Chapter-5: Sustainable Development, Energy and Climate Change

What will be the base year for monitoring and reporting system of Sustainable Development goals of India?

• In the light of the global SDG indicators endorsed by the UN Statistical Commission, the draft national SDG indicators are being developed by Ministry of Statistics & Programme Implementation with inputs from Central Ministries and various other stakeholders and are now at an advanced stage of finalization.
• Going forward, a monitoring and reporting system will be set up to regularly take stock of the implementation process and generate credible information and evidence on progress of the SDGs with the base year as

What are the four pillars for achieving the sustainability of cities as per World Economic and Social Survey?

According to World Economic and Social Survey, 2013, achieving the sustainability of cities entails integration of four pillars –

• social development,
• economic development,
• environmental management, and
• Effective urban governance.

What are survey notes on India & Urban population?

• According to Census 2011, 377.1 million Indians comprising 31.16 per cent of the country’s population live in urban areas. India’s urban population is projected to grow to about 600 million by 2031.
• According to the UN World Cities Report 2016, by 2030, India is expected to be home to seven mega-cities with population above 10 million.
• Government of India has undertaken several measures to improve sustainability of cities, which include the Smart Cities Mission, National Urban Housing & Habitat Policy (2007), Swachh Bharat Mission (Urban), and management of Municipal Solid Waste (MSW) etc.

What are survey notes on Municipal Bonds?

• According to the High Powered Expert Committee appointed by the Ministry of Housing and Urban Affairs, about 39 lakh crore (at 2009-10 prices) was required for creation of urban infrastructure over the next 20 years. Out of this, about Rs. 17 lakh crore (44 per cent) was needed for roads and Rs. 8 lakh crore (20 per cent) for services such as water supply, sewerage, solid waste management and storm water drains. In addition, the requirement for operation and maintenance was separately estimated to be Rs. 20 lakh crore. Raising resources of this magnitude is going to be a daunting challenge. Besides the average cost recovery is less than 50 per cent in most of the Urban Local Bodies (ULBs).
• The way forward is to encourage the ULBs to raise resources through various innovative financial instruments such as municipal bonds, PPPs, credit risk guarantees, etc. Example of one such instrument that has been experimented in India worth highlighting is that of municipal bonds. In July, 2015, the Securities and Exchange Board of India (SEBI) notified a new regulatory framework – Issue and Listing of Debt Securities by Municipalities Regulations – for issuing municipal bonds in India.
• The new regulations allowed for municipal bodies or a corporate municipal entity to issue municipal bonds can be one among the options for the massive investment requirement in the urban infrastructure. However, the ULBs and the state governments have to bring operational efficiency and financial viability in urban projects.

What are survey notes on Buildings Energy Efficiency Programme?

• Buildings Energy Efficiency Programme was launched in May, 2017 which is being implemented by Energy Efficiency Services Limited (EESL). Under this scheme, EESL is likely to retrofit about one crore LED lights, 15 lakh energy efficient ceiling fans, and 1.5 lakh energy efficient ACs in more than 10,000 government and private buildings by the year 2020

What are survey notes on ISA Framework Agreement (FA)?

• ISA, which was launched by Narendra Modi, Prime Minister of India and Mr. François Hollande, former President of France on 30th November, 2015 in Paris, entered into force on 6th December, 2017.
• As per Article XIII (1), the ISA Framework Agreement (FA) has entered into force on 6th December, 2017, on the thirtieth day after the date of deposit of the fifteenth instrument of ratification, acceptance or approval. With ISA FA’s entry into force, ISA has become a de jure treaty-based International Intergovernmental Organization.
• ISA is the first International intergovernmental treaty-based organization headquartered in India (Gurugram, Haryana). As on date, 46 countries have signed and out of these, 19 countries have ratified the ISA Framework Agreement.

What is the contribution of India to ISA in terms of finance?

• Government of India has made a provision of 100 crore as one-time fund for ISA Fund corpus. In addition, a recurring expenditure grant of Rs. 15 crore per annum for the period 2016-17 to 2020-21 has also been committed by India for meeting ISA’s day to day expenditure and meeting cost of outreach events etc. On the request of the ISA, the Government of India has earmarked around US $ 2 billion Line of Credit (LoC) to the African countries for implementation of solar and related projects out of its total US $ 10 billion LoC under the Indian Development and Economic Assistance Scheme.

Currently what are the programs are implementing by ISA?

• Presently ISA has three programmes Scaling Solar Applications for Agricultural Use, Affordable Finance at Scale and Scaling Solar Mini-grids. In addition, ISA plans to launch two more programmes on Scaling Solar Rooftops, and Scaling E-Mobility & Storage.
• ISA is also developing “Common Risk Mitigating Mechanism” (CRMM) for de-risking and reducing the financial cost of solar projects.

What is Kalpana Chawla Solar Award?

• Government of Haryana has agreed to institute Kalpana Chawla Solar Award for the women Solar Scientists doing extraordinary work across the 121 ISA prospective member countries. The Haryana Government has been a trendsetter in this regard and has granted 10 crore to institute the award.

What are the key initiatives taken by government of India to tackle climate change?

• As part of the mission on strategic knowledge on climate change, India has established 8 Global Technology Watch Groups in the areas of Renewable Energy Technology, Advance Coal Technology, Enhanced Energy Efficiency, Green Forest, Sustainable Habitat, Water, Sustainable Agriculture and Manufacturing.
• The broad policy initiatives of the central government are supplemented by actions at the sub-national levels. 32 States and Union Territories have put in place the State Action Plans on Climate Change attempting to mainstream climate change concerns in their planning process.
• Climate Change Action Programme, launched in 2014 with an objective of building and supporting capacity at central & state levels, strengthening scientific & analytical capacity for climate change assessment, establishing appropriate institutional framework and implementing climate related actions has been extended for the period 2017-18 to 2019-20 with a budget outlay of 132.4 crore.
• National Adaptation Fund on Climate Change established in 2015 to support concrete adaptation activities which are not covered under on-going activities through the schemes of State and Central Government, continues till 31st March 2020 with financial implication of 364 crore.
• India is one of the few countries where, despite ongoing development, forest and tree cover has increased transforming country’s forests into a net sink owing to national policies aimed at conservation and sustainable management of forests. India’s growth in the forest cover has been in the positive territory while that for Indonesia and Brazil, which are countries with substantial forest cover, the growth has been in the negative territory during the same period
• Pradhan Mantri Krishi Sinchayee Yojana has been formulated with the vision of extending the coverage of irrigation and improving water use efficiency.
• Second Phase of Science Express Climate Action Special train with the aim to create awareness among various sections of society, especially students, on the science of climate change, the observed and anticipated impacts, and different possible responses as to how climate change can be combated.
• Zero Effect, Zero Defect is a policy initiative to enhance energy efficiency and resources efficiency in Medium & Small Industries.
• The National Mission for Clean Ganga seeks to rejuvenate the river along its length of more than 2,500 km
• Indian financial market also moved in the direction of greener actions. SEBI issued the circular on the disclosure requirements for Issuance and Listing of Green Debt Securities on 30th May, 2017. The utilisation of the proceeds shall be verified by the report of an external auditor, to verify the internal tracking method and the allocation of funds towards the project(s) and/or asset(s), from the proceeds of Green Debt Securities.
• In the Union Budget 2017, government indicated to increase the coverage under the Pradhan Mantri Fasal Bima Yojana(PMFBY) from 30 per cent to 40 per cent in 2017-18 and 50 per cent in 2018-19.
• In February, 2017, India launched the world’s first interoperable Quick Response (QR) code acceptance solution. It is a sticker pasted on the teller counter wall of the merchant and can be generated dynamically on merchant itself, removing the need to even print. By providing the Bharat QR option, India is taking the right step in the direction of greener and sustainable future.

India & Global Climate Risk Index

The Global Climate Risk Index 2018 has put India amongst the six most vulnerable countries in the world.

What are survey notes on discussions around Renegotiation of PPAs by certain states?

• PPA is a contract between purchaser of electricity and electricity generator setting out the terms and price for supplying electricity. Earlier, tariffs were fixed by state electricity regulatory commissions based on which PPAs were made with power generators. In the case of renewable energy, state electricity regulatory commissions set the Feed-in Tariffs for the purchase of electricity from these sources. PPAs were signed based on these pre-determined prices for a number of years. One of the key objectives of the Electricity Act, 2003 is promotion of competition in the electricity sector. Section 63 of the Act specifies that notwithstanding anything contained in section 62, the Appropriate Commission shall adopt the tariff if such tariff has been determined through transparent process of bidding in accordance with the guidelines issued by the Central Government. A tariff order shall, unless amended or revoked, continue to be in force for such period as may be specified in the tariff order. The revised tariff policy was published in January, 2016.
• The recent auctions for solar power procurement have led to discovery of very low tariffs (Figure). Auctions for wind based power were first held by Solar Energy Corporation of India in February, 2017 which realised a tariff of 3.46/unit. This is much lower than the lowest feed-in tariff for wind at Rs. 4.16/unit. Second wind auctions were conducted in October, 2017 where the tariffs again touched a historic low level of Rs. 2.64/KWh. The discovery of very low tariffs through the auctioning process, though a welcome news, possibly contributed to some demands for renegotiation of the already signed PPAs. Some discoms have hinted at the possibility of renegotiating the PPAs signed by them at tariffs higher than those in the recent bids. According to CRISIL (2017), renegotiating the tariffs could result in risk for investments worth Rs. 48000 crore.
• Renegotiation of PPAs are likely to face tough resistance from the developers and may result in legal battles. This introduces uncertainty for the sector and banks which are already facing the issue of NPAs, may become apprehensive of lending to the sector in the future. There are cases where the developers have already made huge investments into renewable energy projects based on the expected stream of revenue. One of the principal expectation from the Government is the enforcement of PPAs. This is especially crucial considering the government’s ambitious target of achieving 175 GW of renewable energy by 2022.
• Making the term of future PPAs shorter may not be desirable as it could only increase the cost of capital without much gains. Affordable financing holds the key for financing sustainable energy projects. Risk mitigating instruments such as payment guarantee fund or a foreign exchange fund available to developers could be a way forward.
• The Government, so far, has played an active role in promoting the adoption of renewable energy resources by offering various incentives, such as generation-based incentives, capital and interest subsidies, VGF, and concessional finance. Renewable energy has been placed under the priority sector lending and the bank loan for solar roof-top systems is to be treated as a part of home loan/home improvement loan with subsequent tax benefits. Currently, the levelised tariff is approaching grid parity. There is a case for revisiting the subsidies and incentives being given to the renewable energy sector.