Blanket Safeguard Duty: If Implemented It Can Have Disastrous Effects on Indian Solar Industry

Director General of Trade Remedies (DGTR) initiated Safeguard Duty investigation on import of  Solar Cells, whether or not assembled in panels or modules in December 2017. The Director General of Trade Remedies in its preliminary findings recommended to impose 70% safeguard duty on imported solar cell and modules imported in India. Recently Committee of Secretaries decided to not impose Safeguard Duty based on preliminary findings and it decided to take call on duty once DGTR releases it’s final findings.  However, we should evaluate the scenario that will unfold if the duty is imposed.

 

Safeguard Duty: A Boon or Roadblock?

Indian solar industry is growing and the consistent progress portrays the Government initiatives in a bright light. However, the industry is still at a nascent age and requires constant support in development of a favourable environment for growth. And although, protecting domestic manufacturing industry seems to be the right move (Domestic players had a market share of 13 per cent in FY15, which is estimated to decline to 7 per cent in FY18), we have to understand that blanket Safeguard duty could lead to counterproductive results.

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Innovation Is the Only Way to Boost Solar Revolution

A few years ago, Solar was considered experimental and was a niche industry in the huge sector of energy generation. It is important to note that in 1977, solar panels cost $77 per watt p. However, currently solar modules cost between $0.33-$0.36 cents/per Watt p, which identifies more than 99% fall in prices. Also In 2015, power generation from renewable sources (1,985 GW) surpassed coal based energy generation (1,951 GW). And today, Solar PV panels have garnered a huge demand, resulting in global capacity additions nearly reaching 100 GW in 2017 alone. Countries, developing and developed alike are investing more in renewable energy ($286 billion in 2016) than conventional fossil fuel ($130 billion in 2016). New technologies that support renewable energy adoption like- Battery storage systems are also getting cheaper, paving a path for renewable energy (mainly solar) to become mainstream energy source.

Although the world has accepted solar and are working towards solarisation in an collaborative effort, it is important to note that solar only generates 2% of global electricity. Which is not very impressive if solar is to replace fossil fuels quickly. Mass adoption of green energy is the only way to save our future and climate, both of which are rapidly degrading, due to continuous use of depleting reserves of fossil fuels.

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The unutilised state of National Clean Energy Fund

The formation of NCEF or National Clean Energy Fund was indeed the right step towards supporting India’s green energy initiatives. The idea was introduced by the Government of India in 2010-11. And upon receiving huge support, it quickly became India’s carbon tax, on coal to generate fund for research and financing clean energy technology. Currently, the name of NCEF has been changed to National Clean Energy and Environment Fund (NCEEF) to support initiatives for clean environment development.

It should be noted that at the beginning, tax imposed on coal on behalf of NCEF was INR 50 per tonne, which eventually ascended to INR 400 per tonne in 2016-17. It is fairly easy to glean from the context that NCEF could have been identified as a very able supporting column for nascent green energy infrastructure of India.

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Scenario, Comparison and Prospect of Electric Vehicle Market in India

Daily global CO2 emission level currently stands at 406.47 ppm (parts per million globally). Taking the hints from deteriorating environment, and identifying fossil fuel generation and consumption to be the primary reason for CO2 increase, the world is quickly adopting green energy. Since, global transport system plays a major role in adding to the CO2 levels, it is very important to bring the green energy utilization in transport systems as soon as possible. Since Solar energy has gained world wide acceptance due to its feasibility, easy to install, and reliability, solar energy growth and EV growth have become interconnected.

EV and Solar Energy Growth are Interconnected

Since India has made huge strides in renewable industry development, the country is considered to be an ideal platform for Electric Vehicle (EV) market growth. It is important to highlight that, 10 cities from top 20 most polluted cities in the world are in India, and a third of PM (particulate matter) pollution in India is from transportation sources. Additionally, in 2015-16 India’s crude oil imports are more than 80% amounting to $81.5 billion, and transport sector is the biggest consumer of crude oil with usage of 70% of diesel and 99.6% of petrol. Therefore, focusing on EV market growth depending on renewable energy (especially solar) would help India save billions of forex outflow, and reduce dependency in fossil fuels. 

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Resource Efficiency Policies and Initiatives Can Ensure Sustainability for India

Continuously depleting natural resources pose a great threat to the world as its population continues to rise. Starvation, lack of energy, and important requirements to sustain life throughout the world has made it obvious that current consumption and production patterns are unsustainable. Focus on manufacturing and management of resources is extremely important to maintain life on Earth; otherwise the threat surrounding us would lead to further inequities. Management of lifecycle of resources, from their extraction to consumption and eventually disposal of waste has to be efficient to create and maintain sustainability of life as we know it.

Although, worldwide changes are being seen that surface necessities and align with the requirements of sustainability, not always they lead to expected results. And since managing resources is a global commitment- countries failing to create, establish and follow the process result in limiting global environment improvement. The only way to remedy the situation is cross country collaboration and development of understanding between policy and businesses within a country.

How Can Resource Efficiency Help?

Developing policies and business practices to have minimal impact on environment can also lead to adoption of resource efficient practices that can help in integrating circular economy methods. Reuse of waste would gain efficiency and responsible management system would allow countries to save millions and billions by reducing expenses and import requirement.

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Government of India’s step towards solarizing the country is indeed an inspiring and decisive step to revolutionize energy generation and usage. The country has also announced plans of embedding resource efficiency and circular economy in initiatives and polices such as- Smart Cities, Swach Bharat, Zero Effect-Zero Defect Scheme, Ganga Rejuvenation Mission, Make in India etc, which will save resources and expenses.

How Is India Working Towards Resource Management?

NITI Aayog has joined hands with European Union delegation and released strategy on resource efficiency, which is supposed to help develop circular economy that will translate into sustainable development of the country. The strategy showcases action plans involving-

  • Manufacturing capacity development
  • Institutional development
  • Sharing of best practices
  • Development of an indicator monitoring framework
  • R&D and Technology Development
  • Waste-exchange platform

These processes will support sustainable public procurement, development of industrial clusters, and information sharing & awareness generation, saving money and leading to a better developed country.

However, to operationalize strategies for resource efficiency, India needs to create and follow sectoral policies in investment, education, innovation, trade, and skills development that can support resource efficiency development.

Why Policies Are Needed?

Policies are needed to facilitate the resource efficiency processes within the management supply chain of businesses. Strategies cannot deliver result unless businesses develop resource management processes within their existing framework. In order to do that, businesses often need financial support to accept and adopt large scale efforts towards waste management and efficient resource handling. Lack of technological infrastructure also hinders businesses in following the strategies prescribed the Government. In such cases, policies facilitating support can help. It is also important to improve the economic analysis of efficient resource management.

The Way Forward

Evolving consumerism has urged rapid changes in product and service generation. India has done a marvellous job in energy generation and management by selecting solar. However, rethinking the resource management processes and effectively incorporating processes that will focus on resource usage, increasing exports, and reducing forex outflow is needed.

 

http://wsds.teriin.org/imperatives-operationalizing-resource-efficiency.php

 

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