The green signal Friday :Bala Ganesan
A few days back, I was invited to sign Greenpeace’s petition to ‘‘Ban the Bulb’’. I declined, despite subscribing wholeheartedly to their goal. Banning incandescent light bulbs (ILBs) seemed like a ham-fisted approach, smacking of self-righteous storm-trooperism. A well-designed set of disincentives, incentives and promotional projects holds far greater promise. Before getting to those, we should understand why ILBs are worse than compact fluorescent lamps (CFLs). ILBs use about five times as much electricity as CFLs to produce a given amount of light. Further, they are said to last only about a tenth as long as CFLs. On the other hand, CFLs emit bluish light and contain tiny amounts of mercury, requiring careful disposal.
Let us consider what all this may mean for the states in the rain shadow of the Western Ghats. The estimated population of Andhra Pradesh, Karnataka and Tamil Nadu in 2007 is about 200 million. The internet could reveal the number of ILBs installed in these states – let me assume that it is 200 million. If the average wattage of these bulbs is 60 and they are on for an average of 2.5 hours a day, the annual energy consumption is almost eleven million megawatt-hours. Were all these ILBs to be replaced with equally bright CFLs, annual power consumption would drop by almost nine million MWH. That is the net delivered power (assuming 70 per cent load factor and 10 per cent technical transmission losses) from a coal-fired power plant with a name-plate capacity of 1,600 MW. Such a plant costs about Rs 7,000 crore and will emit about eleven million tons of carbon dioxide (plus other nasties) annually, as much as five million diesel engine cars (1300-1500cc engine).
Biodiesel: This brings us to biodiesel, much talked about these days. Relative to petro-diesel, the reductions in emissions with biodiesel are: carbon dioxide 80 per cent, carbon monoxide 50 per cent, sulfur dioxide 100 per cent, hydrocarbons 93 per cent, and particulates 30 per cent. Western analysts are concerned that this clean fuel will not be competitive without subsidies. They determine the cost of biodiesel by starting with the cost of vegetable oils, soy or palm, build up to a plant-gate cost (over Rs 40/litre) and compare that, unfavourably, to the wholesale price of diesel. This methodology is inappropriate for India. The three southern states together have over twelve million hectares of land classified as fallow or uncultivable. Jatropha Curcas is a robust, inedible plant. It is native to India and has long been used as natural rural fencing. It is not otherwise cultivated, since it has low economic value. But, it thrives in areas receiving just 600 mm of annual rainfall, with scant tending, enriching the soil on which it grows. Its seeds contain over 35 per cent oil, which can be expressed through manual or simple mechanical means. This oil can be refined into biodiesel at less than Rs 5/litre. The resulting net production cost of biodiesel is about Rs 3.50 per litre. Unrefined oil can be used as a clean burning fuel in rural households. The relevant question in India is whether the value of jatropha oil, netted back from the wholesale price of diesel, will be enough to attract poor rural families to jatropha plantations. The answer is a resounding yes. Based on government surveys, the current consumption expenditure per land-owning farm household averages Rs 3000 a month in these three states. This suggests that Rs 3000 a month should look highly attractive to the poorest rural families. A hectare of jatropha will, agriculturists estimate, yield around 2,700 litres of jatropha oil annually. So, jatropha diesel will be deemed sustaining at Rs 15/litre and munificent at Rs 20/litre by a family owning a one-hectare plantation. We can now link the two issues, Bulbs and Biodiesel. Rather, the Southern states can, if they are willing to don green shawls. They can launch programs structured along the following lines: Make ILB Unattractive, CFL Attractive Impose an energy tax of 25 paise per watt on ILB. Double the tax to 50 paise after four years. CFLs are economically attractive despite their higher prices. With electricity tariffs of Rs 3/kwh, even a Rs 120 CFL pays for itself in a year and will last years longer. As people switch into higher priced CFLs, VAT revenue will increase.
The increased revenue from the energy tax and incremental VAT should amount to more than Rs 500 crores over about six years for the three states combined. Promote CFLs through advertising campaigns Constitute a technical committee with members from leading technical institutions to select the best three CFL brands each year, based on lumens/watt, price and warmth of light. In partnership with media, give wide publicity to the winners. Promote Jatropha Planting Identify one million hectares, in large clusters, of fallow land for planting jatropha. Establish public-private institutions in each state (major oil companies are probable partners) to finance the purchase of this land by landless farm labourers, at two hectares per nuclear family. These institutions could retain a minority revenue interest in the land for a decade or more. Through these institutions, provide subsidised jatropha seedlings (2,500 per hectare) and help finance small-scale jatropha oil mills. Champion the production of vehicle engines and agricultural pump-sets using 100 per cent biodiesel (B100) or jatropha oil. Have the above technical committee choose the two best cars, commercial vehicle, tractor and agricultural pump-set diesel engines, based on fuel efficiency, emissions and reliability. Convert all government owned vehicles to B100. Have the railways do the same (locomotives on the Delhi-Mumbai line already use a jatropha diesel blend). Partly subsidise the conversion of all electric agricultural pump-sets to jatropha oil. Set ad valorem tax rates for biodiesel below those for petro-diesel. Earn carbon credits The price of carbon credits, which are actively traded in Europe, have fluctuated widely due to gross mismanagement by the EU. They should stabilise before too long, perhaps at levels around fifteen to twenty euros per tonne of CO2 equivalent. If they do, potential earnings are enormous. If the three states do all of the above effectively and expeditiously, the benefits will include enough biodiesel to fuel the equivalent of two million cars, a dramatic reduction in emissions of greenhouse gases, land ownership and a lower-middle-income standard of living for over 500,000 desperately poor families, creation of thousands of small-scale industrial units in poorer rural districts, and reduction in respiratory ailments in urban areas.
There will also be a reduction of over US$750 million in our annual oil import bill and an economically sound, public-private program that can employ socially inclined graduates. Sounds a whole lot better than a ban. What do you think, chief ministers?
Let us consider what all this may mean for the states in the rain shadow of the Western Ghats. The estimated population of Andhra Pradesh, Karnataka and Tamil Nadu in 2007 is about 200 million. The internet could reveal the number of ILBs installed in these states – let me assume that it is 200 million. If the average wattage of these bulbs is 60 and they are on for an average of 2.5 hours a day, the annual energy consumption is almost eleven million megawatt-hours. Were all these ILBs to be replaced with equally bright CFLs, annual power consumption would drop by almost nine million MWH. That is the net delivered power (assuming 70 per cent load factor and 10 per cent technical transmission losses) from a coal-fired power plant with a name-plate capacity of 1,600 MW. Such a plant costs about Rs 7,000 crore and will emit about eleven million tons of carbon dioxide (plus other nasties) annually, as much as five million diesel engine cars (1300-1500cc engine).
Biodiesel: This brings us to biodiesel, much talked about these days. Relative to petro-diesel, the reductions in emissions with biodiesel are: carbon dioxide 80 per cent, carbon monoxide 50 per cent, sulfur dioxide 100 per cent, hydrocarbons 93 per cent, and particulates 30 per cent. Western analysts are concerned that this clean fuel will not be competitive without subsidies. They determine the cost of biodiesel by starting with the cost of vegetable oils, soy or palm, build up to a plant-gate cost (over Rs 40/litre) and compare that, unfavourably, to the wholesale price of diesel. This methodology is inappropriate for India. The three southern states together have over twelve million hectares of land classified as fallow or uncultivable. Jatropha Curcas is a robust, inedible plant. It is native to India and has long been used as natural rural fencing. It is not otherwise cultivated, since it has low economic value. But, it thrives in areas receiving just 600 mm of annual rainfall, with scant tending, enriching the soil on which it grows. Its seeds contain over 35 per cent oil, which can be expressed through manual or simple mechanical means. This oil can be refined into biodiesel at less than Rs 5/litre. The resulting net production cost of biodiesel is about Rs 3.50 per litre. Unrefined oil can be used as a clean burning fuel in rural households. The relevant question in India is whether the value of jatropha oil, netted back from the wholesale price of diesel, will be enough to attract poor rural families to jatropha plantations. The answer is a resounding yes. Based on government surveys, the current consumption expenditure per land-owning farm household averages Rs 3000 a month in these three states. This suggests that Rs 3000 a month should look highly attractive to the poorest rural families. A hectare of jatropha will, agriculturists estimate, yield around 2,700 litres of jatropha oil annually. So, jatropha diesel will be deemed sustaining at Rs 15/litre and munificent at Rs 20/litre by a family owning a one-hectare plantation. We can now link the two issues, Bulbs and Biodiesel. Rather, the Southern states can, if they are willing to don green shawls. They can launch programs structured along the following lines: Make ILB Unattractive, CFL Attractive Impose an energy tax of 25 paise per watt on ILB. Double the tax to 50 paise after four years. CFLs are economically attractive despite their higher prices. With electricity tariffs of Rs 3/kwh, even a Rs 120 CFL pays for itself in a year and will last years longer. As people switch into higher priced CFLs, VAT revenue will increase.
The increased revenue from the energy tax and incremental VAT should amount to more than Rs 500 crores over about six years for the three states combined. Promote CFLs through advertising campaigns Constitute a technical committee with members from leading technical institutions to select the best three CFL brands each year, based on lumens/watt, price and warmth of light. In partnership with media, give wide publicity to the winners. Promote Jatropha Planting Identify one million hectares, in large clusters, of fallow land for planting jatropha. Establish public-private institutions in each state (major oil companies are probable partners) to finance the purchase of this land by landless farm labourers, at two hectares per nuclear family. These institutions could retain a minority revenue interest in the land for a decade or more. Through these institutions, provide subsidised jatropha seedlings (2,500 per hectare) and help finance small-scale jatropha oil mills. Champion the production of vehicle engines and agricultural pump-sets using 100 per cent biodiesel (B100) or jatropha oil. Have the above technical committee choose the two best cars, commercial vehicle, tractor and agricultural pump-set diesel engines, based on fuel efficiency, emissions and reliability. Convert all government owned vehicles to B100. Have the railways do the same (locomotives on the Delhi-Mumbai line already use a jatropha diesel blend). Partly subsidise the conversion of all electric agricultural pump-sets to jatropha oil. Set ad valorem tax rates for biodiesel below those for petro-diesel. Earn carbon credits The price of carbon credits, which are actively traded in Europe, have fluctuated widely due to gross mismanagement by the EU. They should stabilise before too long, perhaps at levels around fifteen to twenty euros per tonne of CO2 equivalent. If they do, potential earnings are enormous. If the three states do all of the above effectively and expeditiously, the benefits will include enough biodiesel to fuel the equivalent of two million cars, a dramatic reduction in emissions of greenhouse gases, land ownership and a lower-middle-income standard of living for over 500,000 desperately poor families, creation of thousands of small-scale industrial units in poorer rural districts, and reduction in respiratory ailments in urban areas.
There will also be a reduction of over US$750 million in our annual oil import bill and an economically sound, public-private program that can employ socially inclined graduates. Sounds a whole lot better than a ban. What do you think, chief ministers?
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