1. How is a green economy defined?

For the purposes of the Green Economy Initiative, UNEP has developed a working definition
of a green economy as one that results in improved human well-being and social equity, while
significantly reducing environmental risks and ecological scarcities. In its simplest expression,
a green economy can be thought of as one which is low carbon, resource efficient and
socially inclusive.

Practically speaking, a green economy is one whose growth in income and employment is
driven by public and private investments that reduce carbon emissions and pollution, enhance
energy and resource efficiency, and prevent the loss of biodiversity and ecosystem services.
These investments need to be catalyzed and supported by targeted public expenditure, policy
reforms and regulation changes. This development path should maintain, enhance and,
where necessary, rebuild natural capital as a critical economic asset and source of public
benefits, especially for poor people whose livelihoods and security depend strongly on nature.

2. How is a green economy measured?

A wide range of indicators can help measure the transition towards a green economy. UNEP
is working with partners such as the OECD and the World Bank to develop a suite of
indicators – primarily building on existing frameworks - which governments will be able to
choose from depending on their national circumstances, such as the structure of their
economy and their natural resource endowment. The indicators being developed can be
roughly divided into the following three groups:

o Economic indicators: for example, share of investments or the share of output and
employment in sectors that meet a sustainability standard, such as green GDP.
o Environmental indicators: for example, resource use efficiency or pollution intensity at
either the sectoral or economy-wide level, for example, energy use/GDP, or water
use/GDP
o Aggregate indicators of progress and well-being: for example, macroeconomic
aggregates to reflect natural capital depreciation, including integrated environmental
and economic accounting, or broader interpretations of well-being beyond narrow
definitions of per capita GDP.

 How does a green economy contribute to sustainable development?

Sustainable development has been defined as “development which meets the needs of the
present without compromising the ability of future generations to meet their own needs.” It
gained international attention in the late 1980s following the Brundtland Commission’s
landmark report, “Our Common Future”, and further prominence at the 1992 Earth Summit
where it served as a guiding principle for international cooperation on development. Achieving
sustainable development requires the advancement and strengthening of its three
interdependent and mutually reinforcing pillars: environmental protection, social development,
and economic development.

Moving towards a green economy can be an important driver in this effort. Rather than being
seen as a passive receptor of wastes generated by economic activity or as one of many
substitutable factors of production, the environment in a green economy is seen as a
determining factor of economic production, value, stability, and long term prosperity – indeed,
as a source of growth and a spur to innovation. In a green economy, the environment is an
“enabler” of economic growth and human well-being. Additionally, since the poor are most
dependent on the natural resource base for their livelihoods and least able to shield
themselves from a degraded environment, movement towards a green economy also
promotes equitable growth.
As such, the shift to a green economy can be seen as a pathway to sustainable development,
a journey rather than a destination. The nature of a ‘green economy’ sought after by a
developed or developing nation can vary greatly, depending on its geographical confines, its
natural resource base, its human and social capital, and its stage of economic development.
What does not change however are its key tenets – of targeting improved human well-being
and social equity, whilst reducing environmental risks and ecological scarcities.

 How does a green economy help eradicate poverty?

Today’s economic wealth, as traditionally defined and measured through GDP, is often
created through the overexploitation and pollution of our “common” natural resources, from
clean freshwater to forests to air essential to our very survival. This type of economic growth,
as traditionally defined, has resulted in high economic and social costs, especially for the poor
who depend on these resources for their livelihoods and are especially vulnerable to
environmental contamination and degradation. The current unprecedented loss of biodiversity
and ecosystem degradation is affecting sectors such as agriculture, animal husbandry, fishing
and forestry – the very sectors which many of the world’s poor depend on for their livelihoods.

Equally important, the move towards a green economy aims to increase access to basic
services and infrastructure as a means of alleviating poverty and improving overall quality of
life. This includes, for example, providing energy access to the 1.4 billion people who
currently lack electricity, and another 700 million who are deprived of modern energy
services. Renewable energy technologies, such as solar and wind power, and supportive
energy policies promise to make a significant contribution to improving living standards and
health in low income areas, particularly to those that currently lack access to energy.

Finally, significant opportunities exist to discontinue and redirect environmentally harmful

subsidies. For instance, governments around the world are currently spending an estimated
US $700 billion annually to subsidize fossil fuels. This represents five times the amount of
money countries worldwide spend on development assistance. The largest part of these
subsidies is being allocated by governments of developing countries, in an effort to cushion
the shock of price increases on the poor. Yet, many studies have shown that fossil fuel
subsidies are inefficient in targeting the poor, and are often benefit disproportionately higher
income groups. Removing or dismantling environmentally harmful subsidies and replacing
them with more targeted support, such as cash transfers, can increase social protection goals
while easing fiscal constraints and improvement environmental outcomes.

 How are the concepts of sustainable consumption and production and green
economy related?

Green economy and sustainable consumption and production represent two sides of the
same coin. They both share the same objective of fostering sustainable development,
covering macro to micro-economic dimensions of public policy and regulation, business
operations and social behaviour. Sustainable consumption and production is primarily
focused on increasing resource efficiency in production processes and consumption patterns.
Complementing this, green economy activities consider macro-economic trends and
regulatory instruments governments can pursue through economic and other policies to
promote economic growth and job creation that meets the criteria of being green and decent.

In practice, work towards achieving a green economy and sustainable consumption and
production are mutually supportive, covering macro and micro interventions that require
change in policy and regulatory instruments, investment and business operations, as well as
behavioural change in society.

Both are currently high on the international agenda. The 10-Year Framework of Programmes
on Sustainable Consumption and Production (the 10 YFP) is one of the key themes of the
Commission on Sustainable Development’s (CSD) agenda, developed as a consequence of
the World Summit on Sustainable Development (2002). Constructing a green economy in the
context of sustainable development and poverty eradication is one of the two central themes
of the UN Conference on Sustainable Development (Rio+20) that will take place in 2012. It
was recognized at CSD 18 that the 10 YFP could be an important input to the UNCSD,
serving as a key building block for the transition to a green economy.

 How does a green economy support employment?

A green economy creates jobs in a wide range of sectors of the economy as new markets
emerge and grow, such as in organic agriculture, renewable energy, building retrofits for
energy efficiency, public transportation, reclamation of brown-field sites, and recycling, among
others.

Decent jobs, with high labour productivity as well as high eco-efficiency and low emissions,
hold the promise to provide rising incomes, spur growth and help to protect the climate and
the environment. Such green jobs already exist and some have seen high growth, for
example, as a result of investment in energy efficiency.

Nonetheless, to ensure a smooth transition to a green economy, a concerted effort in job

creation is necessary. Social policies will need to be developed along with environmental and
economic policies. Key issues like investing in new skills needed for a low-carbon global
economy and policies to handle the employment adjustments in key sectors like energy and
transport will be needed to ensure a smooth transition.

 How does a green economy protect and preserve biodiversity?

The loss of biodiversity has caused some people to experience declining well-being, with
poverty in some social groups being exacerbated. If that loss continues it may also
compromise the long term ability of ecosystems to regulate the climate and could lead to
additional, unforeseen, and potentially irreversible shifts in the earth system and changes in
ecosystem services. Furthermore, the ecosystem is the prime provider of a number of raw
materials that serve as an engine for economic development. For these reasons, the
preservation and protection of ecosystems is at the heart of the green economy agenda and
green investments also aim at reducing the negative externalities caused by the exploitation
of natural capital.

For instance, investments in the preservation of forests which sustain a wide range of sectors
and livelihoods and at the same time preserve 80% of terrestrial species. By boosting
investment in green forestry, a green economy agenda would preserve the economic
livelihoods of over 1 billion people who live from timber, paper and fiber products which in
their turn currently yield 1% of global GDP (this is far outweighed by the non-market public
goods derived from forest ecosystem services)

 What does the green economy offer for developing countries?

Green economy policies can help developing countries attain economic and social gains on
several fronts, such as through the deployment of cleaner energy technologies and improved
access to energy services; improved resource efficiency through investments in cleaner
production approaches; increased food security through the use of more sustainable
agricultural methods; and access to emerging new markets for their green goods and
services. Improvements in resource efficiency and in diversifying the energy matrix can
reduce import bills and protect a country from price volatility in energy markets, while reducing
the environmental footprint and associated health costs of economic activity. Of course, each
country must assess and evaluate its own resource endowment to determine how to best
optimize its opportunities for sustainable economic growth.

As highlighted in UNEP’s recent report, “Developing Countries Success Stories”, there are a
number of ongoing developing country initiatives that are demonstrating a positive benefit
 stream from specific green investments and policies, and if scaled up and integrated into a
comprehensive strategy, could offer an alternative sustainable development pathway, one
that is pro-growth, pro-jobs and pro-poor.

 Does a green economy lead to protectionism?

Concerns have been raised that the implementation of a green economy could lead to trade
protectionism and conditionalities on development aid. Trade measures encouraging
environmentally sustainable practices, including standards, subsidies, public procurement,
and market access related measures, are often mentioned as potentially leading to green
protectionism. For instance, there is concern that environmental standards, although effective
in stimulating markets in sustainable goods and services, can also serve as a barrier to
developing country exporters, particularly small and medium sized enterprises, which may
lack the necessary resources to meet the standards.

Given this risk, it is essential to find the right balance between safeguarding market access on
the one hand, and protecting health and the environment on the other. At the international
level, one important means of mitigating this risk is to ensure the substantive participation of
developing country actors in relevant standard setting negotiations and processes to ensure
the concerns are addressed. At the national level, the formulation of green economy policies
needs to consider the potential effects on the trading positions of other countries, especially
low income countries.

 What can governments do to enable a green economy?

There are a number of policies that national governments might consider adopting or
strengthening in order to stimulate green investment and enable a green economic transition,
ranging from regulatory and economic instruments to public-private partnerships and
voluntary initiatives. The relevance and efficacy of a particular policy is often highly dependent
on the unique endowments and capacities of the country considering the policy.

One of the most direct ways for governments to promote a green economy is through public
finance and fiscal measures. For instance, public expenditure on research and development
can be an effective means of stimulating the innovation necessary to transition to a green
economy. In many developing countries where access to capital is limited, public investments
in a green economy are particularly important. Governments can also lead by example
through the use sustainable public procurement efforts that stimulate demand for green
products and services.

Additionally, governments can correct for negative externalities by ensuring that prices reflect
the actual costs of goods and services, including the environmental costs which are often not
captured by the market. The reform of harmful subsidies, such as many of the fishery and
fossil fuel subsidies, and the use of taxation instruments, such as levies on pollution, are key
policy interventions available to many governments.

A legal framework that facilitates green economic activity and regulates harmful forms of
production and consumption is also necessary. Building the capacity of governments and
other stakeholders, as well as promoting actions that increase public support for change, may
also be required in the transition to a green economy.

Green Economy to Open up Millions of Green Jobs in India

As the Indian economy adapts to climate change, it needs a large green collar workforce to sustain a low-carbon

economy in the long term. Greening of the economy in India is going to be a long process which promises high-

growth jobs in manufacturing, management and marketing, as well as several niche positions for enterprising job

seekers looking for alternative career options. Energy supply, mainly in the renewable energy sector, buildings

and construction, transportation, basic industries, agriculture and forest are likely to be the prime sectors of

emphasis in terms of employment impact.

900,000 green jobs by 2025

According to a recent report commissioned by a number of UN organisations, in the area of biogas alone, India

can generate 900,000 jobs by 2025. Of these, 300,000 would be in the manufacturing of stoves and 600,000 in

areas such as processing into briquettes and pellets and the fuel supply chain. The report estimates that the

global market for environmental products and services would double from $1.37 trillion a year now to $2.74 trillion

by 2020. This would create millions of new green jobs.

As India is expected to have a fair share of this green economic growth, it will need to create a strong trained and

skilled green workforce. The emerging economy will require a green workforce comprising conservation workers,

environmental consultants, and engineers across disciplines, green building architects, socially responsible

investors, organic farmers, environmental lawyers and ecology educators. Vocational workers such as

electricians to install solar panels, plumbers to install solar water heaters and construction workers to build green

buildings or wind power farms will be very much in demand.

Training and skill building

This will call for special efforts towards training and skill building through different means such as trade schools,

universities, on-the-job training in the workplace etc. India should follow the examples of Arizona State University

in the US which opened a School of Sustainability in 2007 and the University of California at Davis which is

offering a major course in sustainable agriculture.

India’s initiatives to develop a low-carbon economy and green resources are certainly sincere. But the efforts

have at best been fragmented due to insufficiency of financial resources, ineffective industry-academia

partnership and lack of collaborative research. What is needed is a more holistic approach from the Indian

corporate sector with adequate backing from the Government.

ndia: a Potential Market for Green Economy

 

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Posted in Green Market on March 31st, 2010 | no responses

One of the biggest challenges that the world faces today is Climate Change. The industrial
sector and businesses especially face a lot of flak by environmentalists as being insensitive to
the need of a sustainable environment. The production processes and the rise in consumption
levels kick off a lot of environment-unfriendly activities such as exploitation of natural resources,
burning of fossil fuels that release the greenhouse gasses, shipping etc.

Now that consumers have become aware and are environment conscious, they too want to do
their bit to make the planet greener and are hence checking the green credentials of the
companies and products before finally buying anything.

The industrial sector, therefore, does not only help the planet by adopting green technology, they

stand to gain a lot in  terms of profit too if they cater to the market
demands.

“Climate change”, mentions Stuart Fraser, chairman of policy in the City of London, “could be
one of this century’s greatest business opportunities”.

In the article titled “Climate Change is a fight beyond governments”, published in the Sunday
Times of India (March 28, 2010 issue), Fraser outlines a number of factors that highlight India as
a country with the potential to position itself as a world leader when it comes to harnessing green
technologies. In his article, he mentions that estimates show that the green spending in India
could reach $150 billion by 2017 that is just seven years from now. At present, it is the third
largest market for low-carbon and ‘green’ goods and this sector is expanding at a considerably
fast pace.

The public-private partnership or joint efforts can give a boost to a green economy in India. In
fact, Fraser says that businesses and financial institutions have to be actively involved in the
processes to develop a low-carbon economy.

Indian Government has recently introduced some positive steps that can ignite ‘green
investment’. For instance, India aims to increase its share of grid connected renewable energy
to 10 per cent in two years time. There are plans of generating 20 Giga Watts of power by 2022
by harnessing solar power. The Budget 2010-11, the Government announced its plans to
introduce a National Clean Energy Fund. The budget also introduced some subsidies on green
technology such as those on the production of photovoltaic plates for solar lamps and other
products. These steps are welcome as they will invite more investment for a green economy.

The demands for energy in India, as is mentioned in the article, will more than double in 20 years
from now. That will have an immediate effect on the resources available such as the forests,
grasslands and the agricultural lands. Finding a solution to these challenges, following a course
of development while not compromising on the principle of sustainability and promoting a clean
and green economy, are the challenges as well as opportunities that India today faces and
needs to deal with them on an urgent basis.

WHAT IS GREEN ECONOMICS?
      

Green economics is the economics of the real world—the world of work, human needs, the
Earth’s materials, and how they mesh together most harmoniously.  It is primarily about “use-
value”, not “exchange-value” or money.  It is about quality, not quantity for the sake of it.  It is
about regeneration---of individuals, communities and ecosystems---not about accumulation, of
either money or material.  

The industrial or capitalist definition of wealth has always been about the accumulation of
money and matter.  Any use-values generated (i.e. social needs met) have been secondary—a
side-effect, by-product, spin-off or trickle-down—to the primary goal of monetary accumulation.   
For two centuries, the quest to accumulate money or capital drove a powerful industrialization
process that actually did spin off many human benefits, however unfairly distributed.  But blind
material and monetary growth has reached a threshold where it is generating more destruction
than real wealth.  A postindustrial world requires an economics of quality, where both money and
matter are returned to a status of means to an end.  Green economics means a direct  focus on
meeting human and environmental need.

 
 Tinkering with money, interest rates, or even state regulation is insufficient in creating
sensible economies.  One can scarcely imagine a more inefficient, irrational and wasteful way to
organize any sector of the economy than what we actually have right now.  Both the form and
the content of sustainable agriculture, of green manufacturing, of soft energy, etc. are
diametrically opposed to their current industrial counterparts, which are intrinsically wasteful.  
There is no justifiable rationale to be producing vast quantities of toxic materials; or generating
more deskilled than skilled labour; or displacing labour rather than resources from production; or
extending giant wasteful loops of production & consumption through globalization.  These are
economic inefficiencies, economic irrationalities that can only be righted by starting from scratch
—to look at the most elegant and efficient ways of doing everything.  As green economist Paul
Hawken writes, our social and environmental crises are not problems of management, but of
design.  We need a system overhaul.

Green economics is not just about the environment.  Certainly we must move to
harmonize with natural systems, to make our economies flow benignly like sailboats in the wind
of ecosystem processes.  But doing this requires great human creativity, tremendous knowledge,
and the widespread participation of everyone.  Human beings and human workers can no longer
serve as cogs in the machine of accumulation, be it capitalistic or socialistic.  Ecological
development requires an unleashing of human development and an extension of democracy. 
Social and ecological transformation go hand-in-hand.  

            Green economics and green politics both emphasize the creation of positive alternatives in
all areas of life and every sector of the economy. Green economics does not prioritize support for
either the "public" or the "private" sector. It argues that BOTH sectors must be transformed so
that markets express social and ecological values, and the state becomes merged with grassroots
networks of community innovation. For this to happen, new economic processes must be
designed, and new rules of the game written, so that incentives for ecological conduct are built
into everyday economic life. The state can then function less as a policeman, and more as a
coordinator. This is a very different kind of "self-regulation" than current profit- and power- driven
market forces. The basis for self-regulation in a green economy would be community, and
intelligent design which provides incentives for the right things.

           Here are ten interrelated principles that cover key dimensions of a green
economy:

1. The Primacy of Use-value, Intrinsic Value & Quality: This is the fundamental principle of
the green economy as a service economy, focused on end-use, or human and environment
needs. Matter is a means to the end of satisfying real need, and can be radically
conserved. Money similarly must be returned to a status as a means to facilitate
regenerative exchanges, rather than an end in itself. When this is done in even a
significant portion of the economy, it can undercut the totalitarian power of money in the
entire economy.
2. Following Natural Flows: The economy moves like a proverbial sailboat in the
wind of natural processes by flowing not only with solar, renewable and
"negawatt" energy, but also with natural hydrological cycles, with regional
vegetation and food webs, and with local materials. As society becomes more
ecological, political and economic boundaries tend to coincide with ecosystem
boundaries. That is, it becomes bioregional.

3. Waste Equals Food: In nature there is no waste, as every process output is an

input for some other process. This principle implies not only a high degree of
organizational complementarity, but also that outputs and by-products are
nutritious and non-toxic enough to be food for something.

4. Elegance and Multifunctionality: Complex food webs are implied by the

previous principle--integrated relationships which are antithetical to industrial
society's segmentation and fragmentation. What Roberts & Brandum (1995) call
"economics with peripheral vision", this elegance features "problem-solving
strategies that develop multiple wins and positive side-effects from any one set of
actions".

5. Appropriate Scale / Linked Scale: This does not simply mean "small is
beautiful", but that every regenerative activity has its most appropriate scale of
operation. Even the smallest activities have larger impacts, however, and truly
ecological activity "integrates design across multiple scales", reflecting influence
of larger on smaller and smaller on larger (Van der Ryn and Cowan, 1996).

6. Diversity: In a world of constant flux, health and stability seem to depend on

diversity. This applies to all levels (diversity of species, of ecosystems, of regions),
and to social as well as ecological organization.

7. Self-Reliance, Self-Organization, Self-Design: Complex systems necessarily

rely on "nested hierarchies" of intelligence which coordinate among themselves
in a kind of resonant dance. These hierarchies are built from the bottom up,
and--in contrast to civilization's social hierarchies--the base levels are the most
important. In an economy which moves with ecosystem processes, tremendous
scope for local response, design and adaptation must be provided--although these
local and regional domains must be attuned to larger processes. Self-reliance is
not self-sufficiency, but facilitates a more flexible and holistic interdependence.

8. Participation & Direct Democracy: To enable flexibility and resilience,

ecological economic design features a high "eyes to acres" ratio (Van der Ryn &
Cowan, 1996)--that is, lots of local observation and participation. Conversely,
ecological organization and new information/communications technologies can
provide the means for deeper levels of participation in the decisions that count in
society.

9. Human Creativity and Development:  Displacing resources from production

and tuning into the spontaneous productivity of nature requires tremendous
creativity.  It requires all-round human development that entails great qualities
of nurture.  These are qualities of giving and real service that have been
suppressed (especially in men) by the social and psychological conditioning of the
 industrial order.   In green change, the personal and political, the social and
ecological, go hand-in-hand.  Social, aesthetic and spiritual capacities become
central to attaining economic efficiency, and become important goals in
themselves. 

10. The Strategic role of the Built-environment, the Landscape & Spatial Design:
As Permaculturalist Bill Mollison  has emphasized, the greatest efficiency gains
can often be achieved by a simple spatial rearrangement of system components.
Elegant, mixed-use integrated design which moves with nature is place-based. In
addition, our buildings, in one way or another, absorb around 40 per cent of
materials and energy throughput in North America. Thus, conservation and
efficiency improvements in this sector impact tremendously on the entire
economy. 
 

Green economic conversion must be radical, but it must also be incremental and organic. How is
this possible? Rodale cites the need for a kind of economic succession which mimics ecological
landscape change. We need "pioneer enterprises" which can thrive in today's hostile economic
landscape, but also prepare the ground for more ecological and egalitarian enterprises to come. A
vision of what each sector of the economy would look like in an ecological economy--based on the
specifics of each place--is a starting point. This vision must be coupled with practical action in each
of these sectors, gradually moving toward this vision. Enough practical activity can eventually
generate the impetus for state action to level the playing field for ecological alternatives.

Why a Green Economy?India is increasingly being looked at as a hub for research

and development for green solutions. This is due to its innovation in technology,
low-priced manufacturing and services, and traditional knowledge and
processes. India has the world’s third largest pool of scientists and engineers and has
instilled confidence in the global market through its significant achievements in
information technology, professional services and communications in the past
decade. The past few years have seen a rise in green innovation and increasing
amounts of venture capital is flowing in, with India being rated as the third most
attractive country for renewable energy investment.  The transition has begun. Indian

industry and MNCs have already started looking at corporate environmental

impact, due to profitable opportunities, to avoid business risk, because of
international investment pressure and their own corporate social responsibility. If
India capitalises upon the potential of its green economy, not only would it
promote a more sustainable and cleaner environment, but the Indian economy
would see the generation of hundreds and thousands of downstream jobs. India is
in a unique position to create a low-carbon green economy. India is on high path
of growth. as it is yet to create a lot more infrastructure, services and jobs. It is
the choices of Indian business that will shape the outlook of the country; if they
choose to incorporate environmental sustainability into their business, although
immediate costs may be higher in some instances, they will sustain their business
economically. Furthermore, India can’t afford not to transition towards a green
economy. The Climate Disclosure Project says that the business as usual scenario
on climate change shows that by 2100 India’s GDP growth will be around negative
9-13% due to the impacts of climate change affecting business, livelihood and
hence the economy. Although 2100 is far away, this is not the path for any
aspiring superpower. The Indian economy and Indian business will have to
transform. Furthermore, consumers and employees are becoming increasingly
conscious of environmental issues, which are starting to reflect in their purchases
leisure activities. Similarly venture capitalists and investors are becoming
conscious of the financial and business risk associated with carbon and
environmentally unfriendly practices, and hence are factoring these issues in
when making a business investment decision. Along with the change in
stakeholder behaviour, Indian business is quickly becoming involved in
international carbon markets. In a matter of years we will see this involvement
rapidly increase as India will be affected by a global climate agreement that will
put a price on carbon that will affect businesses worldwide. This will pose both an
opportunity and threat: for businesses that start accounting for their
environmental impact and minimising their carbon emissions, there will be cash
to gain, for businesses that lag behind, there will be a price to pay. Finally shifting
to a greener economy creates opportunity for job creation in all sectors and all
companies, an opportunity to improve our education system to become more
practically focused to suit industry. To make this shift we will need to create jobs
in all sectors. Increasing environmental awareness is changing and increasing
legislation supporting the environment, which will mean increased environmental
litigation, lawyers and policy writers. Growth of global carbon markets will mean
increase carbon financial consultants, analysts, financiers, an increase in carbon
accountants, business risk analysts and more. A rise in green buildings and energy
efficiency is increasing the demand for architects, engineers, technicians,
plumbers, construction workers. And a shift towards renewable energy is
resulting in increased employment per kilowatt per hour of energy produced
when compared to fossil fuel energy, not only in large commercial plants but also
in rural villages allowing for decentralised renewable energy systems. There are
just a few sectors and jobs out of the hundreds of jobs that will be transformed
and created. At Green Economy India we aim to facilitate Greenjobs, Green
education, promote green businesses, and provide training and consulting on the
Indian green economy and leadership. 
Renewable energy in India Posted by Sagar Gubbi

[Editor's Note]: From this month onwards, Sagar Gubbi will be blogging once a month on
Green Miles, discussing various aspects of the growing renewable energy sector in India.
Welcome aboard, Sagar!

India’s rapid economic growth, when combined with its large population base, has resulted in
large-scale increase in energy consumption in recent years. This consumption is expected to
grow massively in the next few years as the economy continues to grow.
Energy generation, particularly power generation, has always lagged behind energy/power
demand in India, which is clearly visible in the regular power cuts that we all experience
everyday. As per June 2010 data from the Central Electricity Authority (CEA) of India,
power deficit (difference between demand and supply) was 9.4%, with national average
of peak demand deficit being as high as 12.7%!
India, being a net importer of oil and gas due to low internal reserves, faces the challenge
of ensuring energy security to fuel its economic growth. Indian coal reserve, though large in
volume, is typically of low quality which necessitates import of high quality coal.
In addition to all these, the issue of climate change has come under sharp focus among the
international community in recent years. With India featuring among the top 5 polluters in
the world in terms of absolute green house gas (GHG) emissions (though India is way
down the list in terms of per capita emissions), international pressure on India to reduce its
emissions has been growing over the last few years.
Thus, increased energy consumption, acute power shortage, a need to ensure energy security
and mitigate climate change has forced the Government of India to encourage renewable
energy sources in recent years. This blog explores various aspects of the renewable energy
industry in India, including a landscape of policy incentives for renewable energy in the
country.

Here’s a quick overview of the present Indian renewable energy scenario:

• India is among the top 5 countries in the world in terms of energy consumption and
generation
• Coal and oil are the two most widely used sources of energy in India, with natural gas,
hydro and nuclear sources being far behind. Coal and oil are likely to remain the major
energy sources in India even in 2030, though the share of natural gas, hydro and nuclear (and
hopefully renewable sources) is projected to increase.
• As per data from the Central Electricity Authority (CEA) and the Ministry of New and
Renewable Energy (MNRE), India’s total installed grid-connected power generation
capacity stands at over 162,000 MW as of June 2010 and the power generation portfolio is
again dominated by thermal sources (coal, oil and gas, with a combined share of more than
64%), though large dam-based hydro and renewable sources (wind, small hydro, biomass,
solar etc) contribute about 23% and 10% respectively. This electricity generation portfolio is
as shown in the chart below:
• India’s total installed grid-connected renewable energy generation capacity stands at nearly
15,700 MW as of December 2009, with wind energy contributing about 70%, followed by
small hydro (run of the river projects of capacity less than 25 MW) and biomass/co-
generation, as shown in the figure below. This installed renewable capacity is the fifth
largest in the world, if large dam-based hydro power capacity is not considered under
renewables.

• India also has nearly 950 MW of off-grid and captive renewable energy generation
capacity, which includes about 320 MW of biomass/co-generation capacity, about 375 MW
of captive wind generation capacity, about 100 MW equivalent of off-grid solar capacity
(both solar PV and solar thermal) and about 110 MW of captive small hydro generation
capacity.

• As per the MNRE, India has a total potential of about 88,000 MW for power generation
from different renewable energy sources (excluding solar), which includes 48,500 MW of
wind power, 15,000 MW of small hydro power and 24,581 MW of biomass, co-generation
and waste-to-energy power. However, this potential is largely under-utilised, as summarised
below:

Renewable energy potential in India

Estimated Installed capacity
Sources/Systems
Potential (MW) (MW) in 2009
Biomass power (agro
16,881 834.5
residues)
Wind power 48,500 10925
Small hydro power
15,000 2558.92
(upto 25 MW)
Co-generation (bagasse) 5,000 1302
Waste-to-energy 2,700 65.01
Total 88,081 15691.43
 

• In addition, the potential for solar energy in India is large - our total solar energy
potential should add up to a minimum of 657,000 MW! However, as of December 2009, only
about 6 MW of grid-connected solar capacity has been installed, in addition to an estimated
100 MW of off-grid solar capacity.

• Government support for renewable energy deployment, in the form of fiscal, regulatory
and policy support has been very encouraging in the last few years. Government policy
incentives include preferential feed-in tariffs, generation-based incentives, low-cost loans and
capital cost subsidies for grid-connected renewable energy projects.

• The Jawaharlal Nehru National Solar Mission (JNNSM) announced in November 2009,
provides a whole range of policy incentives for Solar PV and Solar Thermal installations
in India
• Similar policy support exists for Wind, Small Hydro and Biomass/Co-generation
projects in both grid-connected and off-grid segments, with several states offering attractive
tariffs for these technologies.
• The Renewable Portfolio Standards (RPS) regime, which mandates state-owned
distribution companies to purchase a certain amount of renewable electricity as a share of
overall electricity purchase, provides further encouragement for renewable energy
installation. The RPS regime will be complemented by Renewable Energy Certificate (REC)
trading model which is expected to go live by the end of 2010.
• The Government has also proposed to setup a National Clean Energy Fund as part of
Union Budget 2010-11. The fund will support research and innovative projects in clean
energy technology areas and is also expected to finance a portion of the budget for National
Solar Mission. It is proposed that this fund will be raised by levying a clean energy cess on
coal at a rate of INR 50 per tonne.
• International climate change mitigation policies/financing mechanisms such as the Kyoto
Protocol’s Clean Development Mechanism (CDM), which created a carbon credit trading
market, along with voluntary carbon markets, have also been well utilised well by Indian
renewable energy project developers, which is demonstrated by the fact that India is the
largest source of voluntary carbon credits and second largest source of CDM carbon
credits in the world.

The next posts on this blog will explore each of these aspects, in addition to several others, in
detail, with an intention to identify business opportunities in the sector, which holds a lot of
promise for the future.
Why a Green Economy? India is increasingly being looked at as a hub for research and development
for green solutions. This is due to its innovation in technology, low-priced manufacturing and
services, and traditional knowledge and processes. India has the world’s third largest pool of
scientists and engineers and has instilled confidence in the global market through its significant
achievements in information technology, professional services and communications in the past
decade. The past few years have seen a rise in green innovation and increasing amounts of venture
capital is flowing in, with India being rated as the third most attractive country for renewable energy
investment. The transition has begun. Indian industry and MNCs have already started looking at
corporate environmental impact, due to profitable opportunities, to avoid business risk, because of
international investment pressure and their own corporate social responsibility.   If India capitalises
upon the potential of its green economy, not only would it promote a more sustainable and cleaner
environment, but the Indian economy would see the generation of hundreds and thousands of
downstream jobs. India is in a unique position to create a low-carbon green economy. India is on
high path of growth. as it is yet to create a lot more infrastructure, services and jobs. It is the choices
of Indian business that will shape the outlook of the country; if they choose to incorporate
environmental sustainability into their business, although immediate costs may be higher in some
instances, they will sustain their business economically.   Furthermore, India can’t afford not to
transition towards a green economy. The Climate Disclosure Project says that the business as usual
scenario on climate change shows that by 2100 India’s GDP growth will be around negative 9-13%
due to the impacts of climate change affecting business, livelihood and hence the economy.
Although 2100 is far away, this is not the path for any aspiring superpower. The Indian economy and
Indian business will have to transform. Furthermore, consumers and employees are becoming
increasingly conscious of environmental issues, which are starting to reflect in their purchases
leisure activities. Similarly venture capitalists and investors are becoming conscious of the financial
and business risk associated with carbon and environmentally unfriendly practices, and hence are
factoring these issues in when making a business investment decision.   Along with the change in
stakeholder behaviour, Indian business is quickly becoming involved in international carbon markets.
In a matter of years we will see this involvement rapidly increase as India will be affected by a global
climate agreement that will put a price on carbon that will affect businesses worldwide. This will
pose both an opportunity and threat: for businesses that start accounting for their environmental
impact and minimising their carbon emissions, there will be cash to gain, for businesses that lag
behind, there will be a price to pay.   Finally shifting to a greener economy creates opportunity for
job creation in all sectors and all companies, an opportunity to improve our education system to
become more practically focused to suit industry. To make this shift we will need to create jobs in all
sectors. Increasing environmental awareness is changing and increasing legislation supporting the
environment, which will mean increased environmental litigation, lawyers and policy writers.
Growth of global carbon markets will mean increase carbon financial consultants, analysts,
financiers, an increase in carbon accountants, business risk analysts and more. A rise in green
buildings and energy efficiency is increasing the demand for architects, engineers, technicians,
plumbers, construction workers. And a shift towards renewable energy is resulting in increased
employment per kilowatt per hour of energy produced when compared to fossil fuel energy, not
only in large commercial plants but also in rural villages allowing for decentralised renewable energy
systems. There are just a few sectors and jobs out of the hundreds of jobs that will be transformed
and created.   At Green Economy India we aim to facilitate Greenjobs, Green education, promote
green businesses, and provide training and consulting on the Indian green economy and leadership.
Green economy can create nine lakh jobs in India
By   IANS
Monday, 06 October 2008, 09:26 IST  

New Delhi:The global market for environmental products and services is projected to double
from $1.37 trillion per year at present to $2.74 trillion by 2020, creating millions of new
"green jobs", says a recent report commissioned by a number of UN organisations.

India can generate 900,000 jobs by 2025 in the area of biogas alone. Of these, 300,000 would
be in the manufacturing of stoves and 600,000 in areas such as processing into briquettes and
pellets and the fuel supply chain, says the report.

Called 'Green Jobs: Towards Decent work in a Sustainable, Low-Carbon World', the report
was commissioned by the UN Environment Programme (UNEP) under a joint Green Jobs
Initiative with the International Labour Office (ILO), the International Trade Union
Confederation (ITUC) and the International Organization of Employers (IOE). The
Worldwatch Institute produced it with technical assistance from the Cornell University
Global Labour Institute.

However, the report also finds that the process of climate change, already underway, will
continue to have negative effects on workers and their families, especially those whose
livelihoods depend on agriculture and tourism.

The report says too few green jobs are being created for the most vulnerable: the 1.3 billion
working poor (43 percent of the global workforce) in the world with earnings too low to lift
them and their dependants above the poverty threshold of $2 per person, per day, or for the
estimated 500 million youth who will be seeking work over the next 10 years.

The authors of the report say that climate change, adaptation to it and efforts to arrest it by
reducing emissions have far-reaching implications for economic and social development, for
production and consumption patterns and thus for employment, incomes and poverty
reduction.

Other key findings of the report include:

* The global market for environmental products and services is projected to double from
$1.37 trillion per year at present to $2.74 trillion by 2020.

* Half of this market is in energy efficiency and the balance in sustainable transport, water
supply, sanitation and waste management. In Germany, for example, environmental
technology is to grow fourfold to 16 percent of industrial output by 2030, with employment
in this sector surpassing that in the country's big machine tool and automotive industries.

* Sectors that will be particularly important in terms of their environmental, economic and
employment impact are energy supply, in particular renewable energy, buildings and
construction, transportation, basic industries, agriculture and forestry.
* Clean technologies are already the third largest sector for venture capital after information
and biotechnology in the US, while green venture capital in China more than doubled to 19
percent of total investment in recent years.

* 2.3 million people have in recent years found new jobs in the renewable energy sector
alone, and the potential for job growth in the sector is huge. Employment in alternative
energies may rise to 2.1 million in wind and 6.3 million in solar power by 2030.

* Renewable energy generates more jobs than employment in fossil fuels. Projected
investments of $630 billion by 2030 would translate into at least 20 million additional jobs in
the renewable energy sector.

* In agriculture, 12 million could be employed in biomass for energy and related industries.
In a country like Venezuela, an ethanol blend of 10 percent in fuels might provide one
million jobs in the sugarcane sector by 2012.

* A worldwide transition to energy-efficient buildings would create millions of jobs, as well

as "greening" existing employment for many of the estimated 111 million people already
working in the construction sector.

* Investments in improved energy efficiency in buildings could generate an additional 2-3.5

million green jobs in Europe and the US alone, with the potential much higher in developing
countries.

* Recycling and waste management employ an estimated 10 million in China and 500,000 in
Brazil today. This sector is expected to grow rapidly in many countries in the face of
escalating commodity prices.

Why India needs to move to a green future

Rediff Business Desk

Global warming is too serious a problem to just discuss or debate on. Some really well-
orchestrated steps are required to counter the threat.

As nature's fury constantly threatens to destroy the technology-driven modern world, people
and organisations in India and abroad opt for measures to make this world a greener place to
live in.

Global warming: The dangers it poses

In 1986, a panel of 150 scientists from 11 countries issued a report warning that human
activities such as automobile use, the production of energy from burning fossil fuels, and
deforestation could cause global temperatures to rise by intensifying the earth's greenhouse
effect.

An essential component of the earth's climate, the greenhouse effect is the warming process
that results from the atmospheric presence of heat-trapping gases such as water vapor, carbon
dioxide, and nitrous oxide. Much of the solar energy that reaches the planet is absorbed by
oceans and land masses, which in turn radiate the energy back into space.

However, small concentrations of water vapor and other 'greenhouse gases' convert some of
this energy to heat and either retain it or reflect it back to the earth's surface. This 'trapped'
energy creates a blanket of warm air around the earth that moderates global temperatures and
climate patterns. Without greenhouse gases, the earth would exist in a perpetual ice age.

In 1995, the Intergovernmental Panel on Climate Change, a United Nations subcommittee,

asserted that human activities were partly responsible for rising global temperatures.

In its ensuing assessment reports, the IPCC also predicted that carbon dioxide levels could
double by the year 2100, causing temperatures to increase from 2 to 10.4 degrees F.

Such a temperature change would likely bring a greater incidence of floods, droughts, heat
waves, wildfires, hurricanes, and other forms of extreme weather -- which in turn could cause
an increase in storm-related deaths, infectious diseases, and economic crises, analysts
warned.

The weather of the 1990s -- the hottest decade on record -- and also of the first eight years of
2000s seemed to bear these warnings out.

Global warming threatens even the world's most biologically diverse natural areas, according
to a new report, Habitats at Risk: Global Warming and Species Loss in Globally Significant
Terrestrial Ecosystems, from WWF.

This report is the first to look specifically at how global warming in the coming decades
could impact our most treasured natural habitats -- outstanding areas still rich in species and
biological distinctiveness.

It examines 113 land-based regions of significant size and vegetative surface and finds that
huge parts of the world, from the tropics to the poles are at risk.

The report also finds that as global warming changes their habitat, many species will be
unable to move to new areas fast enough to survive, raising the possibility of a 'catastrophic'
loss of species in one-fifth of the world's most vulnerable nature areas.

dia's plans: Why are they important

India's plans to combat climate change have been keenly awaited around the world as many
industrialised countries have said they will not commit themselves to reducing their
greenhouse gas emissions if India and China do not do so.

The National Action Plan on Climate Change released by Prime Minister Manmohan Singh
in New Delhi last year consisted of eight national missions.

They are on solar energy, enhanced energy efficiency, sustainable habitat, water
conservation, sustaining the Himalayan ecosystem, creating a 'green India' through a large
tree-planting programme, sustainable agriculture and establishing a knowledge platform on
climate change.

That India will put solar energy generation at the forefront of its battle against climate
change became evident with Prime Minister Manmohan Singh releasing the National Action
Plan on Climate Change in New Delhi last year.

The plan consisted of eight national missions. They are on solar energy, enhanced energy
efficiency, sustainable habitat, water conservation, sustaining the Himalayan ecosystem,
creating a 'green India' through a large tree-planting programme, sustainable agriculture and
establishing a knowledge platform on climate change.

India's plan to combat climate change has been keenly awaited around the world as many
industrialised countries have said they will not commit themselves to reducing their
greenhouse gas emissions if India and China do not do so.

According to the prime minister, success in developing solar energy 'will change the face of
India. It would also enable India to help change the destinies of people around the world. The
plan intends to go beyond government to draw upon these assets'.

Plan to develop solar cities announced

Indian government announced recently that it was planning to develop solar cities to reduce
about 10 per cent usage of conventional energy sources through renewable energy
installations and energy efficiency.

During the 11th Plan period, a total of 60 cities are proposed to be developed as solar cities,
based on a model already practised in New York in the United States, Tokyo in Japan, and
London in Britain.

Along with these Western countries, India too targets a 10 to 20 per cent carbon emission
reduction in the next 10 to 20 years.

India, where most regions enjoy nearly 300 sunny days a year, is an ideal market for solar
power companies. However, the high cost of light-to-electricity conversion -- at Rs 12 to Rs
20 per kWh (kilowatt-hour) -- has acted as a deterrent so far.

The government scheme

Under the government's solar city scheme, each of the 60 urban local governments would be
provided a total of Rs 50 lakh (Rs 5 million) assistance of which Rs 10 lakh (Rs 1 million)
would be for preparation of a master plan, Rs 10 lakh (Rs 1 million) for setting up a solar cell
in the city council, Rs 10 lakh (Rs 1 million) for implementation of the plan over five years
and the remaining Rs 20 lakh (Rs 2 million) for other promotional activities.

A target of 50 MW has been set for solar power generation during the 11th Plan, which is
likely to be achieved. India receives solar energy equivalent to over 5,000 trillion kilowatt
hour per year.

Currently, India has about 60 companies assembling and supplying solar photovoltaic
systems, nine companies manufacturing solar cells and 19 companies manufacturing
photovoltaic modules or panels, according to an Indian Semiconductor Association study.

Nagpur to be the first solar city

In February 2009, government announced that Nagpur in Maharashtra will be developed as

India's first solar city.

Nagpur, the 'Orange City', will become a model solar city by 2012, deriving up to 10 per cent
of its energy consumption through renewable energy sources and implementing other energy
efficiency measures, a government statement said.

The city can also opt for additional funding from the ministry if the project cost goes beyond
the estimates.

Solar energy systems, including street lights, garden lights, traffic lights, hoardings and solar
water heaters will be installed in the city. Energy efficient 'green buildings' will be promoted
on a large scale.

What does the ministry have to say

According to New and Renewable Energy Minister Farooq Abdullah, his ministry is
implementing a programme on development of solar cities aimed at reducing minimum of 10
per cent of the projected demand of conventional energy of the city through energy efficiency
measures and renewable energy installations.

Abdullah had said the centre was providing financial support up to Rs 50 lakh (Rs 5 million)
for each solar city to the respective state governments for preparation of a master plan,
awareness generation and capacity building activities.

He added that his ministry has been implementing an interest subsidy scheme for many years
to provide soft loans to users of solar water heaters through banks and other financial
institutions.

The programme also aims at including the proposals for carbon financing.

Gurgaon and Faridabad to go solar as well

 The Haryana government has decided to develop Gurgaon and Faridabad as solar/green
cities, State Chief Minister Bhupinder Singh Hooda said recently.

These will be the first cities in Haryana to be brought under the Development of Solar Cities
Programme.

The objective was to enable and empower the urban local governments to meet the energy
challenges, reduce their dependence on fossil fuel, expensive oil and gas for energy and also
to promote increased use of renewable energy, Hooda said.

"The state government would be assisted in preparation of a master plan for increasing
energy efficiency and renewable energy supply in these cities besides having in place
institutional arrangements for implementation of the master plan," Hooda added.

Financial assistance from the Centre

According to Hooda, the Centre would provide financial assistance of Rs 48 lakh (Rs 4.8
million) each for development of Gurgaon and Faridabad as solar/green cities.

Out of this, Rs 800,000 will be provided for preparation of the master plan, Rs 10 lakh (Rs 1
million) each for setting up the solar cell, its functioning and for implementation over five
years while Rs 20 lakh (Rs 2 million) for other promotional activities.

India – A model green economy?

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December 29, 2010

India is not a country that immediately springs to mind when you think of Green Economics,
indeed when you look at the figures you notice that, as a country it is the third worst CO2
emission polluter at 5.5% of the world total. The US is second by the way at 19.9% closely behind
China at 22.3% but these figures do not do India or indeed China justice.  The US has a
population a third the size of India and a quarter the size of China but it still manages to
contribute 20% of the world CO2 emissions.

But back to India, admittedly it produces 5% of the world CO2 emissions and everybody knows
that the Indian economy continues to grow apace (8% in 2009-2010) with an estimated 9-10%
growth for 2011-2012.  True too that we all expect, with the continued economic growth, and the
huge population the CO2 emissions is likely to increase markedly as greater wealth spearheads an
ever increasing middle class with an insatiable appetite for commodities and goods known
previously only to the hugely wealthy.

Yes, India is starting to build up a momentum, cycles were replaced by scooters, which are now
being replaced by cars and with those cars comes the increased CO2 that the world fears.  But
India has another side too, it is a recycle paradise.  Nothing is wasted, packaging is minimised to
reduce cost, where it is essential it is re-used or recycled and re-sold.

The population, and large number of people at or below the poverty line has forced the Indian
people to be frugal, and it is this frugality that is part of the culture which is helping to drive the
economy forward whilst minimising the impact on the environment.
For example, in 2009, Tata introduced the Nano, a small family car a little smaller than a mini,
retail cost less than £1,200 well within the budget of many Indian middle class families.  Sure,
the economic impact of 1bn Nano’s would be catastrophic but the Indian infrastructure would not
allow that to happen so the increased car population is controlled, in this case by density, you can
only get so many vehicles onto the cities roads.
The Nano is not alone, from the redesign of hospital equipment able to run on non-lithium
batteries thereby reducing cost (and pollution) to innovative ideas to link a mobile phone to a TV
to give Indians access to the internet, the change goes on.

India is innovating, but not in a way that the west would truly understand, it is innovating to
accommodate the needs of it’s people with limited existing resources.

No, India is not a Model Green Economy, far from it but for a country with 1bn people it is
definitely utilising it’s resources to the best effect, something that cannot be said for those of us in
the west.

So if you are a company seeking to break into the Indian economy you can go on of two ways, sell
expensive western goods at western prices to the Indian middle classes or you can do something
more lasting, and rewarding (not just financially but ecologically and more importantly socially)
you could consider delivering products to the poorer sector, build them cheap, from re-usable
and sustainable sources at cheap prices.