TERI Decodes Union Budget 2022 on Green Growth
The experts at policy think-tank The Energy and Resource Institute (TERI) has decoded what Finance Minister Nirmala Sitharaman’s Union Budget 2022 had in store for areas of energy transition and energy efficiency, sustainable development and climate action.
February 02, 2022. By Manu Tayal
Dr. Vibha Dhawan, Director General, TERI, lauded the Budget’s commitment to Sustainable Development Goals (SDGs), said “The Union Budget is mindfully framed in line with SDGs and COP commitments. Several initiatives are included to facilitate energy transition, circular economy, and enhancing agroforestry.”
Dr. Dhawan pointed out that “mandating 5% of biomass use in thermal plants can significantly solve the stubble burning problem. Introducing special mobility zones with a zero fossil fuel policy is an unprecedented and much-needed initiative to combat climate change. It also creates a supportive ecosystem for energy service companies.”
Ajay Shankar, Distinguished Fellow, says Union Budget 2022 is a significant milestone in the transition to a green economy, said “The Budget breaks new ground for India’s transition to a green economy and the achievements of the goals announced by the PM in Glasgow in a holistic manner.”
Measures such as the use of biomass pellets for co-firing in thermal plants would improve air quality by reducing crop burning, he added.
Commending the Budget’s support for solar manufacturing capacity, RR Rashmi, Distinguished Fellow, observes the measure is vital for energy transitions. “The budget has rightfully announced large support for solar manufacturing capacity which is key to the energy transition.”
He added that “Very significantly, it has indicated an intention to strengthen the EPR (Extended Producer Responsibility) regime in 10 key sectors to promote circular economy. A few supporting fiscal/financial measures could have deepened the impact.”
Rashmi also draws attention to the exploration of alternative fuels through four pilot projects for coal gasification. “If successful on a lifecycle basis, this will help us free resources from large energy imports which can be redeployed for lower carbon sustainable growth,” he noted.
Shirish S Garud, Senior Fellow and Director, Renewable Energy Technologies, welcomes the government’s plan to raise funds through green bonds.
“It will raise finance for green projects at competitive rates.” Garud also added, “The budget has proposed enhancing agroforestry through private sector investments. This is a progressive step to increase carbon sinks and meeting NDCs.”
The focus on funds for reducing carbon intensity would promote new technologies and investments in renewables and energy efficiency, said Garud.
Dr. Shailly Kedia, Senior Fellow and Associate Director, Sustainable Development and Outreach, underscores the need for budgetary allocations for research and development of energy transition techniques.
“An amount of Rs 19,500 crore has been marked for Production Linked Incentive (PLI) for manufacturing of high-efficiency module for polysilicon. This is a welcome measure. Polysilicon is an important raw material in the solar PV industry. Along with budgetary allocations for manufacturing, India will have to ensure the supply of critical minerals,” she added.
IV Rao, Visiting Senior Fellow, draws attention to the “big focus on road infrastructure development, creation of a special committee for urban planning to plan zero-emission zones, building multi-model hubs, special mobility zones for EVs and a battery swapping policy.”
The government’s announcement to introduce a battery swapping policy demonstrates its commitment to promote clean mobility in India, noted Souvik Bhattacharjya, Senior Fellow, Resource Efficiency and Governance.
“However, what would be critical in ensuring EVs emerging as truly sustainable will be a source of electricity to be used for charging batteries. The emphasis on circular economy transition will not only enhance India’s productivity but also make India more competitive, reducing import dependence of materials, mitigating environmental challenges and creating long-term employment opportunities,” Bhattacharjya added.
Pointing out that the Budget’s push towards infrastructure is a huge opportunity for making climate-resilient development, Saurabh Bhardwaj, Senior Fellow, Earth Science and Climate Change, said, “With the Budget pegging India’s economic growth at ~9% this fiscal and giving a concerted push towards infrastructure, making such development climate-resilient is a huge opportunity to further safeguard the economic losses due to impending climate change impacts. This growth budget needs to be resilient as well.”
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