The environment is too crucial for the finance minister not to have highlighted it

When he started work in the Diesel Locomotive Works in Varanasi, no one thought that Dr Rajendra Pachauri would one day get a Padma Bhushan for his pioneering work in environment and energy conservation. And that he would go on to write 21 books. Director of the TERI for 21 years, today, he is internationally acknowledged for his work in areas of environment protection, energy conservation and sustainable development. Pachauri is also the vice-chairman of the Inter-governmental Panel on Climatic Change and member of the Institute of Global Environmental Strategies. As the euphoria over the latest Budget continues, he spoke to Roving Editor Mr Ramesh Menon on various crucial areas that are being overlooked, like environment conservation and sustainable development. What do you think of the Budget? The Budget will spur growth. But the time has now come for government and Parliament to define future directions empowering budgets to take decisions. The Budget cannot be left to become a victim of uncertainties. It is crucially important that investors and consumers are clear about the long time trends that economic reform is going to follow. If there is uncertainty about what this Budget will do, investors will hold back. In agriculture, for instance, there needs to be some kind of assurance of price regime so that they have the confidence to change agricultural practices. Year to year emphasis on what is contained in the Budget is a limited approach to policy making. Parliament should not only discuss the Budget but focus on long term thrust areas that will bring in sustained growth. Like what? The areas that need immediate attention are education, healthcare, poverty removal and empowering women to assert their rights. These are signs of a sustainable healthy society. One area that has not got the attention it deserves is poverty removal. Typically, we have schemes where we pump money to give temporary employment to people. We must remember the old saying that if a person is hungry, do not give him fish, but teach him to fish. We are not doing that. Our poverty alleviation schemes are basically temporary palliatives. It does not create the capacity or institutional strength for people to take their destinies into their own hands. That is crucially important. Poverty cannot be removed on a sustainable basis unless you empower local communities and teach them to do things on their own. How does one do that? We need to empower people with knowledge. Education is paramount. This is a major thrust area. Just as you require reforms in the power sector, you also need reforms in education. Look at the salary of a school teacher. Those who are shaping the lives of our future generations, are paid worse than peons. It is a shame. What we do now will show up 15 years from now in the education sector. What we need in the second generation of reforms, is a focus on some sectors where reforms are essential. Like science and technology. We need to ask if we should continue with organisations like ICMR or CSIR or do we need to replace them with something else. They have been around for decades and someone needs to ask what is it that they have delivered. What should be done? They need to be privatised. Let industry take over them. They would be in a much better position to reach their goals than continue as government supported white elephants. Do you think the second generation of reforms will see these changes? It will happen. But I do not know how long it is going to take. One way to ensure that it will happen is to start a debate on these issues as the public should be involved. Any change that you bring about will get stuck if you do not have public participation. Like you have seen with BALCO. How did the Budget deal with the environment? I am sad to see there is no mention of the word environment in the Budget speech. It does not send the right message for those who are destroying the environment and those who are benefiting from destroying it. One does not see any articulation of measures that would protect the environment and regenerate our natural resources. I think future budgets have to take this into account. The costs of a degraded environment are extremely high. The Budget speech had nothing on this. The environment is just too crucial for the finance minister not to have highlighted it in his speech. What needs to be done to ensure protection? We have to ensure that the 'polluter pays' principle is followed. Anybody who uses the services of the environment has to pay user charges. The polluter must pay. How can we ensure that natural resources are taken care of? There must be incentives through which natural resources can be conserved and regenerated. Just as we have incentives for investments in plants and equipment, we must have incentives for those who invest in healthy natural resources like healthy forests, good soil, clean air, clean water whatever. We have to build this into our budgetary practices. Let us talk of energy efficiency. With the opening of the economy and the increasing environmental pressure, it is becoming increasingly difficult for the small scale industry to remain competitive. Some provisions have to be made to assist small-scale industry to manage inefficient energy use. They need help to upgrade their technology as they would otherwise suffer greatly in a globalised economy. The finance minister has talked of energy audits and also a time barred programme for the installation of hundred per cent metering of electric meters. That is good. This should be good. In rural areas, consumers pay a lump sum for power consumption as they do not have meters. That leads to excessive consumption and overuse. Metering is the first step to ensure that we pay a rational tariff. It is important that we bring reduction of energy costs in manufacturing and all activities -- that will happen only if we use energy efficiently. There is an energy conservation bill that may get passed in Parliament but we need to provide resources like soft loans to the small scale industry to improve the efficiency of their operations. Is the TERI doing something in this area? We have developed new technologies in association will small scale units like foundries, glass units, brick industry and pottery industry. The small scale sector is a very good candidate for improvement in energy efficiency as they waste a lot of energy with their outdated technology that is inherently energy inefficient. What do you think are the barriers to successful implementation of environmental law? You cannot have a top-down approach. You need to involve the local community in the enforcement of these laws. Local communities should be empowered to modify them. You can provide a framework to legislation to take the right decisions. But enforcement has to be in the hands of local communities. Our laws do not carry out an assessment of the cost of compliance versus cost of avoidance. If the cost of avoidance is cheaper, people will necessarily go for avoidance. In that I include corruption. If someone finds it cheaper to pay an inspector a certain amount, and get away with it, he will try to do it. If local communities were responsible, corruption would go down substantially as those who are being affected by pollution will make sure that corruption which distorts environment compliance does not happen. The government is now talking of introducing CNG in the metros to begin with to tackle vehicular pollution? Can all this be done without a transport policy? We do not have a transport policy. And CNG is not the best option. A far superior alternative is to produce ultra low sulphur diesel from our refineries. But the refineries do not have the technology for it. Well, they have to install it. It means an investment. It is a cheaper alternative than relying on CNG. As it is, India has very little natural gas. Setting up the infrastructure for CNG stations is an expensive proposition. The cost of the conversion to CNG is high. It is a very expensive option. The government is now trying to do it in Delhi. Maybe, they will be able to do it in Delhi, but what will happen to other cities? We in Delhi feel that Delhi is India. Other cities do not have any options. Look at pollution checks. Everyone knows it is just a formality which can be completed with paying some extra money. Public transport in big cities is also in a bad shape? Private-public partnership is the answer. The government should not get into the operation. Licences are given to bus operators. It is the most ridiculous thing we could do in urban India. It should instead be given to well organised good reputed companies to manage it on a large scale. You will get better management and services. With the resource constraint slowing down power generation capacity, what can be done to bridge the demand-supply gap? The only solution is privatising distribution. Unless you are able to collect revenues from customers, the terrible financial condition of the state electricity boards will continue. People pay for the service they receive. The finance minister has highlighted this and most people believe that electricity should be free. There are vested interests that make sure of that. A lot of power is lost in transmission losses. The finance minister himself labelled it as theft and dacoity losses. It is not a technical loss, but a commercial loss. It is theft and pilferage. What would it amount to? No accurate estimates are available but it is anywhere between 35-40 per cent.At least half of it is theft. That is really very high? Yes, it is a scandal. A private distributor will not allow theft of his power. But in the state owned electricity boards there is a nexus between politicians, local goons, meter readers and consumers. Everyone makes money. One hardly ever hears of anyone getting prosecuted for stealing power? There would be embarrassing names if people are going to be prosecuted. There are politicians, bureaucrats, industrialists and businessmen who get huge amounts of power free. How can the share of renewables be increased in the energy supply mix? Unless it becomes a part of the mainstream of energy policy, nothing is going to happen. The finance minister talked of rural electrification. I wish he had used the word rural energisation so that you do not deal with only electricity and look at rural energy. Local communities then can easily use renewable energy instead of power from the grid. Rural areas is an attractive sector to start such work. Then there are urban locations where you could use solar water heaters on a viable basis. Start using photovoltaic cells to meet peak demand. Is this expensive? It is expensive. But look at the cost for meeting peak load demand. After all people are using diesel generators. If you compare all the costs, it is not all that expensive. It is within the range of fairly attractive technology and can be accelerated by regulation. Like a building regulation that every building must have a solar water heater. Then it will happen. In an apartment complex, one central heater will not cost much. It will be cheaper in the long run.