A study funded by the UK’s Foreign and Commonwealth Office will suggest fiscal incentives that State Governments can adopt to enable environment-friendly industrial development.
The study, to be finalised by the year-end, suggests a slew of fiscal instruments that Tamil Nadu, West Bengal and Odisha can use to reduce carbon emissions while promoting industrial growth. These three States have been selected for their aggressive plans in industrial development.
The study, presented today in the presence of David Wootton, Mayor of the City of London, by Professor K R Shanmugam, Director, Madras School of Economics, has shortlisted seven fiscal instruments that West Bengal and Orissa could adopt and four in Tamil Nadu. A key feature of these schemes is that they do not represent any expenditure for the governments but provide support by industries.
For West Bengal and Odisha, the study suggests measures such as low carbon refunding schemes for power sector, industry and waste management, where environment-friendly projects such as renewable energy are supported by conventional industry; grants and funds; incentives for renewable energy, including waste heat recovery and for green buildings.
In Tamil Nadu, the study suggests a green cess on conventional power generation and power consumers that could be used to fund renewable energy projects, support to cement industries to set up equipment in their kilns to burn – coprocess – waste, tax incentives for green buildings and to the transportation sector to encourage alternative fuels.
Wootton said there is a strong “environmental, moral and business case to bring down carbon emissions.” The price of oil will see an inexorable rise over the next decade. To remain competitive, economies will have to increase efficiency and invest in renewable technologies and sustainable growth. Multilateral agreements will be needed to deliver real change.
London has a key role to play with its expertise in practical market experience. The city is a leading centre for energy brokers in carbon markets and is a leader in launching and managing carbon funds.
