🏭 Govt's Pollution Control proposals
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The cost of two pollution control measures (low emission devices and EV charging infra) are dwarfed by the humongous benefits from implementing them, yet neither the producer nor the customer can afford to do so. Delay in initiating the measures converts potential benefits into a toll on the economy.
Seen in this context, Govt's subsidy of Rs 88,500cr makes a lot of sense. It recognises the economic and social benefits of taking decisive action. And though it feels like a major expenditure for the Govt, there too is payback in terms of lower public health costs and better tax receipts.
Earlier report
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▐ India could save Rs 9.6 lakh crore in health benefits: Health and economic benefits make it worthwhile to install low emission devices on thermal power plants
Low emission devices, at Rs 1 crore per MW can burden the economy by Rs 2.5 lakh cr if done across the board. Realistically, low-cost producers will pass on the costs, but many others will shut down. Govt grant (of say 30% cost) can soften the hefty power tariff hikes (Rs 0.25 to Rs 0.75/ unit) on consumers. Economic and health benefits far outweigh costs, thus making it a fair investment of govt monies. For example, air quality is improved as follows: SOx down 95%, NOx down 87% and PM down 85%!!
Govt proposals
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▐ India proposes $12 billion of pollution-reducing incentives
Govt has proposed a substantial Rs 83,000cr for incentivising low emission devices on power plants, and Rs 5,500cr for developing EV infrastructure in 70 cities in the next 5 years. EV initiative will encourage broader adoption of EVs, thereby reducing pollution and import dependency. Impact of low emission devices is seen thus:
1) Thermal power plants account for 80% of all industrial particulate pollution. Particulate matter and gaseous pollution can be reduced by 85% - 95%. This means just one costly measure can eliminate around 2/3rd of all such particulate pollution.
2) Foul air pollution affects the resident, the next generation, life outcomes and quality of life. Health costs at an estimated 9.6 lakh cr, is four times the costs of fitting low emission devices.
3) Unquantified amount of economic loss is happening to urban areas. A city like Delhi suffers a humongous loss in terms of productivity, business activity and tourism.
4) Govt recognises that the overall cost of Rs 2.5 lakh crore (based on Rs 1cr per MW) will overburden the thermal power sector and if passed on to customers, will lead to hefty tariff hikes of btw Rs 0.25 to Rs 0.75/unit.
5) Weak financials of thermal power producers, including NTPC had forced Govt to extend the December 2017 deadline by 6 years. A collapse of the sector will create financial stress for the public sector banks.
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The cost of two pollution control measures (low emission devices and EV charging infra) are dwarfed by the humongous benefits from implementing them, yet neither the producer nor the customer can afford to do so. Delay in initiating the measures converts potential benefits into a toll on the economy.
Seen in this context, Govt's subsidy of Rs 88,500cr makes a lot of sense. It recognises the economic and social benefits of taking decisive action. And though it feels like a major expenditure for the Govt, there too is payback in terms of lower public health costs and better tax receipts.
Earlier report
▐ India could save Rs 9.6 lakh crore in health benefits: Health and economic benefits make it worthwhile to install low emission devices on thermal power plants
Low emission devices, at Rs 1 crore per MW can burden the economy by Rs 2.5 lakh cr if done across the board. Realistically, low-cost producers will pass on the costs, but many others will shut down. Govt grant (of say 30% cost) can soften the hefty power tariff hikes (Rs 0.25 to Rs 0.75/ unit) on consumers. Economic and health benefits far outweigh costs, thus making it a fair investment of govt monies. For example, air quality is improved as follows: SOx down 95%, NOx down 87% and PM down 85%!!
Govt proposals
▐ India proposes $12 billion of pollution-reducing incentives
Govt has proposed a substantial Rs 83,000cr for incentivising low emission devices on power plants, and Rs 5,500cr for developing EV infrastructure in 70 cities in the next 5 years. EV initiative will encourage broader adoption of EVs, thereby reducing pollution and import dependency. Impact of low emission devices is seen thus:
1) Thermal power plants account for 80% of all industrial particulate pollution. Particulate matter and gaseous pollution can be reduced by 85% - 95%. This means just one costly measure can eliminate around 2/3rd of all such particulate pollution.
2) Foul air pollution affects the resident, the next generation, life outcomes and quality of life. Health costs at an estimated 9.6 lakh cr, is four times the costs of fitting low emission devices.
3) Unquantified amount of economic loss is happening to urban areas. A city like Delhi suffers a humongous loss in terms of productivity, business activity and tourism.
4) Govt recognises that the overall cost of Rs 2.5 lakh crore (based on Rs 1cr per MW) will overburden the thermal power sector and if passed on to customers, will lead to hefty tariff hikes of btw Rs 0.25 to Rs 0.75/unit.
5) Weak financials of thermal power producers, including NTPC had forced Govt to extend the December 2017 deadline by 6 years. A collapse of the sector will create financial stress for the public sector banks.
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- Will govt and/or consumer pay hefty amounts for good air quality?
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The study assumes all TPPs will be modified so the cost will Rs be 2.5 lakh cr (ie Rs 1.0 cr per MW) over 15 years. This is unrealistic and over-inflates the cost.
Pollution control measures by TPPs could mean higher tariffs (+ Rs 0.25 to 0.75/unit). Inevitably consumer can't pay the full cost, so govt will have to fork out say 30% of cost as grants.
Good news is that benefits will be 4 times greater than cost, eg. benefit in lower days off, lower respiratory illnesses, lower deaths of newborns, etc. Net gains also accrue quite quickly.
▬ Cost : Rs 0.5 to 1.0 cr per MW over 15 yrs period.
▬ Pollution benefit : sharp falls in SOx (95% fall), NOx (87%), PM (83%)
▬ Health benefits in total for 15 yrs : 52m fewer hospitalisations, fewer premature births & 126m fewer working days lost.
▬ Economic benefits in total for 15 yrs : unquantified amounts in productivity gains, more business activity and tourism.
REPLY 5w
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