05/11/2022 - Environment

KEY POINTS

·        The government has made climate pledges under the Paris Agreement that includes reducing emissions to GDP ratio (emissions intensity) by 45 per cent by 2030 compared to 2005 levels.

·        The Clean Environment Cess (CEC) was a tax introduced in 2010 as a fiscal tool to reduce the use of coal and associated carbon emissions.

·        Despite these intentions of levying the cess, its design and implementation have been inadequate.

·        Centre for Social and Economic Progress (CSEP) analyses the issues associated with the implementation of the CEC and its usefulness in combating the increasing pollution levels in India.

·        Cess was subsumed into the Goods and Services Tax (GST) compensation cess in 2017, and the revenues, which were originally earmarked for environmental conservation, was instead used for compensating States for their loss of revenues

·        The data on revenue utilisation from this cess indicate that only 18 per cent of the aggregated revenue collected between 2010-11 and 2017-18 was used for its intended purpose.

·        The government must introduce a graded form of an ecological tax that is levied on the value of outputs of sectors such as coal, electricity, fertilisers, iron and steel, non-ferrous basic metals, paper products, and textile industries.

·        Further, this will help broaden the tax base. Various studies indicate that these industries are the most polluting.

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