The government is putting the “polluter pays” principle into practice. The National Clean Energy Fund announced in this year’s budget will be financed by an older, not-so-clean source of energy — coal.

Both Indian and imported coal will be taxed at the rate of Rs. 50 per tonne. The revenue from this clean energy cess will build up the corpus of the Fund, which will sponsor research and innovative projects in clean energy technology, which would help combat climate change.

The sums of money being allocated to the environment sector have increased this budget season, with Rs. 15,000 crore being earmarked for grants-in-aid to States in the 13th Finance Commission Report.

The money will be split equally among three projects over the next five years: to protect forests, to incentivise the generation of grid electricity from renewable energy sources, and to encourage maintenance of irrigation networks and an independent regulatory mechanism for the water sector.

The budget has doubled the annual funding for the National Ganga River Basin Authority to Rs. 500 crore.

Goa, celebrating its golden jubilee this year, will get a special package of Rs.200 crore to preserve its natural resources by restoring erosion-prone beaches and increasing green cover through sustainable forestry.

Other budget initiatives to encourage green energy include tax and duty reductions on the machinery and equipment needed for solar, geo-thermal and wind energy technologies. The excise duty on LED lights has been halved, while concessions have been given to electric car makers.

The Council of Scientific and Industrial Research’s innovative “soleckshaw,” a solar battery-powered rickshaw, is also being given duty concessions. The Ministry of New and Renewable Energy has also got a 61 per cent hike in allocations.

Environmentalists have welcomed these steps, but point out that the two per cent excise duty hike on big cars and SUVs are not enough to control the increasing number of oil-guzzlers. Noting the failure to cut the excise duty on buses and increase it on diesel vehicles, the Centre for Science and Environment (CSE) said the “failure to incentivise public transport might prove to be costly for our already highly congested cities.”

To check pollution at the Tirupur knitwear textile cluster, Tamil Nadu will get a one-time grant of Rs. 200 crore to install a zero-liquid discharge system.

However, the CSE also points out that Tirupur is only one of the 75 critically polluted areas identified by the Ministry of Environment and Forests in January 2010.

In a move to prepare the farm sector for climate change impacts, the budget includes a Rs. 200 crore allocation for a Climate Resilient Agriculture initiative.

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