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India’s Rs 200,000 Crore Spend On Clean Energy

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The ‘Earth Summit’ is on in Rio de Janeiro, Brazil. India is among many countries at the receiving end for its efforts (or the lack of it) in climate change.


IndiaSpend’s Prachi Salve provides a snapshot of India’s planned spends in the context of its policy to focus not just on mitigation but also adaptation to climate change.


Here’s the big number: if you were to add up all of the Government’s specific, planned investments and expenditure in the next 10 years towards climate change, the figure comes to Rs 253,208 crore.


First, a little background on the scale of the task ahead; India’s per capita green house gas (GHG) emission target by 2030-31 is to stay under 4 tons of  CO2 equivalent, lower than the global per capita emissions of 4.22 tons of CO2 equivalent in 2005.


In order to do this, India has evolved a 3-pronged approach to climate change.


1] The National Action Plan on Climate Change (NAPCC) which in turn has 8 missions (See Table 3) comprising of both mitigation and adaptation measures. The mission represents ‘multi-dimensional, integrated and long-term strategies’ with regard to climate change.


2] Reduce emission intensity of Gross Domestic Product (GDP) by 20-25% of 2005 levels by 2020. This will be done by embarking on a low carbon development strategy.


3] The states have also been asked to create state-level, aligned, action plans as extensions of the 8 missions of the NAPCC.


The United Nations Framework Convention on Climate Change (UNFCCC) estimates a requirement of $200-210 billion in additional annual investment by 2030 to return GHG emissions to current levels. Furthermore, an investment of nearly $60-182 billion by 2030 worldwide is needed for adaptation.


Financing The Battle Against Climate Change


India like many other developing countries needs to find means to finance the design and implementation of the adaptation and mitigation plans.  Currently, India spends around 2.8% of its GDP in programmes which have strong ‘adaptation relevance’. For example; making agriculture more sustainable and bringing about energy efficiency in general. The Planning Commission statement does not give further details though.


Funding for climate change can be divided into 3 main areas:


A] International sources

B] Domestic source

C] Carbon markets


International Resources

One major fund being looked at is the Green Climate Fund (GCF), also one of the biggest and consistent funds for countries like India. However the fund is still under construction and its operational scope and modalities is not known.


Another important fund which is currently operational is the GEF (Global Environment Facility). During the Copenhagen or COP 15 Summit, the developed countries pledged additional resources of $30 billion for the period of 2010-12 for mitigation and adaptation. The following table shows the amount of money approved for India through various international sources of finance at this point. Most of these funds are one-off.


Table 1

International Funding For Indian Climate Change

Source Amount
Green Environment Fund 129
Clean Technology fund 4,369
Bilateral funds 8,557


Source: Climate fund updates

(Rs Crore)



Domestic Funding For Climate Change


Now, let’s look at the India’s Budgetary Allocation for specific programs under the Union Budget 2012.  The Government allocated nearly Rs 2,430 crore to the Ministry of Environment and Forestry (MoEF) in Budget 2012. The climate change budget is a small component of this figure.


Table 2


India Budgetary Support For Climate Change


Program Allocation
Green India Mission 200
Environmental Remediation Program 200
Cleaning of rivers and lakes 200


(Rs crore)

Source: Union Budget

The National Clean Energy Fund (NCEF) was created to support commercialisation of clean-energy technologies which help reduce dependence on fossil-fuels. The fund is supported through a cess on coal at Rs 50 per ton introduced in 2010. The fund has allocated Rs 200 crore for environmental remediation and another Rs 200 crore for the Green India Mission.


In addition to the allocations made, the Planning Commission has recommended to the 13th Finance Commission for 2010-15 to provide budgetary allocation for 3 types of grants to state governments of Rs 5,000 crore each, viz. for forest cover, renewable and water sector.


Potential From Carbon Markets

Carbon trading offers developed countries an opportunity to meet their GHG emissions by buying carbon credits from developing countries. This opens up financial resources for funding climate change adaptation and mitigation programmes.


India is an active player in the Clean Development Mechanism (CDM) which provides India with the funding required to implement its climate change programs. The National CDM (NCDM) in the Ministry of Environment and Forestry (MoEF) has provided Host Country Approval to over 2,000 projects with a potential to facilitate an overall inflow of approximately $7.07 billion (Rs 39,840 crore) in the country by the year 2012 if all the projects get registered.



Is India spending enough on climate change? More importantly, while the efforts are being made, the resources required to combat climate change in specific may not be sufficient. Possibly, the international community needs to contribute more and help in technology transfers. If nothing works, there is always the fuel subsidy to cut.



The following table gives details of the NAPCC’s 8 missions along with their costs estimates.


Table 3

The 8-Mission, Rs 253,208 Crore Spend


Name of the Mission Nodal agency Salient Features Costs
National Solar Mission Ministry of New & Renewable Energy Launched on January 11, 2010, the Jawaharlal Nehru National SolarMission aims to increase the share of solar energy in India’s energy mix. The Solar Mission recommends the implementation in 3 stages leading up to an installed capacity of 20,000 MW by the end of 13th Five Year Plan in 2022. The total financial outlay during Phase I is estimated as Rs 4, 337 crore of which Rs 2,527 crore is for the remaining period of the 11th Plan. Requirement for Phase II will beassessed after review of implementation ofPhase I.
National Mission for Enhanced EnergyEfficiency Ministry ofPower/Bureau of Energy Efficiency The mission was approved by the Union Cabinet on June 24, 2010. The mission aims to upscale the efforts to create a market for energy efficiency and create a conducive regulatory and policy regime to foster innovative and sustainable business models to unlock this market. The total requirement projected under the Mission between 2010 and 12 is Rs 425.35 crore. This is intended d to attract private sector investment in energy efficiency market estimated at Rs 74,000/- crore.
National Mission onSustainable Habitat Ministry of UrbanDevelopment/Ministryof Housing and UrbanPoverty/Alleviation This mission attempts to promote energy efficiency in buildings, management of solid waste and modal shift to public transport including transport options based on bio-diesel and hydrogen. The total cost estimate projected in the Mission Document is Rs 1000 crore.  During 11th Plan, expenditure of Rs 50 crore is to be incurred and remaining Rs 950 crores is to be incurred during the 12th Five Year Plan.
National WaterMission Ministry of Water Resource The Union Cabinet approved its implementation on April 6, 2011. This mission aims at to the conservation of water, minimizing wastage and ensuring more equitable distribution both across and within states. Total estimated additional fund required for implementing the Mission is Rs 89,101 crore. During the 11th and the 12th Five Year Plan period. This includes expenditure on schemes implemented through the State Plans and the Central Plan.
National Mission forSustaining the Himalayan Ecosystem Ministry of Science and Technology This mission aims at evolving management measures for sustaining and safeguarding the Himalayan glacier and mountain eco-system. For implementing the activities, a total fund of Rs 195 crore is required in the 11th Plan period. Provision of Rs 1,500 crore is to be made under 12th plan period for achieving the mission objectives.
National Mission forGreen India Ministry of Environment and Forests This mission focuses on enhancing eco-system services and carbon sinks through afforestation on degraded forest land in line with the national policy of expanding the forest and tree cover to 33% of the total land area of the country. An expenditure of Rs 46,000 crore is projected under the Mission for coverage of 10 million hectares over next 10 years.
National Mission forSustainableAgriculture Ministry of Agriculture andCooperation/DARE This mission would develop strategies to make Indian agriculture more resilient to climate change new varieties of thermal resistant crops, new credit and insurance mechanisms and improving productivity of rain-fed agriculture. The proposed adaptation and mitigation activities under the Mission require an additional budgetary support of Rs 1,08,000 crore at current  prices up to the end of the 12thplan.
National Mission onStrategic Knowledgeon Climate Change Ministry of Science and Technology This mission is intended to identify the challenges of, and the responses to, climate change through research and technology development and ensure funding of high quality and focused research into various aspects of climate change. Additional fund of Rs. 150 crores is requiredin the 11thplan period for implementing theMission activities. Provision of Rs 2,500crore is to be made under the 12th plan period for achieving mission/sub-mission programme initiatives.

Source: Planning Commission

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