India, the world’s third-largest emitter of greenhouse gases, will double its coal tax, from 200 rupees per metric ton ($2.93 USD) to 400 rupees per ton ($5.86), Finance Minister Arun Jaitley announced Monday in his budget 2016 speech to the nation’s parliament. The name of the tax will also be changed from the “Clean Energy Cess” to the “Clean Environment Cess,” Jaitley said. The new budget, if approved by both houses of the Indian Parliament will come into effect April 1.
This is the second consecutive year in which the tax has increased. In 2015, the government boosted the tax from 100 rupees to 200 rupees. The tax applies to coal, lignite, and peat mined in India, as well as imported material. Funds collected from the tax will be used to fund clean energy and environmental projects in the country.
Coal-based power currently accounts for about 60.8 percent of India’s installed capacity, and it is expected to continue to dominate the nation’s power generation into the future.
Under the international climate deal struck in December in Paris, India made significant decarbonization commitments. In the country’s Intended Nationally Determined Contribution to the agreement, New Delhi committed to reducing the emissions intensity of its GDP by 33 to 35 percent by 2030 from 2005 levels. The country intends to reach this goal in part by increasing the amount of electric power installed capacity from non-fossil fuel-based energy resources to about 40 percent by that time.
India has been vocal about the need to recognize the vast differences between the developing and developed world in terms of historical energy consumption, GDP, and emissions. The current climate change problem has its roots in the Industrial Revolution, and the countries that benefited at that time should not shame nations that only now have their chance to grow, the Indian INDC says.
While India acknowledges the problem of climate change, it also stresses the need to solve the energy poverty problem within its own borders.
“Nations that are now striving to fulfill this ‘right to grow’ of their teeming millions cannot be made to feel guilty of their development agenda as they attempt to fulfill this legitimate aspiration. Just because economic development of many countries in the past has come at the cost of environment, it should not be presumed that a reconciliation of the two is not possible,” the INDC says.
