Prescribing emission standards or technology norms may provide certainty but they “often impose high compliance costs and weak incentives for innovations,” the survey said.

Though several countries have initiated carbon tax, in India there is no uniform nationwide pollution tax.

A host of countries inclduing Argentina, Canada, China, South Africa, Japan among others impose such a tax to protect the environment.

India, which is yet to reach its peak energy demand, needs to come up with effective policy measures that expand affordable energy will be key.

Net Zero Carbon Emissions

India is committed to touching net zero carbon emissions by 2070 and aims for a 45% reduction in emissions intensity by 2030. According to the Centre of Social and Economic Progress (CESP), India would need effective and well-carved-out policies, including the introduction of carbon pricing mechanisms to encourage businesses and households to reduce their emissions. 

Notably, under the free trade agreement just signed between India and the European Union, carbon tax will be applicable to a few Indian goods such as steel, aluminium, and cement, that typically generate higher pollution during manufacturing.

Carbon tax is levied based on per tonne of carbon dioxide equivalent (CO₂e) emissions.

The Survey underlined that challenges related to climate goals are not “ideological”, but are linked to infrastructure and the need of the hour is to carve out regulatory predictability, along with administrative capacity and the adoption of technology.

It added that though the government has taken several steps to improve environmental governance, “critical challenges remain.” These include multiplicity of clearances, overlapping jurisdictions, and weak post-clearance monitoring among others.

At the recently-concluded World Economic Forum former IMF economist Gita Gopinath said that air pollution posed a bigger challenge to India than tariffs.

Pollution Control

The survey noted that the southern states have taken the lead in taking effective action in controlling pollution with effective decarbonisation plans.

The Tamil Nadu Pollution Control Board, for example, has been regularly monitoring industrial effluent treatment systems along with supporting the establishment of Common Effluent Treatment Plants for clusters of small-scale and pollution-intensive industries, such as tanneries and textile units, to ensure treated wastewater meets prescribed environmental standards before discharge.

The official report card of the government said that “renewable capacity has expanded faster than balancing systems, transmission reinforcement and storage technologies.”

In the forthcoming Union Budget, Finance Minister Nirmala Sitharaman is expected to announce steps that will help in pollution control. Sources said that Sitharaman could come up with “bold steps” in a bid to address this issue.

India’s air pollution levels are among the highest in the world. The problem, if not adequately addressed now, could become a serious threat to investment, growth and overall development.