12 May 2024, NIICE Commentary 9133
By Kaustav A. Dass
While the European Superpowers were busy using their resources in maintaining colonies and fighting World War, the US improved its manufacturing capabilities eventually emerging as Super Power, and while they were engaged with military expansion, China worked on its manufacturing and banking sector and established as a power to be reckoned with. Over the years countries have established themselves as a significant force in theatres of military, economy as well as other spheres of influence, one such theatre which unfortunately has not been receiving enough focus but has bright prospects for countries especially India is “Renewable Energy”, similar to the position of Gulf Nations during the discovery of Oil.
Necessity for Renewable Energy Sources
In India, the importance of renewable energy was brought back to focus especially after the Hon. Supreme Court’s judgement in the MK Ranjitsinh & Ors. Vs Union of India & Ors, declaring that people have a fundamental right to be free from the adverse effects of climate change. Additionally, Mr. Sonam Wangchuk, who is the recipient of the Ramon Magsaysay Award as well as one of the leading climate activists in India observed a “21-day fast” to demand protection for Ladakh’s ecology.
Both these developments have come at a very crucial juncture when India is in the midst of its “Lok-Sabha Elections”.
Though several mainstream media outlets have not given enough coverage to such developments but they have been able to get significant attention among social media users where netizens have expressed concerns regarding whether enough attention is being taken to address the negative effects of climate change. Considering the damage which our environment has suffered, only radical steps can be undertaken which are not plausible at present circumstances as those steps will not only violate several individual rights but also destabilize the global economic situation leading to stock crashes, considering at present the fossil fuel corporations possess a very powerful position in national economics.
Importance of Indian Fuel Companies
In the Indian context, the Government owned enterprise namely IOCL (Indian Oil Corporation Limited) was one of the top 5 contributors to the Government Exchequer with revenues standing at $26.85 Billion whereas another Government Enterprise ONGC (Oil and Natural Gas LTD) contributed Rs.6,36,406 Million to Central Government Exchequer along with being the top spender for CSR activities. In terms of private entities, Essar Oil and Gas Exploration just in the year 2023 paid Rs 335 Crores ($401 Million) as Corporate taxes to the Indian Government.
Similar condition is observed in other countries like the US, Middle East, and European Union as well as South American Countries like Venezuela where Fossil Fuel Corporations play such a major role that the respective policy makers/Government representatives have to frame policies which efficiently facilitate their activities, this has also led the policy makers into dilemma between framing policies either for economic well-being of the nation or take some temporary risks for the long term benefit towards environment, but also with a political consequence for the ruling regime.
Dilemma for Policymakers to Implement Measures
In a situation where multiple stakeholders are involved, the policy makers/advisors to Government executives ultimately have a very difficult task of framing a policy which addresses everyone’s concerns, interests as well as probable future outcomes, this is what has to be done in this scenario as well where the Fossil Fuel Corporations have to transition from Non-Renewable to Renewable sources of energy production citing the tremendous environmental costs as well as projected sales of energy produced by Renewable Sources for the Corporations.
To some extent, the Government of India has over the years tried to take these measures but still, the question arises that why are we still a long way from our desired objective?
That is because taking the fossil fuel Corporations into confidence is just the initial step, there are still a lot of stakeholders who need to be brought on board which include Companies across sectors such as Power, Automobiles, Logistics etc, which can only happen if their sales are on the positive side.
Just considering the automobile industry in India, a company like TATA Motors which has committed to achieving “Net-Zero” Green House gas emissions by 2030, but considering the practical realities of sales despite having an EV segment TATA Motors has to continue with their petrol-based variant. For example, TATA Nexon has two variants, one in a petrol-based variant and the second in an Electrical Vehicle variant. If we compare the price of both the variants-
- TATA Nexon (Petrol): 8.10 Lakhs
- TATA Nexon (EV): 14.49 Lakhs
Note- The prices are the average across car-selling platforms.
From the above information, it can be observed that the EV variant of TATA Nexon costs 25 to 30% higher due to factors such as battery and other maintenance costs.
Additionally, there are not enough charging stations or coverage in rural areas which creates more disadvantages for buying Non-Petrol based vehicles, resulting in unintended demand for petrol-based vehicles which the automobile companies have to fulfil and as a direct consequence the demand for fossil fuels increase which the Corporations intend to financially capitalize despite their best intentions to encourage renewable energy production.
This is how the situation is even in the Power Production sector where even today Coal is the main source, especially for rural or small towns due to it being a low-cost and abundant supply in comparison to Solar power generation or other renewable ways. Hence it can be said that it is the economic factors among the common public that are driving the increasing consumption of Fossil Fuels and making an impact on our environment. This is where Government intervention is necessary so that it eventually affects the survival of our future generations.
As the phases of General Elections have begun, it is expected that NDA is coming back to power which has given hope that several steps taken by the present NDA Government towards sustainable development will be continued with more efficiency.
Initiatives of the Indian Government
Since 2014, the Government of India has allocated Rs. 19,700 Crores ($2.36 Billion) as part of its “Green Hydrogen Mission” in order to transition towards a “Green Economy”. In addition, the “GOBARDHAN” scheme has been launched with the objective of using equipment which can be powered through renewable sources of energy as well as turning farm waste into energy sources.
India is not the only country that is looking to enhance its ability to use renewable sources of energy. As per the International Energy Agency, almost 3,700 GW of Renewable Energy capacity will be built by over 100 countries during the period of 2024-28 and this is where India is in a position to gain a significant position in the World which was once attained by the Gulf soon after discovery of oil.
India is blessed to be in a favourable Geographical position (which is near the Equator) as a result receives Sunlight for most of the year which is beneficial for generating Solar Energy, additionally over 7,500 Kms of coastline poses the potential for generating a good amount of wind energy as well as abundant land resources/area gives India the potential to be a reliable exporter of renewable sources of energy which will eventually be beneficial for India’s national economy.
In the year 2023 India’s annual service export stood at $345 Billion Dollars as per the UNCTAD report and with capabilities of exporting renewable energy resources, India can move forward to increase its exports with the objective of being a $5 Trillion economy.
Kaustav A. Dass is a Master’s Graduate in Public Policy from St. Xaviers College Mumbai and is presently an Intelligence Analyst/Executive in a political consulting firm Showtime Consulting.
