Business Today

'We need to move from saying 'no,no' to 'yes, but''

The minister’s office in the Ministry of Environment and Forests has new doors — glass doors. Message: Transparency. The minister, Jairam Ramesh, works on his ultra portable laptop and often prints documents with a printer on his table. Message: Hands-on approach and speed.

Rohit Saran & Puja Mehra | Print Edition: October 18, 2009

The minister’s office in the Ministry of Environment and Forests has new doors — glass doors. Message: Transparency. The minister, Jairam Ramesh, works on his ultra portable laptop and often prints documents with a printer on his table. Message: Hands-on approach and speed.

A series of legislative actions is underway to rid the ministry of its key powers. While the ministry has refused to accept any binding commitments on greenhouse gas reduction globally, it has prepared a six-point agenda for Indian industry. Message: Offensive strategy works well only when you also have a defensive strategy. We caught up with the minister to understand the feasibility and implications of the transformation he is seeking to bring into the ministry. Excerpts of the interview:

The environment ministry has come to be perceived as the biggest bureaucratic hurdle in setting up any industry. Why is this so?
Contrary to the perception, I’ve discovered that the rate of acceptance of proposals for setting up industry is unnaturally high and the rate of rejection unhealthily low. Over 90 per cent of the cases get environment clearance and about 80 per cent in the case of forestry. Actually, I want a higher rate of saying no.

Let me explain. The environment ministry gives two types of clearances for setting up industry— for forests and environment. Under the Environment Protection Act, the Centre has 210 days to take a decision on applications for setting up industries. Under the Forest Conservation Act, it is 150 days. Over 92-93 per cent cases get done within these deadlines. Some high-profile cases, however, get stuck, and influence the popular perception…. The Centre cannot give a forestry clearance unless the state does and that is where mines, etc., are stuck for over three years in Jharkhand, Orissa and other states.

A new autonomous regulator to grant and monitor environment approvals.
Online monitoring of industries by pollution control boards.
A market mechanism to give incentives for energy efficiency.
Companies above the norm can sell their credits to those below the norm.
A limited-period pollution tax to fund effluent treatment.
A Green Tribunal to adjudicate environment cases and settle civil damages.

The great weakness of today’s system is that it favours industry— not the environment. We are not monitoring the compliance of the terms under which we are giving the clearances. But if we do, in most cases, the compliance will be found to be very poor.

So, how do you propose to reform the system?
The original response of the ministry was “No, no”. I want to change it to “Yes, but”. I will give you the clearance, but it will be under a regime, which you will have to follow. The reason environment is becoming a big national issue is because of the courts—whether it was the 7,000 public transport buses going CNG in Delhi or the tanneries moving out of Kolkata. Judicial activism -became a welcome substitute for executive inaction. I’m trying to restore the balance between the roles of judiciary and the executive over environment. We have introduced a Bill in Parliament for setting up the National Green Tribunal, a specialised environmental court for civil damages.

Besides, we’re setting up the National Environment Protection Authority, to which all my licensing powers will go. I’ve written to the chief ministers saying they, too, should transfer their powers of licensing and inspection. Monitoring compliance and regulation should be done by this independent authority.

So, we are planning a new system of environmental governance where the ministry will do the legislation and policy function, an independent authority will do the regulation and licensing function and a specialised environment court will perform the judicial function.

Are your bureaucrats with you on this? How soon can the new system become functional?
They are, because inadequacies have become so prominent. By April-May 2010, I would like to have the Authority.

Between regulation and incentives, which is better?
All over the world, regulation drives environmental behaviour. Detroit’s car industry went for catalytic converters because the EPA (Environment Protection Agency) insisted. So, we’re introducing a market mechanism to incentivise energy efficiency, which will be defined in produce per unit of fuel or raw material used. Companies above a norm will be able to sell energy efficiency credits to those below it. The Bureau of Energy Efficiency has identified the norms and industry. Early next year, this will be realised.

Mandatory Fuel Efficiency Standards by 2011.
Non-hydro renewables to account for 15 per cent of power generation capacity by 2020 and 20 per cent by 2030.
50 per cent of coal-based power to come from supercritical, ultra supercritical and Integrated Gasification Combined Cycle technology by 2020.
Energy intensity, already on par with Germany, to fall by 20 per cent by 2020.
5 per cent of gross cultivated area to come under methane-reducing rice technology by 2020 and 10 per cent by 2030.
15 per cent of annual GHG emissions to be sequestered by forests and trees cover by 2030.

On pollution, the Centre could give incentives to states for river clean-up expenditure. We’ve requested the Thirteenth Finance Commission (TFC) for a grant of Rs 1,300 crore to urban municipal bodies over the next five years for this. Today, in several cities like Kanpur, Varanasi and Allahabad, there are sewage treatment plants lying idle because there are no funds to maintain and repair them. We’ve frittered away a lot of money on a town-based approach to river cleaning. For example, last year, we gave Rs 300 crore to 165 towns. The per town amount was a pittance for the task.

In terms of awareness, willingness and genuine commitment, where does Indian industry stand?
Awareness, I will give them 8 out of 10, willingness 6 out of 10 and genuineness 4 out of 10 barring the usual suspects—the Tatas, etc. In terms of sheer numbers, the small and medium industries are the largest polluters.

So, is there a case for a pollution tax?
I’m a great believer in a pollution tax because pollutants in this country don’t pay. We’re examining it. I want it to be a limited period tax, say, for four years, which can be used to fund effluent treatment plants.

Your ministry has actually the scope to create a new industry…
Of course, green is not just a concern, it is also a huge business opportunity. In the green businesses, we can leapfrog to the top. I went to China recently and found that its environment ministry monitors online 7,000 industrial units, which account for 60 per cent of China’s pollution load. Why can’t the Indian IT industry create such an online monitoring mechanism? I’ve set up a task force, and told the pollution control boards to start online monitoring of 200 units to begin with, say, steel and power plants.

You are opposed to the concept of carbon credits…
The concept of carbon credits has worked to India’s advantage, but I don’t agree with the philosophy. The guy in the West can continue to pollute so long as he invests in a CDM (Clean Development Mechanism allows net global greenhouse gas emissions to be reduced at a much lower global cost by financing emissions reduction projects in developing countries) project in our country. It is a guilt assuaging mechanism. Thanks to the CDM, India would have got FDI worth $6 billion by 2012, and at the same time neutralised another 10 per cent of our greenhouse gas emissions.

What’s our strategy for the Copenhagen Summit?
We have a defensive as well as an offensive strategy. We are saying no to international commitment and yes to domestic commitment— where we have set six targets (see The Big-ticket Items). If other nations want us to take on global commitments, then they should give us money and technology. Domestically, we are doing broadly indicative targets under domestic law, because it will benefit us and allow us to negotiate from a position of strength.

What are your expectations from the summit?
I would like three specific outcomes. One, an agreement that recognises our efforts in forestry: India has, in the last 10 years, grown its forest cover by 0.4 million hectares per year. India and China are the only countries with a growing forest cover, which acts as a giant carbon sink. We have just quantified that 10 per cent of our annual greenhouse gas emissions is absorbed by our green cover and we should get credit for this. Two, the CDM ends in 2012, but I would like it to continue: We are the world’s largest implementers of CDM projects. Three, some international agreement on technology sharing so that we can take on mitigation on a large scale.

Amidst fiscal tightening this year, you’ve got double budget allocations. How?
An issue doesn’t become a part of the national agenda unless it gets a certain critical amount of funding. Environment isn’t one because not enough public expenditure is allotted to it. I gave the Finance Minister plans and heads for expenditure and said give me money and I will deliver. In 2008-09, the total expenditure on forests, Centre plus states, was for Rs 3,700 crore. In 2009-10, it is Rs 8,000 crore. Results won’t show in the first year, but people can’t complain there is no money. Now I can breathe easy: I don’t have to spend all my time fighting for money.

You have got the money, but will it be spent well?
It’s true that the states, and not the Centre, will spend much of this money. The TFC has mooted the idea of Green Federalism to create an incentive structure for states to conserve green cover. Today, Himachal Pradesh, for instance, has all the incentives to reduce its forest cover for jobs, investments and development and none to retain it. So, the Centre can compensate the state for fulfilling a national objective. The next step would be to bring it in the Planning Commission.

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