In the midst of arguably the most monumental crisis facing India considering the fact that Independence, I hesitated to create this month’s report. It did not really feel right—in truth, it seemed inconsequential—to create on a topic other than this human tragedy. I decided in the finish to meet my commitment by writing about the other topic which, if not today but in years to come, might properly be comparably consequential. Climate alter. The peg on which I hang this report is a basic finding out from the pandemic. Broad brush assurances and claims are no substitute for a meticulously structured road map.
Policy wonks, climate negotiators, academicians, corporates and NGOs are at the moment fixated on the notion of “net zero carbon emissions” and the acceptable target year for reaching it. Supported by financial evaluation and moral logic, and drawing on the notion of “common but differentiated responsibility”, their arguments swirl about its which means and irrespective of whether the date ought to be 2050, 2060, sooner, or not at all. I am personally supportive of the nature and path of this debate. The world does have to have a properly-defined, time-bound objective. “Net Zero” provides everybody a tangible metric against which to measure progress. My concern is that in the work to safe a worldwide consensus about this target, the discussants are loosing sight of the instant. They are not spending adequate time and work to lay out the stepping stones. They are forgetting the tips provided by parents to children impatient to make the Great Leap Forward. One step at a time, but most effective take a brief very first step in the suitable path than strive for a longer but unsteady stride.
It is against this backdrop that I want to introduce a book that has just hit the bookstores: The Next Stop: Natural Gas, India’s Journey Towards a Clean Energy Future. I was initially hesitant to introduce this book to the readers simply because I am the editor. But I decided to do so simply because it is not “my” book. It is that of 25 authors who have every single contributed a chapter. Their message is that rather than concentrate only on the endgame of decarbonisation, India should very first “green” its fossil-fuel power basket. This can be completed by growing the share of organic gas.
This is a feasible prospect simply because this improve will not produce the headwinds that the option of shutting down coal mines may it will not demand industries to invest heavily in retrofitting their systems and it will enable the government to meet its objective of delivering safe and very affordable power to everybody without having degrading the atmosphere. Furthermore, it can be accomplished by means of executive ordinance and without having the have to have for legislative approval. Implicit in their message is India stands a improved likelihood of reaching the location of a predominantly clean program if it moves forward incrementally. That is, if it tends to make organic gas the “next stop” in its power journey.
The broad thrust of this message is fleshed out by means of precise policy ideas cutting across all segments of the organic gas worth chain, from production (domestic and international) to transportation (pipeline and LNG) to markets (existing and emergent) to industrial (pricing, taxation) and regulatory troubles. These ideas are distilled from the answers offered by the authors to the query. What should be completed to improve the share of organic gas?
To illustrate the granularity of the responses, right here are 4 important policy ideas. First, the authorities should prioritise organic gas. They should recognise its versatility. It is a competitive fuel it is abundantly accessible in and inside the Asian/ME subcontinent it has numerous makes use of and it is the “greenest” of all fossil fuels.
Second, the authorities should right the existing disincentivising policy distortions. The pricing of organic gas is, for instance, a potpourri of complexity. There are numerous price tag formulae. One for gas created from domestic fields by the public sector providers one for gas created by private providers one for production from deep waters offshore below higher temperature, and so on. The taxation program is also comparably regressive. It is a cascading structure so that the tax prices improve as the gas flows from one zone to one more. This signifies that consumers situated at a distance from the supply of gas spend a greater price tag than these closer to the supply. The outcome is the dampening of demand. Also, gas is not below GST.
Third, the authorities ought to revamp the structure of the business. Gas Authority of India Ltd (GAIL) is at the moment engaged in production, transportation and marketing and advertising of gas. This permits it to leverage its ownership of the bulk of the gas pipelines to deny its competitors access to the industry. The policy calls for assured and popular access to all marketers, but GAIL can bend the policy to its benefit without having breaching it. Most nations have tackled this conflict of interest circumstance by separating the upstream (production/import) and downstream (marketing and advertising) interests from transportation. GAIL ought to also be so “unbundled”. Its company activities ought to be restricted to pipeline building and transportation.
Finally, (and this is one suggestion that falls outdoors the remit of the executive branch) the institutional mechanism ought to be developed to allow improved coordination amongst the Centre and the state governments. One purpose why India has not however constructed a national pipeline grid is simply because the Centre and states have clashed more than troubles like land acquisition, pipeline routing and royalty payments. Centre-state variations have also delayed the building of import facilities and the creation of gas markets. A way has to be discovered to take these troubles off the political table and brought inside the frame of an integrated choice creating method.
Every participant will come to CoP26 later this year with challenging proof to back their longer term commitments. This will be reassuring. But the tyre will hit the road only when, rather than just hunting across the river at the opposite bank, the participants decrease their heads and concentrate on the stepping stones.
(Writer is Chairman, Centre for Social and Economic Progress (CSEP))