As India’s energy ecosystem is highly carbon intensive, a carbon-trading scheme enables the economy’s green transition. Explain (200 Words)
Refer - The Indian Express
Enrich the answer from other sources, if the question demands.
IAS Parliament 2 years
KEY POINTS
· Climate change is bound to impact human lives and the global economy at an exceptionally high scale in the not-so-distant future.
· The last Conference of Parties (CoP-26) of the UNFCCC held at Glasgow in November 2021 witnessed considerable inertia from several partner countries in committing to concrete action plans to contain global warming under the threshold of 1.5 degrees Celsius.
· As per the IEA’s India Energy Outlook 2021 Report, India’s energy system is highly dependent on fossil fuels coal, oil and bioenergy that supply about 90 per cent of the country’s demand.
· Power generation is highly dependent on coal about 78 per cent of it comes from this fossil fuel and, transportation is almost entirely dependent on oil. The Indian energy ecosystem is, thus, highly carbon-intensive.
· This leads to an uncontrolled rise in emissions and also breeds apathy towards mitigation efforts. The solution to the problem of market failure calls for government intervention.
· However, the possibility of the tax being either too high or too low cannot be ruled out. This problem can be addressed by introducing an auction-based carbon trading scheme.
· The issue of equity in energy access must be addressed by channelling the revenues generated from carbon pricing to households and firms impacted by the carbon trading and carbon tax these could be through incentives or lump-sum transfers.
