Sunday, March 14, 2010

India's Coal Tax Proposal

One wouldn’t expect a country facing energy deficits equivalent to 8% of primary energy demand in proportion to the growth of Gross Domestic Product (GDP) to formulate energy policies that promote anything other than cheap abundant sources of fuel – whatever their source. india wires India however, which faces chronic power shortages in nearly every city tied to the grid – not to mention the over 412 million inhabitants who lack electricity all together – has proposed a $1 levy on every ton of coal   – both imports and exports – in order to fund a national clean energy fund.  
The significance of this proposal goes far beyond its ability to raise revenue, or discourage the use of coal. It is yet another example of an increasingly progressive stance on developing clean energy that shows leadership on climate that is sorely lacking in today’s geo politics of climate change.

From developing significant wind resources - despite the fact the country has a small fraction of the potential   of other large emitters like the United States or China - to creating special economic zones for solar PV   manufacturing and distribution, the country is reorienting itself to be a leader in the coming green revolution.

Similar efforts in the United States for reasonable, sensible, and pragmatic policies such as this are immediately met with chants of drill baby drill, and cries of righteous indignation that environmentalists want Americans to live like Europeans – oh the horror! If any nation should be demanding a tax on fuels that are ruining our health, destroying our climate, and miring us in technologies of the past it should be the United States which is hemorrhaging jobs, while still reeling from the Great Recession (which by the way rapidly industrializing nations have already emerged from quite well  ).

Of course the United States and India face entirely different challenges in terms of their development, economies and cultures. But it’s time for American environmentalists to take a step back and reevaluate how India - a country where 412 million people lack electricity - was able to convince its politicians of the opportunity to be found in the enormity of the challenge climate change poses. This lesson is crucial to our struggle against polluting industries and efforts to save the planet.

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