Recent meetings at Davos and Madrid focused on climate change and raised concerns about inadequate climate action. Basically, we are talking about reducing the use of fossil fuels viz; coal, oil and gas for climate mitigation.
However, considering that the world has done so little so far, there are climate impacts that need to be countered such as disasters, extreme heat and cold, etc. through climate adaptation. This brings us to the question on what can the budget do towards this cause?
India already has climate friendly policies in the power sector which promote renewable energy and energy efficiency. However, much more can be done to increase the pace. For example, what measures can be taken in the transport sector, which is the major user of petroleum products in India?
Here we have triple pressing concerns: large-scale imports of fossil fuels draining our foreign exchange resources; air pollution; and climate change. All the three above concerns can be addressed by promotion of Electric Vehicles (EV) – a remedy to address noise pollution as well.
Unfortunately, the Government program for Faster Adoption and Manufacturing of E-vehicles (FAME), launched to promote EVs,basically depends upon providing subsidies for a few vehicles. It will be difficult and even undesirable to upscale FAME, which relies on subsidies to manufacturers for sold vehicles. In the name of demand mobilization, it does the opposite. It providessubsidies to manufacturers –e.g. INR 1.5 Lakh per car for only 35000 cars .
What manufacturers really need is high demand for EVs to upscale production. On the other hand, this amount of INR 1.5 lakh is a lot for the car purchasers. However, even that would be unworkable for millions of consumers. So how should this be addressed?