vagyakartha

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 stormtrooperism. A well designed set of disincentives, incentives and promotional projects holds far greater promise, I believe.

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 light, they waste most of the input energy in generating heat. 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. No amount of diving into that vast ocean of all knowledge, the internet, could reveal the number of ILBs installed in these states. So, let me rashly assume that it is 200 million. Let me further assume that the average wattage of these bulbs is sixty and that they are on for an average of 2.5 hours a day. This gives an annual energy consumption of 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% load factor and 10% 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 crores and will emit about eleven million tons of CO2 (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: CO2 – 80%, CO – 50%, SO2 – 100%, hydrocarbons – 93%, and particulates – 30%. Smog causing NOx emissions, however, are 13% higher. 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.

[$ = Rs 41, Crore = 10 million, Rs 1 crore = $ 243,900]

This methodology is inappropriate for India. The three southern states together have over twelve million hectares of land classified as fallow or uncultivable. This land lies fallow solely because it has no economic utility whatsoever. 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% 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 seedcake left over is a nitrogen rich organic fertilizer that is worth 50% more than the cost of crushing. 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 (eliminating firewood, the kitchen fuel in over 50% of Indian households) and in slightly modified tractor and pump-set engines.

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 3,000 a month in these three states. Rural households in the bottom half of the economic ladder spend way less than that. Expenditure generally exceeds income in these Micawberian households. This suggests that Rs 3,000 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. With two hectares, the family will be comfortable even at a crude oil price of $40 a barrel. With such economics, a veritable jatropha rush is likely. No wonder Reliance is keen.

Bulbs and Biodiesel
We can now link the two issues. Or rather, southern CMs can, if they are willing to don green shawls. They can launch programs structured along the following lines.

Make ILB Unattractive and 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. The energy tax, Rs 15 for a 60 w bulb, will reduce the payback period to ten months. This should wean people away from ILB within about six years. As they 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 explaining their economic and environmental benefits.

Nudge CFL manufacturers to lower their prices as volumes increase and to produce lamps emitting warmer light.

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.

Fund the Promotion of Jatropha Planting and Biodiesel Production & Use:

In consultation with agricultural experts, 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 subsidized 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% biodiesel (B100) or jatropha oil.

Have the above technical committee choose the two best car, commercial vehicle, tractor and agricultural pump-set diesel engines – based on fuel efficiency, emissions & reliability. Publicize the winners, as above.

Convert all government owned vehicles – metro and state transport buses, cargo vehicles, cars, etc. – to B100. Have the railways do the same (locomotives on the Delhi-Mumbai line already use a jatropha diesel blend).

Partly subsidize the conversion of all electric agricultural pump-sets to jatropha oil. Rapidly phase out free electricity, if any, for agricultural pump-sets.

Set ad valorem tax rates for biodiesel well below those for petro-diesel.

Work Through International Agencies to Earn Carbon Credits for the Above Programs:

The price of carbon credits, which are actively traded in Europe, has fluctuated widely due to gross mismanagement by the EU. It should stabilize before too long, perhaps at levels around fifteen to twenty euros per ton of CO2 equivalent. If it does, potential earnings are enormous.

If the three states do all of the above effectively and expeditiously, the benefits will be:

· Enough biodiesel to fuel the equivalent of two million cars.
· A dramatic reduction in emissions of greenhouse gases and other pollutants, driven by economically sensible programs (unlike America’s crazy corn-ethanol program).
· 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.
· Reduction in respiratory ailments in urban areas.
· Reduction of over $750 million in our annual oil import bill.
· A large, economically sound, public-private program that can employ socially inclined graduates from our better universities and institutes.

Sounds a whole lot better than a ban to me. What do you say, chief ministers?

Labels: Global Warming, India

# posted by Vagyakartha : 9:25 AM