<\/p>\n
News: <\/span><\/b>Recently, in the <\/span>Conference of Parties (CoP-26)<\/span><\/b> of the UNFCCC held at Glasgow in November 2021 several partner countries were seen committed to concrete action plans to contain global warming under the threshold of 1.5 degrees Celsius.\u202f<\/span>\u00a0<\/span><\/p>\n Climate change is bound to impact human lives and the global economy. This is going to be at an exceptionally <\/span>high scale <\/span><\/b>in the coming future.\u00a0<\/span>\u00a0<\/span><\/p>\n After China and the United States, India is the <\/span>third-largest emitter<\/span><\/b> of the Carbon dioxide. Thus is a key player in emissions reduction.<\/span>\u00a0<\/span><\/p>\n As per the <\/span>IEA\u2019s India Energy Outlook 2021 Report<\/span><\/b>, India\u2019s energy system is highly dependent on fossil fuels i.e., coal, oil and bioenergy. Thus, Indian energy ecosystem is highly carbon-intensive.<\/span>\u00a0<\/span><\/p>\n India is a <\/span>growing economy<\/span><\/b> which would demand more <\/span>energy consumption <\/span><\/b>with time<\/span>.<\/span><\/b> As per the IEA\u2019s World Energy Outlook Report 2017, India will account for nearly one-fourth of the global energy demand by 2040. Therefore,<\/span> India\u2019s economic growth <\/span><\/b>should be <\/span>sustainable<\/span><\/b>. It requires carbon emissions reductions.<\/span>\u00a0<\/span><\/p>\n It is a feature of <\/span>market failure<\/span><\/b>. The <\/span>consumer\u2019s economic activities <\/span><\/b>like driving or air-conditioning and the<\/span> producer\u2019s economic activities<\/span><\/b> such as electricity generation and manufacturing are <\/span>inefficient <\/span><\/b>in nature. <\/span><\/p>\n They cause emissions, leading to pollution and global warming. These <\/span>negative externalities <\/span><\/b>are not reflected in the costs of production and consumption. This leads to an uncontrolled rise in emissions<\/strong> and also breeds apathy towards mitigation efforts.\u00a0<\/span>\u00a0<\/span><\/p>\n There is a need to address the problem of market failure. Government intervention is required in a number of ways.\u00a0<\/span>\u00a0<\/span><\/p>\n (A) The government can adopt the <\/span>command-and-control<\/span><\/b> strategy. This involves regulations for reducing emissions like setting emission levels and f<\/span>ixing limits of emissions<\/span><\/b>. However, it would be good only during the initial phase of the mitigation strategy.<\/span>\u00a0<\/span><\/p>\n Further, the <\/span>Nationally Determined Contribution targets<\/span><\/b> or emission levels set by the country under the <\/span>Paris Agreement<\/span><\/b> should not be wrongly set. It could lead to <\/span>cost-inefficient outcomes<\/span><\/b>.\u00a0<\/span>\u00a0<\/span><\/p>\n (B) The <\/span>carbon tax <\/span><\/b>is a better option. I would work well for regulating the <\/span>pre-fixed levels of emissions.<\/span><\/b> This option will lead to <\/span>near-efficient outcomes. Initially, <\/span><\/b>the firms reduces the emissions, the marginal cost of abatement rises. However, the firm will stop reducing emissions and choose to pay tax at the point when the cost of abatement becomes higher than the rate of tax.\u00a0<\/span>\u00a0<\/span><\/p>\n The government can<\/span> introduce <\/span>an auction-based carbon trading scheme<\/span><\/b>. It will spur higher efficiency. The price of certificates will be determined in the free market between the firms facing low and high abatement costs. It will determine the <\/span>optimal<\/span><\/b> and <\/span>cost-efficient levels<\/span><\/b> of emissions reduction. The firms will have choice to either mitigate or trade. The firms having low abatement-cost will keep reducing emissions as they would profit by trading the certificates. They will adopt <\/span>green-tech, renewable energy, electrification <\/span><\/b>and <\/span>energy efficiency measures.<\/span><\/b>\u00a0<\/span><\/p>\n India should adopt an <\/span>effective policy framework for emissions reduction<\/span><\/b>. It should take into account the reasons for market failure.\u00a0<\/span>\u00a0<\/span><\/p>\n The <\/span>market-based instruments <\/span><\/b>are the most efficient tools for the transition to a green energy economy.\u00a0<\/span>\u00a0<\/span><\/p>\n The government should ensure equity in energy access. It should channel the revenues generated from <\/span>carbon pricing<\/span><\/b> to households and firms impacted by the <\/span>carbon trading<\/span><\/b> and <\/span>carbon tax<\/span><\/b>.<\/span>\u00a0<\/span><\/p>\n Source<\/span><\/b>: The post is based on an article \u201cIndia must use markets to decarbonise\u201d published in the Indian Express on 02<\/span>nd<\/span> May 2022.<\/span>\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":" News: Recently, in the Conference of Parties (CoP-26) of the UNFCCC held at Glasgow in November 2021 several partner countries were seen committed to concrete action plans to contain global warming under the threshold of 1.5 degrees Celsius.\u202f\u00a0 Why should India decarbonize?\u00a0 Climate change is bound to impact human lives and the global economy. This… Continue reading India must use markets to decarbonise\u00a0<\/span><\/a><\/p>\n","protected":false},"author":10328,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[216,10500],"class_list":["post-182360","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-gs-paper-3","tag-indian-express","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":1700805663,"cached_date":1704763759},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/182360","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10328"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=182360"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/182360\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=182360"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=182360"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=182360"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Why should India decarbonize?<\/span><\/b>\u00a0<\/span><\/h5>\n
What are the reasons behind high Greenhouse Gases (GHG) emissions and the climate change?<\/span><\/b>\u00a0<\/span><\/h5>\n
Way Forward<\/span><\/b>\u00a0<\/span><\/h5>\n