India's own emission reducing mechanism

The PAT mechanism for trading energy efficiency certificates, unique in the world, will be functional from April. A similar emission certificate trading system will be launched by end of this year. Chetan Chauhan reports.

Updated on: Jan 28, 2011, 01:32:54 IST

Hindustan Times | By Chetan Chauhan, New Delhi

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Companies consuming less energy will now be able to sell the efficiency certificates to the non-efficient ones, domestically.

India's domestic energy efficiency trading system ---- Perform, Achieve and Trade (PAT) ----- similar to international Clean Development Mechanism of the United Nations will become operational from this April.

"The programme provides flexibility to take benefit under PAT as well as CDM," said Ajay Mathur, Director General of Bureau of Energy Efficiency, which will be running India's first programme. "A company which reduced its consumption of power can also register with the UN."

It is country's first trading mechanism aimed at reducing carbon dioxide emissions to fight climate change. As much as 10 million tonnes equivalent of oil would be saved in next three years.

The Ministry of Environment and Forest will soon launch the second ---Emission Trading Scheme (ETS). In this, the companies having high overall emissions will be able to buy emission certificate from the lesser polluting industries. "We have started online monitoring of few hundred industries in some cities in Gujarat and Tamil Nadu. Once we have the database the system will be launched," said S P Gautam, chairperson of the Central Pollution Control Board (CPCB), the projecting implementing body.

Mathur said the PAT mechanism is being introduced for eight polluting sectors such thermal power and almunium refineries with an aim to reduce their energy consumption by five percent in three years. It would mean that these sectors would recover their entire investment of about Rs 30,000 crore for adopting clean technology within a period of three years. "After that the saving would be the profit," he said.

Reducing energy consumption is mandatory for these sectors under the Energy Efficiency Act, 2001. The industries failing to meet the reduction target will have to pay a penalty of Rs 10 lakh plus the charge of excess they consume above the stipulated target. However, adopting PAT is voluntary.

The programme under National Mission for Enhanced Energy Efficiency (NMEEE), one of the eight action plans on Climate Change, will be market driven, rather than being controlled by the market. The BEE will set up two exchanges through which the energy efficiency certificates could be traded to escape the huge penalty.

The energy efficiency trading is expected to start from September this year by when designated energy auditors will conduct audit for the industries to prepare a baseline for the trading system to work. "It is one of the unique energy efficiency programme in the world," said Power Secretary P Uma Shankar.

ABOUT THE AUTHOR
Chetan Chauhan
Chetan Chauhan is the National Affairs Editor looking into all aspects of news and features from across India. A Chevening scholar with over three decades of experience in reporting and news management, Chetan has extensively covered all important aspects of the social sector, political economy, environment and climate change nationally and internationally. He did a journalism course at the Reuters Institute of Journalism in Oxford and Digital Media training at Nanyang Technological University in Singapore. He started as a reporter with The Statesman in 1996 and joined the Hindustan Times in 2000 in the metro bureau covering environment, crime and Delhi politics. He covered hot local news, from the Jessica Lal murder case to the rebellion of Delhi Congress MLAs against then Chief Minister Sheila Dikshit, to the replacement of toxic vehicle fuel with cleaner compressed natural gas (CNG) in the national capital. Some of his stories on air pollution became part of the Supreme Court’s landmark MC Mehta versus Government of India case in the National Capital Region (NCR), forcing the government to take corrective measures. As part of the national political bureau since 2004, he covered important central sectors such as environment, education, social justice, labour, rural development, water resources, renewable energy, agriculture, broadcasting and the Planning Commission for more than a decade producing several exclusive and investigative breaking stories. His specialisation is the environment, having covered at least a dozen United Nations global conferences on climate change, biodiversity and wildlife including climate summits in Paris, Copenhagen and Bali. He also covered India’s two five-year plans ---11th and 12th and reported on drafting and execution of right based laws such as Right to Education, Right to Information and rural job guarantee law, MG-NREGA, now being introduced in new format as VG-RAM-G Act. He has in-depth knowledge of social sector issues. He was one of the first to report on tigers vanishing from Sariska and Panna wildlife reserves in 2004 and 2008, respectively, leading to the setting up of the National Tiger Conservation Authority (NTCA) and the introduction of stringent penal provisions for poaching. He has written extensively on the rising human-animal conflict in India and the degradation of India’s biodiversity hotspots because of mining and other activities. Since 2004, Chetan has covered Parliament comprehensively and participated in training on the nuanced coverage of Parliament proceedings. He has travelled extensively across India to cover national and provincial elections since 1998, especially in the Hindi heartland states, considered India’s road to power. He writes a regular column for Hindustan Times, Ecostani, on important national politics, economy, Himalayan ecology and environmental issues. His other responsibilities include providing inputs for edits and edit page articles for the publication, apart from managing news flow from across India.Read More

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