Funding of the National Clean Air Plan (NCAP)
The notes on Demand for Grants, 2024-25 for the new budget mentions that pollution control has been conceptualised to provide financial assistance to pollution control boards/committees to fund the National Clean Air Programme (NCAP). About Rs 850 crore has been earmarked this year for NCAP, which is about Rs 100 crore higher than the previous year. This is a smaller share of the overall NCAP funding as the larger share is expected from the XVIth Finance Commission. It is, however, important to underline that the experience with the NCAP so far has shown that the scope of the programme and its spending strategy requires reforms to make the programme scalable and effective across all key sectors of pollution, including industry, transport and all other combustion sources that emit highly toxic emissions. It should not remain largely a dust control programme. The funding in the sector requires a longer term policy roadmap along with an up-scaled funding strategy.
Mission on critical material to empower electric mobility and renewable energy: The Union Budget 2024-25 has announced establishment of a critical mineral mission to give impetus to the domestic production, recycling and overseas acquisition of critical minerals to boost domestic battery production and reduce import dependence. Accordingly, import duty has been reduced. The mission is expected to enable technology and skill development, implementation of the extended producer responsibility framework, and a financial mechanism.
While this is a good step forward, it is equally important to build stronger levers to stimulate the electric vehicle production and renewable energy technologies to create a stronger market pull for absorption of the new production and create domestic supply and value chain to build the new economy.
Focus on urban agenda – integrating urban and transport planning
It is encouraging that this year the Union budget 2024-25 has a sharper focus on the urban agenda with a stronger linkage with the new generation urban transformation strategy – Transit Oriented Development (TOD) in 14 large cities with a population above 30 lakh. This is an important urban planning strategy to enable people to come and live closer to the transport and transit nodes to reduce their dependence on personal vehicles that can help to reduce emissions and carbon intensity of urban growth. Now funds have been linked with this strategy.
It is, however, necessary to ensure that the TOD programmes are implemented as per the principles and design guidelines to make communities transit-oriented and deliver on missed use, missed income, walkable and accessible zones and not just as a narrow strategy to increase floor area ratio to maximise built area and revenue.
The new budget has also highlighted the framework for creative brownfield redevelopment of existing cities and orderly development of peri-urban areas through economic and transit planning. These strategies are important to integrate transportation and urban planning to promote sustainable mobility options including public transport, walking and cycling and regeneration of urban areas with improved urban services to reduce dependence on automobiles for more sustainable urban growth.
Additionally, the focus on PM Awas Yojana or the housing scheme for the low income and urban poor is an opportunity not only to meet the housing gaps for the urban poor but also to build thermally comfortable buildings for all to be more climate and heat resilient in the climate challenged world.
The climate agenda
The Union Budget announced a few key policy signals crucial to decarbonise the Indian economy: the development of emission targets for hard-to-abate industries, support for pumped storage projects and subsidies for rooftop solar plants. Particularly, the focus on pathways to decarbonize industry is a proactive and much needed step. We await more details on these pathways.
With a view to boosting green production the removal of customs duty on solar and EV components, and critical minerals are welcome developments. However, it is unclear if this will still enable cost-effective manufacturing of green technologies domestically.
The development of a climate finance taxonomy is a proactive step as well, to direct more green finance towards our economy. This is in line with global trends towards aligning finance flows with the Paris Agreement.
On climate adaptation, the measures are lacking, given that the only announcements are of climate-resilient varieties of crops to be released for cultivation, and the building of flood control structures in flood-prone States. More needs to be done to address a range of impacts from heatwaves to sea level rise.
The energy agenda
As India strives to achieve its goal of generating 500 GW of renewable energy by 2030, the measures outlined in this budget will be crucial in shaping a resilient and economically vibrant energy landscape. However, the Union budget speech reveals a clear mismatch with Modi 3.0’s vision and announcements for the sector. The renewable energy sector did not receive a clear and supportive message from the current government. This disconnect raises concerns about the alignment of policy and strategic objectives necessary to meet the ambitious 2030 target.
There is talk about small nuclear plants and a new advanced ultra-super critical thermal power plants which have the best efficiency amongst current technologies, but no provision for improving efficiency of the current fleet of coal-based thermal power plants or ramping up other sources of RE.
The biggest disappointment is that there is no roadmap for the hard to abate sectors, except one sentence on moving from the PAT scheme to a carbon trading mechanism. If India has to meet the 2070 target of net zero, work has to start now – but this is not apparent in the budget speech.
(A CSE Briefing)
