Economic Survey 2018 - Vol. 2, Ch. 5: Sustainable Development, Energy and Climate Change (Download PDF)


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Sustainable development goals -UN Sustainable Development Goals (SDGs) adopted by the international community in September, 2015 comprehensively covers social, economic and environmental dimensions and build on the Millennium Development Goals (MDGs).

  • The SDGs constitute a universal agreement to end poverty in all its forms and dimensions, including extreme poverty. There are 17 SDGs which have 169 targets to be achieved by 2030.
  • Example in SDG agenda is the Pradhan Mantri Jan Dhan Yojana (PMJDY) which is the world’s largest financial inclusion program.
  • While targeting economic growth, infrastructure development and industrialization, the country’s fight against poverty has become fundamentally focused on social inclusion and empowerment of the poor.
  • Reinforcing India’s commitment to the national development agenda and SDGs, the country’s Parliament has organized several forums to develop policy and perspectives on elimination of poverty, promoting gender equality and addressing climate change.

National SDG Indicators and Baseline

  • 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 & Program 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 2016.
  • National Institution for Transforming India (NITI) Aayog’s role will be to collect, validate and document best practices in implementation of SDGs for wider dissemination. On a regular basis, progress on SDGs will be tracked through an integrated dashboard.

📝 Urban India and Sustainable Development

  • SDG 11 states: “make cities inclusive, safe, resilient and sustainable”. India is now embarking on a fast rural to urban transition.
  • One of the defining parameters for delivering India’s sustainable development agenda will be the development path chosen by urban India.
  • 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.
  • 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.
  • India’s urban population is projected to grow to about 600 million by 2031.
  • Many Indian cities are now struggling with multiple problems of poverty, inadequate provision of urban services, congestion, air pollution, sizeable slum population, lack of safety measures, and challenges in terms of garbage removal, sewage system, sanitation, affordable housing, and public transport.
  • Government of India has undertaken several measures to improve sustainability of cities, which include Smart Cities Mission, National Urban Housing & Habitat Policy (2007), Swachh Bharat Mission (Urban) & management of Municipal Solid Waste (MSW) etc.
  • According to the High Powered Expert Committee appointed by the Ministry of Housing and Urban Affairs, about Rs. 39 lakh crore (at 2009 - 10 prices) was required for creation of urban infrastructure over the next 20 years.
  • Rs. 17 lakh crore (44%) was needed for roads and Rs. 8 lakh crore (20%) for services such as water supply, sewerage, solid waste management and storm water drains.
  • The requirement for operation and maintenance was separately estimated to be 20 lakh crore. Raising resources of this magnitude is going to be a daunting challenge.
  • Besides the average cost recovery is less than 50 % 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
  • In July, 2015, the Securities and Exchange Board of India (SEBI) notified a new regulatory framework – for issuing municipal bonds in India. The new regulations allowed for municipal bodies or a corporate municipal entity to issue municipal bonds through private placement or public 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.

Access to Sustainable Energy

  • Access to affordable, reliable, sustainable and modern energy is the sine qua non of achieving all the SDGs due to its deep inter-linkages with all the other goals. Its importance in achieving economic prosperity is straightforward.
  • Access to sustainable energy is directly and indirectly linked to other sustainable development objectives such as good health and well-being, gender equality, industry, innovation and infrastructure, sustainable cities and communities.
  • Over the years the country has made considerable progress in providing access to households to clean cooking options, the proportion of population without access to clean cooking was around 64%. More details can be observed from the graph given
Image proportion of population without access to clean cooking

Image Proportion of Population Without Access to Clean Cooking

Image proportion of population without access to clean cooking

  • The adverse impacts of indoor air pollution also fall disproportionately on women and children who are directly involved in cooking or spend a major portion of their time indoors. Using inefficient fuels like firewood and dung cakes cause health hazards, they require a considerable amount of time to be devoted for their collection.
  • 📝 One of the estimates of the amount of time spent on collecting firewood in India suggests that on an average, women spend around 374 hours every year for collection of firewood (Global Alliance for Clean Cookstoves, 2014).
  • Access to modern energy sources can reduce the amount of time spent on collection of firewood thereby leading to a positive impact on girls’ education and employment.
  • According to Lawson (2008), reduction in gender gap in India by half over the period 2008 - 2017 and then by half again over 2018 - 2027 would result in a per capita income that would be higher by around 13 % in the year 2030, compared to a baseline scenario.
  • Government of India had launched “Pradhan Mantri Ujjwala Yojana” (PMUY) in May, 2016 and upgraded it to provide 80 million LPG connections by 2020 to BPL households.
  • Complementing the above scheme, Government has come out with other initiatives namely “Ujjwala Plus” which will address the cooking needs of deprived people who are not covered under the Socio-Economic Caste Census (SECC) 2011.
  • The Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY) scheme was launched to achieve 100 % village electrification and Saubhagya scheme launched on 25th September, 2017, to provide energy access to all by last mile connectivity and electricity connections to all remaining unelectrified households in rural and urban areas to achieve universal household electrification in the country.
  • The details about percentage of electrification done can be seen in the graph below
Map of percentage of rural households electrified

Map of Percentage of Rural Households Electrified

Map of percentage of rural households electrified

  • Not only has the government focused on providing reliable electricity to the common man but also strived to ensure that the additions are from sustainable sources. The graph given below shows the increase in sustainable energy by the government.
Image of increase in sustainable energy by the government

Image of Increase in Sustainable Energy by the Government

Image of increase in sustainable energy by the government

  • As a move in the direction of efficient energy use, the Ministry of Finance has issued guidelines for mandatory installation of energy efficient appliances in all Central Government buildings across India.
  • 📝 Buildings Energy Efficiency Program 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.

International Solar Alliance (ISA) Entered into Force

  • 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) . 46 countries have signed and out of these, 19 countries have ratified the ISA Framework Agreement.
  • ISA is a coalition of solar resource rich countries lying fully or partially between the Tropics of Cancer and Capricorn and aims to specifically address energy needs by harnessing solar energy.
  • Government of India has made a provision of Rs. 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.
  • Government of France through the Agence Francaise de Developpement, has also offered €300 million for solar projects across ISA member countries. ISA will similarly persuade other countries to contribute to the cause of solar deployment globally.
  • 📝 Presently ISA has three programs Scaling Solar Applications for Agricultural Use, Affordable Finance at Scale and Scaling Solar Mini-grids. In addition, ISA plans to launch two more programs on Scaling Solar Rooftops, and Scaling E-Mobility & Storage.
  • Strategic and financial partnerships have been entered into with the UNDP, the World Bank, EIB, EBRD and the Climate Parliament to further the mandate of ISA. The United Nations including its organs are ISA’s strategic partners.
  • ISA is also developing “Common Risk Mitigating Mechanism” (CRMM) for de-risking and reducing the financial cost of solar projects. An international expert group has been working on the blue print of the mechanism
  • Another major initiative of ISA includes establishment of Digital Infopedia which serves as a platform to interact, connect, communicate and collaborate with one another. ISA also plans to administer global awards for solar R&D, applications and innovative financing.
  • The ISA’s journey can be described by the following figure
Image of ISA’s journey

Image of ISA’s Journey

Image of ISA’s journey

  • 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.
  • ISA is a trillion-dollar opportunity in solar. Economy and industry in turn can benefit from the business opportunities available across 121 ISA member countries.

India and Climate Change

  • India’s climate ranges from continental to coastal, from extremes of heat to extremes of cold, from extreme aridity and negligible rainfall to excessive humidity and torrential rainfall.
  • The rainfall in India shows great variation, unequal seasonal and geographical distribution and frequent departures from the normal. Temperature variations are also notable in the Indian sub-continent.
  • The annual mean, maximum and minimum temperatures during the period 1901 - 2010 for India, show a significant increasing trend of 0.60°C, 1.0°C and 0.18°C per hundred years, respectively.
  • For the 1981 - 2010 period, the mean, maximum and minimum temperatures increased almost at an equal rate of around 0.2°C per decade, which is much higher than the trends for the period 1901 - 2010.
  • Daily rainfall observations during the period 1901 - 2004 indicate that the frequency of extreme rainfall events (rain rate > 100 mm/day) has a significant positive trend of 6 % per decade.
  • India has always engaged constructively at the multilateral level under UNFCCC and India is now actively engaged in the efforts towards developing guidelines for effective implementation of the Paris Agreement on climate change.
  • India has launched various policies and set up institutional mechanisms to advance its actions. Government of India is implementing the National Action Plan on Climate Change, which includes eight national missions covering solar, energy efficiency, agriculture, water, sustainable habitat, forestry, Himalayan ecosystem and knowledge, apart from various other initiatives.

📝 Key initiatives and progress in various areas include:

  • 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 Program, 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. 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.

  • 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 utilization 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 % to 40 % in 2017 - 18 and 50 % 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.

Current Multilateral Negotiations on Climate Change

  • The multilateral climate change negotiations are primarily focused on framing the rules and regulations for implementing the Paris Agreement.
  • The task of finalizing the rules for implementing the Paris Agreement began in Marrakech, Morocco in 2016 (COP 22). Parties agreed that they would complete and finalize the rulebook by December, 2018 (COP 24)
  • Key takeaways for India from COP 23 have been that the agenda of pre-2020 climate change commitments
  • India has been able to preserve differentiation in informal notes/texts on various elements of Paris Agreement work program including nationally determined contributions, adaptation communication, transparency framework, global stocktake, compliance, technology framework, finance and capacity building prepared for further work on rules, modalities and guidelines for Paris Agreement.

Way Forward

  • 👌 The Global Climate Risk Index 2018 has put India amongst the six most vulnerable countries in the world.
  • Given that a sizeable population under poverty live in areas prone to climatic shifts and in occupations that are highly climate-sensitive, future climate change could have significant implications for living standards.
  • The effect of climate change will vary significantly depending on the level of exposure and the inherent adaptive capacities of individuals, households, and communities.
  • India’s efforts on sustainable development and climate change have ensured several positive outcomes. There are immense financial requirements to fulfil the commitments.
  • Climate change has been given high importance in policy decisions. 👌 The Fifteenth Finance Commission Terms of Reference outlined climate change as an important aspect for consideration.
  • It is necessary for developed countries to be compliant on their commitments based on historical responsibilities and the principle of equity and common but differentiated responsibilities.
  • Acting upon their fair share of responsibilities by each nation would provide the pathway of low carbon climate resilient development for our Planet.

- Published/Last Modified on: March 28, 2018


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