After the recent Cancun Summit became just one more wasted effort to resolve the North-South conflict in moving towards a less polluting world, experts believe the solution may lie in multi-lateral agreements, or, as Shailesh Haribhakti, a clean energy expert and Chairman, BDO India, proposes in an interview with Shashidhar Nanjundaiah, international sovereign fund to invest jointly towards a solution that can result in lower costs of energy and therefore, with better chances of compliance.
What should we, and especially our industries, do domestically and independent of any protocols, to move towards cleaner energy solutions?I don’t see this country doing anything purely voluntarily. The government is doing a lot, but in order to pool in industries, power users and vehicle users, we need a mandate. But this is also a worldwide problem. Although the biggest thrust in this area should be given by the USA and Europe, who have the biggest inventory of pollution creators, we can’t wait for them to take a lead. We need action on the ground right now domestically, especially in three thrust areas:
• Rain water harvesting, garbage separation and vermi culture• CNG, zero-pollution cars such as those driven by electricity• Move out of fossil fuel dependency by changing our energy mix
We should track and get granular about the costs of the various kinds of energy that can go into a renewable energy mix. We need policy orientation and an environment where people feel that the cost of compliance will be greatly worth their while.
In general, the industry is doing its bit in terms of changing its power mix in response to a renewable energy (RE) mandate. Once RE becomes a cost-effective option, there will be plenty of voluntary action. The Indian Electricity Act is going to mandate in each state 4-10 per cent, depending on the states.
In the three thrust areas that you have mentioned, do you have some kind of quantification that you would like to project? How much percentage we should start with?I have been putting across the idea of multi-sovereign funds to invest in clean energy. Such a fund would facilitate cooperation among a number of entities that have capital to put to work. It would develop a shared international understanding of priorities in responding to the energy and climate change. The countries that would need to be in the leadership of such an enterprise would be Norway, Singapore, Japan, UAE, Qatar, Saudi Arabia, Kuwait, EU, the United States and Canada. However, India, China, Brazil and other emerging economies with significant foreign exchange reserves would also need to subscribe.
The fund would need to focus on the four sectors that cause 75 per cent of all greenhouse gas emissions in the world:
• Energy• Deforestation• Industry• Transport
The fund would invest in breakthrough technologies in companies that are willing to commit their own equity to R&D. So if the world can’t agree on how much you need to reduce, at least they can agree on how much to contribute to a fund whose dedicated purpose would be to renewables, to bring in cars which will be zero polluting.
How do you think our government should facilitate such investments?By policy orientation, by making sure that the investment will yield return. The power purchase agreement (PPA) policy should ensure that it is delivered efficiently; if costs are kept under control then there will be a return. By implementing legal and regulatory force to ensure that happens.
Jairam Ramesh said that we may not have been a part of the problem, but we need to be a part of the solution. What do you think?I think we have a thinking government, a good minister, good world public opinion building, and we have a dedicated minister in Jairam Ramesh, at least so far.
Recently, I met Prof Keller, a Swiss professor who has created a convection system of temperature control in Switzerland. They have fitted air tubes on roofs of every structure and have equally air tubes under the floor.
China has put up 64,000 MW of renewable energy last year. Out of the world’s total incremental renewable power, China had a massive 60-plus percent market share. Apart from moving towards cleaner lighting and fuel systems, a big thrust is to gradually move to nuclear power generation—which is inevitable to reach the quantum of power we need—plus wind, solar, etc. Of course, they can just do it by dictat. There is a differential cost and the government eats it up.
But don’t we also need to move from subsidy driven society to viability driven society?In order to accomplish a change to renewables, an escalation in subsidy is inevitable and desirable. If cannot have Renewable Energy Credits (RECs) because we have knocked off what we have put together to put carbon credits into existence, we need to have a carbon tax. India needs a carbon tax for all tax payers: this tax will force the energy mix to change to renewables.