star Rated AC. Contribution could also be made from the savings in electricity bills. The funds collected were used to bring light to many villages.
4. Strategic Partnerships: Armed with the twin objectives of providing access to clean energy and enhancing the rural livelihood potential, Lighting a Billion Lives entered into a strategic partnership with leading sugar producer Mawana Sugars Ltd. and its sister concern Usha International Ltd. As part of this collaboration, stitching and sewing training would be extended to rural women at the Lighting a Billion Lives solar charging stations, in addition to the provision of solar lanterns. Two pilot villages have already been implemented in the Kaul village, which is around 2 kms from the Mawana Sugars Complex in Nanglamal (Meerut, Uttar Pradesh). While TERI is coordinating and monitoring the pilots at the central level, Mawana Sugars and Usha International are supervising the project at the village level.
Similarly leading photocopier company, Ricoh India joined hands with Lighting a Billion Lives to further channelize efforts in extending clean lighting to rural areas of India. The collaboration formalises sponsorship of at least 4 villages through an innovative scheme of exchanging old Ricoh photocopiers against new ones. The old photocopiers would be recycled by government approved recyclers and if possible, would be refurbished and donated to needy organizations by Ricoh. For each trade in, Ricoh would light up a family under the Lighting a Billion Lives initiative.
India Chapter of the IAA (International Advertising Association) chipped in along with media to create awareness about Lighting a Billion Lives and mobilize funds for the cause. Early last year in January, Water Consulting, a division of Mudra, was given the Creative Lantern award and was commissioned by the International Advertising Association to develop a print and TV campaign for the release. The response to this largest ever public service campaign attempted by the advertising industry helped in lighting up six villages thereby benefiting around 2000 lives.
The above are just a few of the numerous successful examples where one campaign has through enormous support from PSU' and corporates impacted thousands of lives. While corporates and PSU' may have utilized their CSR funds for the same, TERI is ensuring that the campaign, for long-term sustainability, has a high level ownership, with the ultimate aim of empowering communities to be informed, self-reliant, and able to manage their resources independently, which lead them to become agents of change for their own development. TERI not only has been successful in mobilizing resources for villagers, it created market based solutions in these villages, hence breaking the myth that CSR is just an 'investment strategy' devised to build an image, cultivate stakeholders and eventually push business. TERI' Lighting a Billion Lives program today is a pioneering model which showcases that strategy for developing a partnership and advocacy with the business sector must be carried out through evoking compassion, consideration and commitment as a good corporate citizen.
Whose burden is it anyway?
13 Dec 2010 |
Mr Saurabh Gupta
| The Financial Express
The need for promoting energy efficiency is well-known. Insufficient capacity additions, increasing environmental concerns and energy and peak shortages are key reasons why the country has to promote energy efficiency. According to the Integrated Energy Policy, the potential of demand side management (DSM) is about 15% of the total electricity demand. But despite that, implementation of demand side energy management measures remains poor.
By the Energy Conservation Act 2001, state-designated agencies (SDAs) should coordinate, regulate and enforce provisions of the Act in their areas. However, in most cases, the ministry of renewable energy's state nodal agencies are doubling up as SDAs without a commensurate increase in manpower and skill sets. As a result, not much progress has been made on the ground and these institutions continue to focus on promotion of renewable energy rather than energy conservation.
Besides, distortionary electricity pricing has inhibited the promotion of energy efficiency. Electricity prices in India are either directly subsidised by the state governments (especially for agricultural consumers) or are cross-subsidised by other categories such as industrial consumers, thereby, leaving little incentive for efficient utilisation of electricity for most.
The lack of motivation of utilities is also a barrier. The conventional theory that the primary business of the utilities is to sell electricity and not to save it still holds sway. The focus has always been on improving efficiency at the supply side, with the demand side more or less ignored.
This precisely explains the reason why dedicated DSM cells are either not being created by the utilities or, if created, remain dysfunctional. Further, there have been failures to capitalise on the learning from various DSM interventions.
Utilities have taken up several initiatives over the years to promote energy-efficient appliances through pilot projects. However, these schemes have been largely limited to the lighting segment and failed to translate into bigger programmes. The experience has not been utilised to develop programmes/schemes for other segments or sectors.
High initial cost and poor awareness and information about energy efficient products are some of the barriers that need to be addressed.
However, there is no single solution that can be prescribed to address these barriers. A mix of policy, regulatory, financial instruments and interventions are required to address these barriers and to promote energy efficiency in the country.
For greener pastures: Slowly but gradually, green jobs are becoming the order of the day
08 Dec 2010 |
Ms Himani Upadhyay
| The Pioneer
There is a colour distinction in the different kind of jobs that exist in the market today. White and blue collar jobs have become passé. Off late a new job category has emerged that has caught the fancy of many. It is referred to as 'green/low carbon' jobs and has become one of the most used phrases in the lexicons of politicians and corporates. For some, it is emergence of new employment opportunities in a limited job market and a route out of unemployment. For others, particularly for the environmentalists, they are crucial for combating climate change. With the attention that these jobs have garnered with respect to climate change action, it does not come as a surprise that what perhaps began as rhetoric to counter climate negativity is now developing into an area with extraordinary promises.
But not everybody is excited by this new category of jobs. Some argue that these are mere trendy phrases that have gained popularity and have ambiguous meanings and connotations with little agreement on what constitutes a green/low carbon job. As terms like low carbon jobs, green jobs, clean energy jobs, are often used interchangeably and therefore, cause confusion. Due to the associated ambiguities, common definitions often limit such jobs to certain industries that are generally regarded as green.
For example, in the US green jobs are often defined solely as those related to renewable energy and energy efficiency. The ILO refers to low carbon employment as "economically viable employment which reduces environmental impacts to sustainable levels". There are some which refer to employment in sectors that 'make up the clean energy economy', including energy efficiency, renewables, alternative transport and fuels as low carbon jobs. The UNEP recognises these jobs as either those that conserve energy or help realise alternative sources of energy and thereby accelerate the transition of global economies to low carbon pathways. However, there is also a wider interpretation of the concept looking beyond energy and linking low carbon issues to a broader set of environmental activities that include conservation and rehabilitation to preserve bio-diversity, restore degraded land, combat erosion and remove invasive aliens.
Irrespective of the hazy definitions, renewable energy investments are expected to rise. This can broadly generate two types of employment opportunities: Direct and indirect.
Direct employment includes jobs created in manufacturing, design, construction, installation, operation and maintenance of the different components of the technology. Indirect jobs refer to jobs created in the supply chain or those jobs that get created through 'multiplier effect'. For example, there are important jobs such as that of consultants who are key actors in the growth of renewable energy technologies as they play a vital role in the penetration of these technologies. Also professional profiles like those of energy auditors and energy managers are not directly linked with low carbon jobs but they often play an important role in promoting energy efficient technologies. Also it is important to consider that services provided by these indirect jobs are often a pre-requisite for deployment of low carbon technologies.
Of the many sectors that can offer low carbon employment, renewables contribute a significant number. Irrespective of the above arguments, jobs in renewables are likely to grow as industries, business and economies by large shift to renewable energy. These numbers are expected to increase in the next few decades as State and national Governments have mandated to increase the share of renewables in the energy mix.
Despite the failure of the climate negotiations at Copenhagen to reach a legally binding treaty to limit Green House Gas emissions, it is widely accepted that action with respect to construction of windmills, solar power and bio-mass plants will continue. This will not only have positive implications for energy security but also have environmental, economic, social, and technological development.
It is challenging to gauge the total number of green jobs that exist nationwide. The job of a welder at wind turbine factory is considered as a green/low carbon job, but what about the factory's accountant? While the first is direct job the latter is an indirect job.
India is emerging as one of the destinations with a huge low carbon employment potential. According to a TERI study, which assesses the potential of direct employment creation in India with respect to transition of energy sector to a low carbon pathway with a focus on the solar and wind energy sectors, notes that if the Government targets are achieved as scheduled, more than two lakh jobs could be created in the wind sector by 2020. For solar photovoltaic, these numbers add up to two lakh jobs. The study also notes that up to 10 million jobs have been estimated by various studies in the bio-fuels sector if Government achieves its target of village coverage and industrial bio-fuel production. Though these numbers are indicative in nature, they put forth a strong case for low carbon employment potential that exists in India and how it can be one of the important co-benefits of investment in the renewables.
The multiplier effect of promoting renewable energy sector is also expected to be substantial. For example, the jobs so created would require specialised skill sets both at technical and administrative level. There would be requirement for different types of professionals in R&D, planning, execution, operation and maintenance of technology.
An important step towards this would be to identify the gaps that exist in the present skill sets in the work force. Policies and programmes that facilitate capacity building and skill development could be incorporated in areas like the workforce with required skills are timely available for different stages of the technology. Also a parallel process could be initiated to identify appropriate national and State level authorities that can provide training and build capacity to address the gaps that exists. An integrated approach is thus required that considers the associated co-benefits while formulating policies and programme for these sectors.
Franchisee model has a long way to go
15 Nov 2010 |
Mr Saurabh
| The Financial Express
The franchisee system in power distribution has not taken off despite provision for central financial assistance. Out of 1,61,373 villages where Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) funds have been utilised, only 42% villages operate through a franchisee system.
Individuals were included in the distribution sector as franchisees to initiate public-private partnership at the lowest level, and to promote entrepreneurial capabilities of local youth. The Electricity Act, 2003 allows a utility to grant franchisees for certain functions in a distribution area.
Further, appointment of franchisees were made mandatory in villages where RGGVY fund is being utilised. The aim was to ensure revenue sustainability of rural distribution.
However, the absence of a grievance redressal mechanism is hampering the growth of the franchisee movement. The weak financial position of most franchisees operating in rural areas and their short contract duration of a year are not conducive to the stability of the franchisee business model. The delay in payment of incentives to franchisees is another major turn-off. These flaws need to be corrected to make the model attractive.
Utility employees look at the mechanism with suspicion and treat franchisees as sub-contractors rather than business partners. There appears to be an apprehension that the appoint ment of a franchisee could be a precursor to privatisation.
Teri\'s recent study on working of franchisees in states like Andhra Pradesh, Karnataka and Orissa has indicated encouraging results on loss reduction and consumer satisfaction. However, it has recommended further measures like periodic review to strengthen and speed up implementation of franchisees.
A regular review of the working of the franchisee model can be useful in reducing losses in rural areas. It has been observed that to fulfill their obligation of setting up franchisees under RGGVY, utilities are establishing a simple version of the franchisee model that is, revenue-based collection model. But the Centre\'s Rural Electrification Policy states that the franchisee should be linked to input energy of the area. The simple franchisee model should act as an introductory step. With experience, the basic model should be upgraded to an advanced version, to ensure sustainability of rural electricity supply.
There should be a time-bound shift from the simple model to a more comprehensive one. Clearly, successful implementation of the franchisee model requires immediate interventions at institutional, financial and operational levels.
Seek the peace dividend
15 Nov 2010 |
Dr R K Pachauri
| The Times of India
To write about other aspects of India's foreign policy in the wake of US President Barack Obama's visit may appear odd. But India has undoubtedly become a favoured destination for many world leaders with positive perceptions about its role in global affairs as it moves ahead economically. India still faces serious challenges in its relations with some countries. In this context, it is heartening that China's Premier Wen Jiabao is likely to visit before the end of the year.
India's economic success, despite our inability to wipe out large-scale poverty, is a clear driver of the interest the world is showing. Newsweek magazine recently came out with an assessment of different countries, in which India was ranked third for economic dynamism among low-income countries. It also ranked different world leaders against various criteria. Manmohan Singh was ranked highest as the leader other leaders love. The reasons for this distinction were that "the Prime Minister, a sophisticated former economist, played the key role in India's emergence as a world power, engineering the transition from stagnant socialism to go-go capitalism". Highlighting our prime minister's unassuming personal style "that really inspires awe among his fellow global luminaries", praise was also forthcoming on his being "modest, humble and incorruptible".
Singh has been uniquely successful in international relations, quite apart from leading India's economic transition. India's recent success in the international arena includes the nuclear deal with the US, a major strategic landmark. The growing warmth between India and the countries to the east is also an important strategic shift which would suit this country's long-term interests.
However, it is now time for India to fully realise and accept its position as a major player globally. Our relations with neighbours need urgent and concentrated action. Pakistan remains a dominant fixation in our foreign policy, but we have not yet come to grips with initiatives by which we can mend fences with our most important neighbour. India-
Pakistan tensions continue to sap the energy of the South Asian region as a whole and remain a major drag on closer cooperation within SAARC.
A change is long overdue, given that India was partitioned over 63 years ago. A generation has gone by while old animosities and prejudices have not. We still tend to view Pakistan in the light in which it existed 20 years ago. Our concerns about terrorism in that country and the dangers it holds for us are genuine and founded on reality. However, that is not Pakistan in its entirety. A large section of its population fervently seeks peace with India, particularly now that Pakistanis see themselves as victims of terrorist threats.
Symptoms of change in Pakistan are very clear, including in the media. A respected former sports official from Pakistan who attended the Commonwealth Games praised India effusively for the conduct of the Games and was obviously moved by the noticeably enthusiastic applause the Pakistani contingent received during the opening ceremony. Pakistani newspapers reported this, which would not have happened a few years ago. They now carry a substantial amount of news about Bollywood stars and their lives in a departure from past practice. Discussions with senior officials in Pakistan now reveal a deep longing for peace and security.
Born on soil now part of Pakistan, Prime Minister Singh has a unique opportunity to show boldness and resolve in mending fences with our neighbour. The extent of pride displayed by residents of the village Gah in district Chakwal, Singh's birthplace, perhaps far exceeds pride manifested in villages where Pakistan's own leaders were born.
On September 26 each year, Gah rejoices and celebrates Singh's birthday. This year was an exception because only two days earlier, his classmate from school, Raja Mohammad Ali, expired and the villagers were in mourning. A visit by our prime minister to this village purely on personal grounds would be a gesture that would stir sentiments of friendship in Pakistan. The opposition cannot fault this, given Atal Bihari Vajpayee's bold initiative to travel to Lahore.
Normal relations with Pakistan are imperative because India can never achieve its place in the world if its neighbourhood remains troubled and prone to meddling by outside powers. Singh has a unique window of opportunity for bold and timely action that future generations on the subcontinent would remember and be grateful for. If Great Britain and Northern Ireland can end decades of hostility and terrorism, there is no reason why India and Pakistan cannot live as friendly and peaceful neighbours.
Europe has provided a unique example of nations that have fought each other for centuries but are now bound together as a political and economic entity - the European Union. There is no reason why South Asia could not emerge at least as an economically integrated entity which would have lasting benefits for the hundreds of millions of the poor in this part of the world. India would then attain its full potential on the global stage.
If major strategic interests are to guide our external relations in the remaining years of the UPA government, a determined initiative by Singh to improve relations with Pakistan acquires overwhelming priority. A personal visit to Gah very early could transform attitudes across the border.