Category: Environmental Studies

Conflict over scarce natural resources has been documented as an important source of armed struggle1. Billon2states, “the idea that wars are associated with resources is probably as old as war itself”. Climate change and the associated reduction in freshwater availability, worsening soil productivity, increase in weather volatility and heightened atmospheric warming are expected to aggravate the resource degradation that is already  underway3. The agricultural sector is likely to be extremely vulnerable to these changes through the impacts on agricultural yields, crop quality, and thereby, farm incomes4. However, the impact of climate change on productivity is not isolated to the agricultural sector. Recent literature also indicates a significant impact of (largely) temperature on productivity in the manufacturing sector too5,6. We focus on agriculture because in the  Indian context, agriculture and allied sectors (such as plantation, forestry, fishing, hunting etc.) alone employ nearly 58% of the workforce7. There is now a large literature in economics that examines how climate change induces violent conflict as well as protests by exacerbating competition over  scarce natural resources which affects economic growth, livelihoods, commodity prices, and political stability,8,9,10,11,12,13. Given the importance of the agricultural sector in India, this presents a serious governance challenge.   

In this article, we present a brief summary of the occurrences of environment and agriculture related conflicts in India using the Armed Conflict  Location and Event Data (ACLED). The ACLED is a rich source of information on different types of conflicts including protest events for many  countries around the world. It collects information on different types of events which include violent and non-violent conflicts, and peaceful protests  on issues as diverse as strategic developments, territorial conflicts, state-based violence, attacks on civilians, religious and ethnic/caste-based conflicts  as well as events which are centred around the issues of environment and agriculture. Of course, several event categories have significant overlap in  terms of the reasons for such conflict. A detailed event description is provided corresponding to each event along with the geographical location and  timing. For India, ACLED has recorded over 57000 events spanning across 592 districts starting from 2016 with weekly updates. We focus on the  time period from 2016-2019 and analyse the event descriptions of each observation to create a subset of events that are induced by environment or  agriculture related causes.  

According to our analysis, environmental conflict events in India can broadly be attributed to causes concerning environmental pollution and  degradation, extreme weather, use of common property resources such as land and water bodies, wildlife encroachment as well as issues related to  sanitation and disease. Of these, events concerning the use of water bodies such as rivers for irrigation and impacts of extreme weather events on  crop loss are directly related to agriculture. We further observe that all agricultural conflict events are closely linked to agricultural risks and the economic system’s ability to mitigate them. Agricultural risks result in uncertainty in farm incomes arising due to production risks (i.e., the low yields due to weather events, pest infestations etc.) and price risks (i.e., low prices due to uncertainty in the input and output markets). Conflicts (including  protests and demonstrations) concerning agricultural issues are largely on account of the demand for functional risk management tools by farmers  which include: 

1. Demand for subsidized institutional credit delivery and farm loan waivers to stabilize income in case of output and/or price shocks. 

2. Demand for timely release of crop insurance payments in case of low yields due to weather variations, pest infestation, animal attacks, etc. 

3. Demand for remunerative prices (mostly MSP) to provide protection from crop price volatility.  

4. Demand for water release from dams and rivers for irrigation in an effort to reduce dependence on rainfall and minimize the output risks due  to rainfall vagaries. 

Environmental/Agricultural Conflict Trends: 

Expectedly, over time we see a sharp rise in the absolute frequency of both environmental and agricultural conflict events in India. However, the  percentage of environmental and agricultural conflict events as a proportion of total conflict events, has consistently been ~12% and ~9%  respectively. On the other hand, the proportion of agricultural conflict events as a fraction of total environmental conflict events rose from ~42% in  2016 to ~47% in 2019. This is indicative of the increasing relative importance of agricultural conflict events within the larger set of environmental  conflict events. 

Figure 1: Data Source: ACLED 

Agriculture Related Conflict Events & Policy Tools for Risk Management:  

There are three main policy tools for farm-level risk mitigation in India: credit, insurance and minimum support price (MSP). While credit and  insurance aid in consumption smoothing in case of crop loss, MSP serves to stabilize income in case of a fall in prices. Credit can aid farm-level risk  management in two stages. Ex-ante, in case of no shock, it can facilitate: (a) adoption of climate resilient inputs and techniques (for e.g., purchase of  power and water for irrigation to reduce dependence on rainfall, purchase of seeds of more climate resilient crops etc.), and (b) increase in farm mechanization to reduce output risks. Ex-post, in case of a shock, credit and, importantly, insurance can fulfil immediate cash needs for input  stabilization and consumption smoothing14. However, historically, access to these risk mitigation tools is highly skewed in favour of richer, wealthier,  more educated farmers belonging to forward castes,15,16,17,18,19,20. This access inequality is a major cause for agriculture related conflict.   

We observe a positive correlation between the demand for agricultural risk management and agricultural conflict events, i.e., areas which are more  risk-prone and therefore have a greater demand for agricultural risk management, also have higher incidence of agriculture related conflicts. On  average, states with higher credit disbursal per agricultural household also have a higher proportion of agricultural conflicts by ~2.7 percent (Figure 2). Similarly, on average, states with higher insurance amounts disbursed per covered agricultural household, have a higher relative incidence of agriculture  related conflicts by ~5.7 percent (Figure 3).

Figure 2: Data Source: Directorate of Economics & Statistics, Ministry of Agriculture and Farmers’ Welfare (MoAFW), Government of India and ACLED 
Figure 3: Data Source: MoAFW, Government of India and ACLED 

These findings reflect the critical role that agricultural risks play in agricultural conflict incidence. As the frequency and extremity of adverse weather  events such as droughts and floods are likely to increase substantially due to climate change, it is important to develop effective and affordable risk  management tools which are also accessible to all sections of the farming community. In the absence of accessible climate adaptation strategies which  include (but are not limited to) efficient functioning of the system of farm credit and agricultural insurance; not only do we stand the risk of crop loss  and income loss for the farming community, but also the heightened risk of conflicts stemming from loss of livelihoods for farmers and declining  food security. 


StatePercentage of Agricultural Conflict EventsAgricultural Credit Disbursed (in INR crore)Number of Operational Holdings (OH) (in ‘000)Credit Disbursed/OH (in ‘000)Credit Disbursal Category (High/Low)*Insurance Claims (INR)Number of FarmersInsurance Amount Paid/Farmer InsuredInsurance Claims Categories (High/Low)**
Andhra Pradesh 5.19 92868.62 8524 108.95 High 9437700000 1778000 5308.04 High
Gujarat 8.63 54276.7 5321 102.00 High 12672200000 1980000 6400.10 High
Haryana 8.71 49481.07 1628 303.94 High 2969000000 1336000 2222.31 High
Karnataka 12.31 78082.72 8681 89.95 High 20668200000 2947000 7013.30 High
Kerala 2.69 67738.76 7583 89.33 High 437300000 77000 5679.22 High
Rajasthan 11.50 74303.86 7655 97.07 High 19173700000 9355000 2049.57 High
Tamil Nadu 7.76 132144.57 7938 166.47 High 36386600000 1463000 24871.22 High
Himachal Pradesh 5.38 6116.15 997 61.35 High 451800000 380000 1188.95 Low
Uttarakhand 1.62 6505.43 881 73.84 High 274700000 261000 1052.49 Low
Madhya Pradesh 12.47 56149.06 10003 56.13 Low 20438800000 7461000 2739.42 High
Odisha 7.46 21264.96 4866 43.70 Low 4327400000 1820000 2377.69 High
Bihar 1.52 26184.58 16413 15.95 Low 3478500000 2714000 1281.69 Low
Chhattisgarh 2.10 12237.42 4011 30.51 Low 1599700000 1549000 1032.73 Low
Jharkhand 0.97 4379.99 2803 15.63 Low 310900000 879000 353.70 Low
Maharashtra 7.75 81383.84 15285 53.24 Low 23187800000 11884000 1951.18 Low
Tripura 0.97 1513.13 573 26.41 Low 7100000 12000 591.67 Low
Uttar Pradesh 4.22 81584.01 23822 34.25 Low 5745800000 7289000 788.28 Low
West Bengal 0.41 34895.72 7243 48.18 Low 4216900000 4133000 1020.30 Low
*: Credit Disbursal/ Agricultural HH > Median implies Category = HIGH | Credit Disbursal/ Agricultural HH < Median implies Category = LOW **: Insurance Amount Paid/Covered HH > Median implies Category = HIGH | Insurance Amount Paid/Covered HH < Median implies Category  = LOW

The views expressed in the post are those of the author and in no way reflect those of the ISPP Policy Review or the Indian School of Public Policy. Images via open source.


[1]: Gleditsch, Nils Petter. 1998. ” Armed Conflict and The Environment: A Critique of the Literature.” Journal of Peace Research, Vol. 35, No. 3  381- 400. 

[2]: Billon, Philippe Le. 2012. “Digging into “Resource War” Beliefs.” Human Geography, Vol. 5, No. 2 1-14. 

[3]: Raleigh, Clionadh, and Henrik Urdal. 2007. “Climate change, environmental degradation and armed conflict.” Political Geography, Vol. 26 674- 694. 

[4]: Altieri, Miguel A., and Clara I. Nicholls. 2017. “The adaptation and mitigation potential of traditional agriculture in a changing climate.” Climatic  Change, Vol. 40 33-45. 

[5]: Adhvaryu, Achutya, Namrata Kala, and Anant Nyshadham. 2020. “The Light and the Heat: Productivity Co-Benefits of Energy-Saving  Technology”. Review of Economics and Statistics, Vol. 102, Issue 4 779-792. 

[6]: Somanathan, E., Rohini Somanathan, Anant Sudharshan, and Meenu Tewari. ” The Impact of Temperature on Productivity and Labor Supply:  Evidence from Indian Manufacturing”. Journal of Political Economy, forthcoming. 

[7]: National Statistical Office. 2020. Periodic Labour Force Survey (July 2018 – June 2019). New Delhi: Ministry of Statistics and Programme  Implementation.;

[8]: Dell, Melissa, Benjamin F. Jones, and Benjamin A. Olken. 2012. “Temperature Shocks and Economic Growth: Evidence from the Last Half  Century”. American Economic Journal: Macroeconomics, Vol. 4, No. 3, 66-95. 

[9]: Hsiang, Solomon M., Marshall Burke, and Edward Miguel. 2013. “Quantifying the Influence of Climate on Human Conflict”. Science, Vol. 341,  Issue 6151, 1235367. 

[10]: Dell, Melissa, Benjamin F. Jones, and Benjamin A. Olken. 2014. “What Do We Learn from the Weather? The New Climate-Economy  Literature”. Journal of Economic Literature, Vol. 52, No. 3, 740-798. 

[11]: Maystadt, Jean-Francois, and Olivier Ecker. 2014. “Extreme Weather and Civil War: Does Drought Fuel Conflict in Somalia through Livestock  Price Shocks?”. American Journal of Agricultural Economics, Vol. 96, Issue 4 1157-1182. 

[12]: Harari, Mariaflavia, and Eliana La Ferrara. 2018. “Conflict, Climate and Cells: a Disaggregated Analysis”. Review of Economics and Statistics,  Vol. 100, Issue 4 594-608.

[13]: McGuirk, Eoin, F., and Nathan Nunn. 2021. “Transhumant Pastoralism, Climate Change and Conflict in Africa”. Working Paper, Harvard  University. 

[14]: Food & Agriculture Organization (FAO). 2008. Managing Risk in Farming. (Farm Extension Guide, Volume 3), Rome, 2008: FAO 

[15]: Kumar, Anjani, Dhiraj K. Singh, and Prabhat Kumar. 2007. “Performance of Rural Credit and Factors Affecting the Choice of Credit Sources.”  Indian Journal of Agricultural Economics, Vol. 62, No. 3 297-313. 

[16]: Kumar, Anjani, K. M. Singh, and Shradhajali Sinha. 2010. “Institutional Credit to Agriculture Sector in India: Status, Performance and  Determinants.” Agricultural Economics Research Review, Vol. 23, July-December 253-264. 

[17]: Kumar, Anjani, R.K.P Singh, Shiv Jee, Subhash Chand, Gaurav Tripathi, and Sunil Saroj. 2015. “Dynamics of Access to Rural Credit in India:  Patterns and Determinants.” Agricultural Economics Research Review, Vol 28 151-166. 

[18]: Shukla, Sumedha, and Gaurav Arora. 2020. “No hand to lend.” Down To Earth, September 16th-30th: 50-54. 

[19]: NABARD. 2018. NABARD All India Rural Financial Inclusion Survey 2016-17. New Delhi: National Bank for Agricultural and Rural  Development (NABARD).

[20]: Kumar, Sunil Mitra. 2013. “Does Access to Formal Agricultural Credit Depend on Caste?” World Development, Vol. 43, No. 3 315-328.

Data Sources: 

[21]: Agricultural Census Division. 2016. Agriculture Census (2015-16). Census, New Delhi: Department of Agriculture and Farmers’ Welfare,  Ministry of Agriculture and Farmers’ Welfare, Government of India. 

[22]: Directorate of Economics & Statistics, Ministry of Agriculture and Farmers’ Welfare. 2017. Pocket Book of Agricultural Statistics. Statistical  Handbook, New Delhi: Ministry of Agriculture and Farmers’ Welfare, Government of India.

[23]: Ministry of Agriculture and Farmers’ Welfare. 2016. PMFBY State Wise Business Statistics . Accessed April 4th, 2021.

June 18, 2020
The COVID-19 pandemic has taken the wraps off the environmental vulnerabilities of the existing development paradigm of modern economies. The endeavour of governments should now be to institutionalise an administrative framework which sets precedence for sustainable and climate-friendly policies. Junior Fellow at the Observer Research Foundation, Tanushree Chandra makes a case for deploying green strategies to combat the myriad economic challenges brought about by the COVID-19 crisis. She locates the inadequacies in the government’s reform package and proposes an alternative policy agenda.

The 21st century has been heralded as one that will redefine the contours of human civilization. In the first two decades of the millennium, the twin wheels of unconstrained growth and rapid industrialisation, generously oiled by the powerful forces of technology and globalization, generated massive developmental gains for economies all over the world. However, as we entered the 20th year of the millennium, the formidable repercussions of the COVID-19 pandemic brutally jolted the development model of modern economies.  As policymakers struggle to devise an economic reboot, the process must begin with the singular realisation that we cannot and should not restore the pre-COVID-19 world. It was a world built on fragile, precarious and unsustainable foundations. The pandemic serves as a wake-up call to address the vulnerabilities of the existing development paradigm and rebuild a robust and resilient one.

Case for a Green Recovery

Latest research by Nobel laureate Joseph Stiglitz and leading climate economists Nicholas Stern and Dimitri Zenghelis shows that a green recovery will not just be beneficial for combating climate change but will also offer the best economic returns for government spending.1 The key economic challenges of a COVID-19 recovery plan will pivot around job creation and large-scale demand revival. Both can be effectively manoeuvred by deploying green strategies. Investment in green infrastructure, spanning from energy-efficient retrofits to climate-resilient construction, can be a policy win-win as they offer short-term economic benefits as well as long-term climate dividends.  A 2017 study points out that every $1 million in spending generates 7.49 full-time jobs in renewable infrastructure, 7.72 in energy efficiency, but only 2.65 in fossil fuels.2 Thus, green infrastructure spending could provide a powerful solution against widespread unemployment woes. In a similar vein, investment in green physical capital such as forest cover, green cover within cities including community gardens and parks, and landscape restoration projects could create new jobs and preserve biodiverse habitats at the same time. Such projects would be ideal at this juncture as they do not require specialised training, have minimal planning and procurement requirements, and most facets of the work meet social distancing norms.3 Furthermore, investment in such projects is also aligned with the climate policy of most countries and will help them achieve their Intended Nationally Determined Contributions (INDCs). For instance, India has committed in its INDC to create an additional carbon sink of 2.5 to 3 billion tonnes of carbon dioxide through additional tree cover by 2030.4

An emerging trend that coincided with the pandemic, and also perhaps got exacerbated by it, is the decline of the fossil fuel industry. The oil, gas and petrochemical industry, particularly in the United States, has been facing a long-term systemic decline.5 These industries are likely to exploit the pandemic to prevent their collapse by securing regulatory rollbacks and direct government bailouts. However, this must not be allowed to happen. Rather, the pandemic provides an opportunity to initiate the phase out of the fossil fuel industry and ramp up of the renewable sector in economies all over the world. Recent advancements in renewable technology, decline in cost of renewable resources, and downturn in global energy prices provide a conducive policy environment to scale up the sector.6

Another sector with high economic and climate-friendly potential is electromobility. As countries all over the world lift lockdowns and reopen their economies, private vehicle usage is likely to witness a surge as it presents the safest option given the contagious nature of the virus. This trend must be leveraged by giving additional incentives to consumers purchasing electric vehicles. The United Kingdom (UK) government is leading on this front by promoting e-bikes, e-scooters and electric vehicles as the preferred mode of transport in a post-COVID-19 world.7

How Green was India’s Stimulus Package?

2020 has hardly hit the half-year mark but India has already witnessed a series of unforeseen natural crises. With cyclone Amphan ravaging Eastern India, forest fires and heatwave hitting the North and a locust attack in Western India, the country is in desperate need of a revival strategy that can simultaneously address the pandemic and the mounting climate emergency. However, the ₹20 lakh crore Atmanirbhar Bharat stimulus package launched by the Indian government hardly had any green elements that could propel the Indian economy towards a sustainable recovery.

The stimulus package acknowledged infrastructure as one of the five key pillars of the economy, but did not earmark any funds for energy-efficient and climate-resilient infrastructure. Meanwhile, the UK government has launched a £3.6 million programme to retrofit homes with improvements such as better insulation, low-carbon heat and alternative power sources as a part of its economic recovery initiative.8 India, too, could have made substantial environmental gains by leveraging the stimulus package to promote energy efficiency in the residential sector, but no such initiative was included in the stimulus package.

On the other hand, the Indian government made an announcement allowing entry of private players in commercial mining of coal, thereby ending its monopoly in the coal mining sector. The announcement was a predictable one as the government had already passed a bill to that effect in Parliament on 12 March 2020, a few days before the lockdown was announced.9 At a time when most countries are enacting laws and earmarking funds to phase out coal, the government’s decision to give a boost to the most polluting fossil fuel is a massive let down. The rationale offered by the Indian government to support its decision is that it will boost domestic production, reduce coal imports and promote competition and transparency in the sector. However, the fundamental idea of injecting money in a sector that will fuel the climate emergency is not just economically unsound, but also self-destructive.

The renewable energy sector was also largely ignored in the Indian recovery package even though solar energy costs have never been more favourable.

What can Still be Done?

While the stimulus package most certainly did not live up to the expectations of those supporting a green economic recovery, there is still a lot that can be done to salvage the Indian economy’s green ambitions. It has unlikely that another fiscal stimulus will be injected into the economy by the government in the near future, but India already has a large suite of diverse policies which can be enhanced to achieve a high economic and environmental impact. For instance, the Faster Adoption and Manufacturing of Electric Vehicles II (FAME II) scheme could be leveraged to address the twin goals of job creation and promotion of electromobility in cities across India. Under the scheme, the government had earlier announced an outlay of ₹10,000 crore to boost the number of electric vehicles in India.10 The scheme also calls for the construction of 2,636 charging stations in 62 cities across the country. Another green step that is likely to increase the competitiveness of electric vehicles as well as raise government revenue is the increase in taxes on petrol and diesel. A back of the envelope calculation suggests every ₹1 hike in excise duty on petrol and diesel boosts the central government’s tax revenue by about ₹14,000 crore.11

Under the Atmanirbhar Bharat package, an additional allocation of ₹40,000 crore (over and above the budget estimate of ₹61,000 crore) was made for the Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA) programme.12 If a part of these funds could be utilised for creating green jobs, it could go a long way in catalysing India’s green recovery. Research shows that MNREGA projects such as soil and landscape restoration, check dam or stop dam construction, tree plantation, land terracing, silt application, restoration or desilting of ponds, etc have a positive environmental and economic impact.13 These projects, as stated earlier in the essay, are often well-aligned with local skills, require minimal training and can thus be implemented even within a short timeframe. They can thus play a pivotal role in accelerating India’s green recovery.


COVID-19 has crystallised the age-old tussle between economic and environmental policies. In the most dramatic and unimaginable way possible, it has demonstrated the pitfalls of adopting a development model that decouples economic growth from social and environmental parameters. As India’s economic recovery gathers momentum, we must not fall for the allure of short-term strategies and revert to unsustainable economic policies that make us vulnerable to unforeseen crises such as pandemics and natural disasters. The pandemic offers an ideal opportunity to course correct; we must capitalise on this opportunity and re-build a robust and resilient economy.


[1] Hepburn, Cameron, Brian O’Callaghan, Nicholas Stern, Joseph Stiglitz, and Dimitri Zenghelis. “Will COVID-19 fiscal recovery packages accelerate or retard progress on climate change?.” Oxford Review of Economic Policy 36 (2020).

[2] Garrett-Peltier, Heidi. “Green versus brown: Comparing the employment impacts of energy efficiency, renewable energy, and fossil fuels using an input-output model.” Economic Modelling 61 (2017): 439-447.

[3] See supra note 1.

[4] “India’s Intended Nationally Determined Contribution: Working Towards Climate Justice,”

United Nations Farmework Convention on Climate Change,

[5] Pandemic Crisis, Systemic Decline: Why Exploiting the COVID -19 Crisis Will Not Save the Oil, Gas, and Plastic Industries (Washington, DC: Center for International Environmental Law, 2020), 2,

[6] Christiana Figueres and Benjamin Zycher , “Can we tackle both climate change and Covid-19 recovery?,” Financial Times, May 7, 2020,

[7] Roger Harrabin, “Electric bikes could help people return to work,” BBC, May 18, 2020,

[8] “Mayor of London leads the way in making homes fit for the future,” Press Release, Februray 12, 2020, Office of the Mayor of London, accessed 20 May 2020,

[9] “Parliament passes law to open coal sector for commercial mining,” The Economic Times, May12, 2020

[10] Malyaban Ghosh, “How FAME 2 scheme aims to promote the use of electric vehicles in India,” Livemint, March 12, 2019,

[11] Nikunj Ohri, “Government Hikes Taxes On Petrol And Diesel By Rs 10-13/Litre,” Bloomberg Quint, May 6, 2020,

[12]“Nirmala Sitharaman’s 5th tranche covers MNREGA to health and education and more,” The Indian Express, May17, 2020,

[13] “Esteves T, Rao K.V, Sinha B, Roy S.S, Rai B.B, Rao I.B, Sharma N, Rao S, Patil V, Murthy I.K, Srinivasan J, Chaturvedi R.K, Sharma J, Jha S.K, Mishra S, Singh A.B, Rakhroy H.S, Rai S, Sharma R, Schwan S, Basu K, Guerten N, Porsché I, Ranjan N, Tripathy K.K & Ravindranath N.H, 2013. Environmental Benefits and Vulnerability Reduction through Mahatma Gandhi NREGS: Synthesis Report, Ministry of Rural Development and GIZ, New Delhi.”

April 30, 2020
In the global effort to mitigate climate change, India is set to play a significant, if not leading, role. In this article, Kartik explores where the country's decarbonization efforts stand right now and what it'll take to build a carbon-neutral power grid.

Climate change mitigation is a wicked problem to solve.1 Beyond the scientific question of how to limit carbon emissions and reduce polluting waste, it is also a moral question of who must lead this movement, who is most responsible for it, and who is likely to suffer the worst consequences. It is a problem encompassing complex international relations, nuanced differences in economic systems, and varying cultural lifestyles.2

India, in that context, presents an interesting paradox. Although it is a developing country with a fifth of its population (~about 270 million people) living in extreme poverty, it is already the world’s 3rd largest carbon emitter.3 The nation contributes to over 7 percent of global emissions, after China and the United States, both of which rank significantly above India on the United Nations Human Development Index chart.4,5

Figure 1: Carbon Emissions Split By Country

(Source: Union of Concerned Scientists)

Figure 2: Increase in Per Capita Power Consumption with Improvements in HDI

(Source: OurEnergyPolicy.Org)

A growing economy promises to a quarter of a billion people the status of the middle class, thereby creating energy demands leading to skyrocketing emissions.6 There is a moral equity case to be made for allowing India to achieve economic expansion through fossil fuel-driven growth similar to other developing nations as they enter the realm of prosperity.7 The planet, however, may not have enough time to recover if such a scenario is allowed to play out. Decarbonizing India’s power sector in that context holds a global significance in the fight against climate change8, given that electricity is the single most significant contributor to global carbon dioxide (CO2) emissions (electricity contributes to 66 percent of global emissions).9 It would seem unfair that the burden of saving the world’s climate has fallen on a nation failing to make ends meet for a significant portion of its population. However, India has not only lived up to these expectations but has also played a crucial part in a global fight against climate change.

Here is where India’s decarbonization efforts stand right now:

There’s more renewable energy in the Indian grid than one expects, with solar power outperforming other sectors.

Clean energy has always had a sense of Tomorrowism attached to it. Tomorrowism is a sort of skeptic optimism about an event that one believes is bound to happen, but will most likely occur glacially. In a survey of people quizzed for the due diligence of this article, 9 out of 10 individuals believed that there was less than 5 percent renewable energy in India’s power grid. However, the reality is brighter.

In 2010, India’s installed solar capacity was only 0.006 percent of its total generation capacity. Over the last ten years, solar’s installation has outpaced every single energy source in the Indian power grid, and solar alone now makes up 11 percent of the energy mix.

Figure 3: Increase in Share of Solar Energy Capacity in India (2010 – 2020)

(Source: Author’s Analysis, Power Ministry of India Data)

Solar energy sources, along with other clean sources like wind, biofuels, nuclear, hydro (large and small), and geothermal account for a sizable figure of 37 percent penetration of clean sources in the grid.10

Points scored

Figure 4: India’s Power Generation Capacity 2020

(Source: Author’s Analysis, Power Ministry of India Data)

Increasing clean energy sources has been successful due to several policy interventions.

In 2010, India launched the National Solar Mission with the sole aim of making India a global leader in solar energy. The mission set out an audacious target of a 2000X increase in solar energy over a period of 12 years, which would have totaled up to 20 Giga Watt (GW) by 2022. India is not a country famous for meeting its ambitious targets, but in this case, not only did India meet its targets, it did so a full four years ahead of schedule, in 2018.11

Several opportune market conditions supported this ambitious target:

  1. Cheap Labour
  2. Cheap Land
  3. Cheap Solar Modules

India had always had cheap land and labour but achieving cost-competitive solar panels required smart incentives, and a foreign policy that took advantage of China’s manufacturing prowess. China had figured out cheap solar modules in the early 2010s. Still, the west slapped anti-dumping tariffs on Chinese modules, hampering their growing production and further research and development (R&D), creating the perfect market conditions for chinese players to look to India as a growth market. This mix of cheap Indian land and labour, combined with cheap Chinese solar modules created the economic foundations required for a developing country to adopt renewable energy.12

As the Government of India’s 20 GW target seemed within reach, the government moved the goal post forward towards a more ambitious future – 175 GW clean energy by 2022 (Out of which 100 GW would be solar).13 The target was further moved up to a 500 GW target by 2030 (which would be roughly 50 percent of our total capacity) in June last year when there was a promising uptick in deployment.14 This progressive intent of government reflects the determination towards decarbonization, putting the clean energy requirement on an exponentially improving trajectory.

However, long term challenges remain with technology

Even though India’s grid could be 50 percent clean by 2030, the fact that the entire pie will grow (as a result of a growing economy) means the addition of  100 GW of fossil fuel-based generation.15 A net positive increase in the carbon emissions would do the planet no good even if it benefits India’s image in the global scenario. This raises the question of whether this net positive increase in carbon emissions could be eliminated by replacing all upcoming thermal plants through an even more aggressive clean energy policy.

The answer is again, wicked. Most clean energy sources are intermittent, which destabilize the grid because they fluctuate hourly, daily, and even seasonally. For, e.g., the entire output of a solar plant can fall from its capacity (say 100 MW) to zero if a sufficiently dense cloud passes over it – imagine what might happen during the monsoons if solar accounted for 30-40% of the national capacity. This is why thermal plants, technologically speaking, are still required: their ability to generate firm dispatchable power on demand, is a desirable characteristic for all generation sources.16

This is interesting, especially when looked at in the context of the demise of nuclear energy, which was once touted as the clean replacement for coal. Even though nuclear plants can produce zero-emission firm power and have gained scientific support for safety, they are still politically and culturally discarded as threats to humanity. A human tendency for negativity bias and lack of political efforts to reorient the societal view around nuclear energy is, therefore, likely to prevent the re-commercialization of the technology in the near future.17

One promising solution to intermittency is energy storage (like the lithium-ion batteries that Elon Musk’s Giga factories produce). However, most options are still nascent and costly. Signs are positive on the cost curve; yet, just last month, my team at ReNew Power won a government of India project where our hybrid (solar and wind) + battery storage power price (i.e., firm power) was cheaper than coal.18 With costs falling, energy storage is poised to play a considerable part in the future of the Indian grid, but India’s agility in being able to scale this technology still remains uncertain.19

India’s power policy needs restructuring

Power in India continues to be a state issue implying that regardless of the center’s sizeable clean energy targets, there is no binding mandate for states to execute them, which more often than not results in inconsistent policies that inhibit investment. Andhra Pradesh, for instance, canceled several PPA (Power Purchase Agreements) with clean energy projects in the state last year. This resulted in $40 Billion worth of investments put at risk because of a change in political administration in the state.20

Secondly, India’s distribution companies (DISCOMS) that buy electricity from power generating  enterprises in order to sell it to end consumers are in tremendous debt, about $740 Billion of it (~1/4th of National GDP).21 This has happened because DISCOMs are mandated to supply free electricity to the agriculture sector (size of the loss-making segment cannot be estimated because energy supplied is not metered). There is a hard cap on the price that DISCOMS are allowed to charge residential consumers. Further, power theft in India continues to be a pressing concern with complicated local transmission systems being highly susceptible to external breaches. While both agriculture and residential power policies remain valid instruments of state support for a poor population, there may be some value in thinking of alternatives to ensure financial sustainability.22

There is, however, a case for hope.

It is evident that there has been significant progress in decarbonizing the Indian power grid, and the government of India has shown serious intent in pursuing this goal with its considerable mandates. Still, several technological and policy challenges are likely to be major roadblocks in this project. Intermittency requires resolution, the energy storage industry needs promotion, nuclear energy needs rethinking as an option, and India’s power market requires restructuring for long term administrative and financial sustainability. The work ahead is immense, and it is easy to lose hope at the size of the challenge. Still, we must not forget that India has inertia and momentum on its side. In essence, India has already begun the decarbonization process, the market is sufficiently mature, most stakeholders across the chain are aligned on the goals, and the share of renewables in its grid is growing. This was no easy feat for a nation of India’s size, which quite rightly also had other pressing priorities but has, even then, chosen to participate and lead in this planetary battle. India will likely achieve its 2030 – 50 percent clean energy target. If trends are to be believed, it is also possible that an even more ambitious goal will supplant this goal as the tide continues to shift in favor of renewable sources. If the right factors work out at just the right time, India might perhaps become one of the first major economies to achieve a carbon-neutral grid, and only the fact that this possibility exists for a nation such as ours is a case enough for hope.

[1] Murtugudde, Raghu. “10 Reasons Why Climate Change Is a ‘Wicked’ Problem.” The Wire, December 11, 2019.

[2] Underdal, Arid. “Climate Change and International Relations (After Kyoto).” Annual Review of Political Science, May 2017.

[3] “India’s Poverty Profile,” World Bank (World Bank, May 27, 2016),

[4] “Each Country’s Share of CO2 Emissions.” Union of Concerned Scientists. Union of Concerned Scientists, October 10, 2019.

[5] “Human Development Reports.” | Human Development Reports. Accessed April 13, 2020.

[6] IEA (2019), World Energy Outlook 2019, IEA, Paris

[7] NJ Ayuk. “A Boycott of Fossil Fuel in Africa Would Be Misguided. Here’s Why.” World Economic Forum. World Economic Forum, January 19, 2019.

[8] Gulati, Kartik. “Why India and China’s Energy Strategy Holds the Key to Our Planet’s Future.” Medium. Medium, July 25, 2019.

[9] IEA (2019), World Energy Outlook 2019, IEA, Paris;

[10] “Policies and Publications.” Ministry of Power. Accessed April 13, 2020.

[11] TNN. “India Hits 20GW Solar Capacity Milestone.” The Economic Times. Economic Times, January 31, 2018.

[12] Pickerel, Kelly. “It’s Official: Chinese Solar Cells and Modules Hit with Additional 25% Tariff.” Solar Power World, August 8, 2018.

[13] A target of installing 175 GW of renewable energy capacity by the year 2022. MNRE, July 19, 2018.

[14] Varadhan, Sudarshan. “India Plans to Add 500 GW Renewable Energy by 2030: Government.” Reuters. Thomson Reuters, June 25, 2019.

[15] Jaiswal, Anjali. “Transitioning India’s Economy to Clean Energy.” NRDC, November 6, 2019.

[16] Llana, Karen. “Renewable Energy Intermittency: Realistic Solutions for Asia.” Pöyry global, December 18, 2018.

[17] Shellenberger, Michael. “If Nuclear Power Is So Safe, Why Are We So Afraid Of It?” Forbes. Forbes Magazine, September 6, 2018.

[18] Parikh, Anjana. “Greenko, ReNew Win SECI’s 1.2 GW Solar, Wind Auction with Storage for Peak Power Supply.” Mercom India, February 9, 2020.

[19] Llana, Karen. “Renewable Energy Intermittency: Realistic Solutions for Asia.” Pöyry global, December 18, 2018.

[20] Shah, Kashish. “$40 Billion of Renewable Energy Investments at Risk in Andhra – Opinion by Kashish Shah: ET EnergyWorld.” ETEnergyworld, August 7, 2019.

[21] Silver, Caleb. “The Top 20 Economies in the World.” Investopedia. Investopedia, April 17, 2020.

[22] Thomas, Tanya. “Discom Debt to Swing Back to Pre-UDAY Level of ₹2.6 Lakh Crore in FY20: Crisil.” Livemint. Livemint, May 6, 2019.

February 22, 2020
Deepak Gautam in his article analyses the need for a reorientation in the current carbon pricing policy discourse. He argues for governance and behavioural approaches to highlight the potential for improving the delivery of carbon pricing policies.

Climate change is a burning issue for the 21st century. Recently, 16-year-old Swedish Climate activist Greta Thunberg’s speech at the United Nations Climate Action Summit amplified global consciousness about the climate change menace.1 Today, climate change has become an established fact in the international community as evident from the UNFCCC’s Paris Agreement (2015) and the Intergovernmental Panel on Climate Change (IPCC) reports. However, despite widespread convergence on the menace of climate change, nations are struggling to evolve an effective climate change policy. One of the most contentious topics concerning climate change policy is carbon pricing.

Carbon Pricing is recognised as a policy that puts an explicit cost on emissions of greenhouse gases (GHGs). The carbon price value is expressed in a monetary unit per tonne of CO2 equivalent (tCO2e).2 It captures the cost of negative externalities of air pollution and GHG emissions. The insight behind carbon pricing is that if the government regulates the GHG emissions by giving incentives to alter carbon activities, it would lead to lesser polluting activities by industries and will therefore reduce emissions. Carbon pricing tends to increase the relative prices of carbon-intensive activities and tends to lower the relative prices of carbon free goods. It aims to influence economic decisions towards a lower carbon economy. The carbon price also stimulates clean technology, environment-friendly activities and market innovation to drive economic growth towards a low carbon economy.

There are two main approaches for carbon pricing: Emissions Trading System (ETS) and Carbon Taxes. An ETS is a market-based approach that puts caps on the emissions by considering carbon as a commodity and allows industries to buy and sell permits and credits to emit carbon dioxide. This market-based approach brings competitiveness among industries and induces them to introduce cost-cutting technologies to cut carbon emissions.

On the other hand, a carbon tax is referred to as directly putting a price on carbon by defining a tax rate on greenhouse gas emissions. A carbon tax also produces revenue for the government that can be used in welfare policies for the introduction of renewable energy and clean technology.

There has been a conundrum in the international community about the two approaches. The conundrum is related to the question of which is a better policy to cut the emissions: a carbon tax or ETS.3  Sweden is an inspiring example of a state-led policy that has implemented carbon taxation effectively.4 Sweden, currently, has the highest carbon price in the world at US$139/tCO2. Swedish government introduced a carbon tax in 1991. Since then, its economy grew by 60% and carbon emissions decreased by 25%.5 Similar examples of carbon tax approaches are followed by Finland, Liechtenstein, Switzerland and the Canadian province of British Columbia.

Alternatively, the market-based approach is executed in the form of ETS, followed by the European Union, South Korea, Australia and New Zealand.6 Developing countries such as India and China have also introduced a pilot emissions carbon-trading system. India has introduced ‘Perform Achieve and Trade’ (PAT), which incentivises energy efficiency in carbon-intensive industries, and a Renewable Energy Credit (REC) trading system on a pilot basis.7

World Bank’s State and Trends of Carbon Pricing 2019 report states that there is an increase in the number of carbon pricing initiatives in the international community, and nations are strengthening and aligning their existing climate policies with their climate objectives.8 Despite growing consensus to cut emissions via carbon pricing, nations are still far from meeting the objectives of the Paris Agreement. It can be substantiated by the IPCC special report of 2018 which states that the current efforts are not enough to limit global warming below 2°C.9 Therefore, it is crucial to understand the issues in the current policy discourse of carbon pricing.

Issues in Carbon Pricing

There is a broad consensus among the international community about the potential advantages of carbon pricing.10 However, there is much debate regarding the better climate policy option between carbon taxes or ETS. Summarised below are some of the issues related to carbon pricing policies.

• Critics of carbon taxes advocate it as a state-interventionist policy. Market-led economies are apprehensive regarding carbon tax. The fear is that carbon tax may not be effective as it can cause the possibility of tax evasion.11 For example, a stringent state-led carbon tax may compel industries to fudge the true level of pollution. Alternatively, developed countries such as the US, Japan and other western countries could outsource carbon-intensive production to poor and developing countries which have weaker climate governance.12 It has also been argued that carbon tax discourages investment, reduces profitability and puts an extra burden on industries.13

• Critics of carbon trading advocate that emissions trading schemes may fail to achieve the goal since the rules of the emission trading system is set in a lenient manner due to the influence and pressure of industrial lobbyist groups on governments.14 Sunita Narain, an environmental activist, in her book “Conflicts of Interest: My Journey Through India’s Green Movement” criticized the climate policies of the developed economies stating that environmental negotiations have been reduced to economic negotiations.15

Furthermore, the nations which are following the ETS have been criticized for their lax approach for excluding important sectors such as aviation, agriculture and transport.16

• According to the World Bank’s State and Trends of Carbon Pricing 2019 report the current efforts-either carbon tax or carbon trade- are insufficient. It also states that only 20 percent of global GHG emissions are covered by a carbon price. The climate objectives of the Paris Agreement aims carbon pricing at US$40/tCO2e to US$80/tCO2e by 2020 and US$50/tCO2e to US$100/tCO2e by 2030.17 It has been observed that less than 5 percent of global emissions covered under carbon pricing initiatives are consistent with Paris Climate objectives and about 50 percent of the emissions covered by carbon pricing initiatives are still priced below US$10/tCO2e. Thus, the current price levels of carbon pricing are still insufficient to address climate change substantially.18

• Among the 185 Parties that have committed their contribution to the Paris Agreement, only 96 members have started to plan or consider the use of carbon pricing as an instrument to achieve their targets. However, the current coverage of carbon pricing initiatives is still insufficient.19

•Carbon pricing policies find it difficult to gain and sustain public support. As the global economy is recovering from the economic crisis, it is often difficult to execute more ambitious carbon policies. Economic issues such as a slowdown in economic growth, unemployment, wealth inequality have resulted in social unrest and protest against the state policies. For instance, voters in Washington state rejected the carbon tax in 2018 and the anti-carbon tax rally was organised in Australia in 2011.20, 21 Similarly developing countries like India whose economy is primarily dependent on fossil fuels, an introduction of an ambitious carbon tax on emissions may lead to inflation in common goods. This can cause misery to the common man and thus result in the loss of public support.

New insights to improve carbon pricing

Michael Barber in his book, “How to Run A Government” advocates that rather than debating market-led approach versus government-led approaches, it is more important to emphasize the science of delivery.22 He emphasizes the value of good governance. It can be substantiated by the cross-national studies that have attempted to link the ambitious carbon policies with the existing extent of political trust and corruption.23, 24 It shows that countries that have a high degree of political trust and low degree of corruption perception have a better implementation of carbon policies. The reason behind the success story of Sweden may partly be due to the emphasis on good governance. The extensive public reasoning and social deliberation in Sweden have perhaps led to political trust and transparency prior to the fiscal reform that introduced carbon taxation.25 Additionally, it is also important to revisit the current pricing policies which are criticised due to their approach of “one size fits all” approach. A hybrid approach can be explored by combining the role of the state and the role of the market in delivering the outcomes. This can be done by identifying the potential areas where market-led or state-led approaches are effectively implementable.

Moreover, it is also imperative to focus on a decentralised approach in order to make carbon policies more effective. Carbon policies across the globe are complex due to the difference in the approach of the countries. A decentralised approach can potentially simplify the complexity of carbon policies. This approach focuses on the principle of subsidiarity which advocates that the decision-making process should be exercised close to the sub-national and citizenry level. It not only facilitates people’s participation but also facilitates public support and awareness. The sub-national government should be given the flexibility to articulate its own approach according to their local circumstances and local resources.

The Gujarat government’s recent pilot project “Emissions Trading Scheme” to combat air pollution from Surat’s industrial belt, is an example of decentralisation.26 Similarly, sub-national governments in America and Canada have introduced carbon pricing initiatives- emission carbon trading in Massachusetts (America) covering power plants and emission carbon trading in Nova Scotia (Canada).27 Furthermore, the successful implementation may be more likely to happen if the benefits of carbon pricing are concentrated at the constituency level. It will not only allow carbon policies to be closest to the citizens, thereby ensuring impact, but also results in increasing the legitimacy of the policies. Additionally, carbon pricing schemes if introduced at the subnational level are less likely to be affected should there be a change in national government. Apart from the governance approach, behavioural approaches also substantiate a new insight about the acceptability of carbon emission policies to mitigate climate change menace. It is imperative to note that climate change mitigation is not just about the introduction of ambitious goals but also about the understanding of socially desirable human behaviour. Carbon pricing reform policies are more likely to get acceptance if its benefits are concentrated and visible to the public. Studies have shown that merely changing the labelling of carbon pricing can result in a greater acceptance of the policies.28 For instance, Switzerland and the Alberta state of Canada have changed their carbon price labelling to dividends to make it more popular amongst people by highlighting and delivering the public benefits arising out of carbon pricing policies.29

Policymakers can further enhance the legitimacy of carbon pricing if the benefits of the carbon policies are more highlighted to the public than the tax cut. For instance, carbon footprints can be potentially harnessed in changing human behaviour. The carbon footprints can be assigned standardized numbers and these can be included in the branding of food products and various other consumer goods. When consumers buy these labelled carbon-footprinted products, it can serve to trigger a new rationality in the minds of the consumers. The enhancement of the visibility of environment-friendly tools such as carbon footprints can trigger consumers towards a more deliberative pattern of thinking which is crucial for behaviour change. Similarly, financial sectors such as banks can reward their customers based on the carbon foot prints numbers rather than the number of transactions. Consumers can then redeem the earned carbon footprint numbers. This re-orientation of consumer behaviour through such examples can be a game-changer in sustaining carbon policies.

Carbon Policies play a decisive role in curbing GHG emissions. However, its implementation is often hindered by the debate of the state versus the market-based approach. The current carbon pricing policy discourse needs reorientation. Governance and behavioural approaches highlight the potential to improve the delivery of carbon pricing policies whether the policies are carbon trading or carbon taxation. The decentralised approach in governance can potentially transform the carbon policies into a workable form. Other governance parameters such as studying human behaviour, degree of corruption and political trust are defining parameters for the successful implementation of carbon pricing policies.


1. “Greta Thunberg tells world leaders ‘you are failing … – UN News.” 23 Sep. 2019, Accessed 30 Dec. 2019.

2. “State and Trends of Carbon Pricing 2019 – World Bank ….” 6 Jun. 2019, Accessed 30 Dec. 2019.

3. Frank, Charles. “Pricing Carbon: A Carbon Tax or Cap-And-Trade?” Brookings. Brookings, July 29, 2016.

4. “When It Comes to Emissions, Sweden Has Its Cake and Eats It ….” 16 May. 2016, Accessed 30 Dec. 2019.

5. Ibid.

6. “Climate Change – Open Knowledge Repository – World Bank ….” Accessed 30 ec. 2019.

7. “Renewable Energy Certificate (REC) Mechanism in India.” Accessed 30 Dec. 2019.

8. Ibid.

9. “Summary for Policymakers of IPCC Special Report on Global Warming of 1.5°C Approved by Governments.” IPCC Summary for Policymakers of IPCC Special Report on Global Warming of 15C approved by governments Comments. Accessed February 9, 2020.

10. “What Is Carbon Pricing?” What is Carbon Pricing? | Carbon Pricing Dashboard. Accessed February 9, 2020.

11. Pettinger, Tejvan. “Carbon Tax- Advantages and Disadvantages.” Economics Help, November 28, 2016.

12. “Wealthier countries ‘outsource’ their carbon … – Stanford News.” Accessed 30 Dec. 2019.

13. “Effects of a Carbon Tax on the Economy and the Environment.” 6 May. 2013, Accessed 30 Dec. 2019.

14. “Lobbying for and against Climate Solutions.” Nature News. Nature Publishing Group, May 28, 2019.

15. “Conflicts of Interest: My Journey through India’s Green ….” 2 Apr. 2018, Accessed 30 Dec. 2019.

16.Schroeder, Miriam. “How Things Work: Carbon Trading.” Our World. Potsdam University. Accessed October 2, 2019.

17. “State and Trends of Carbon Pricing 2019 – World Bank ….” 6 Jun. 2019, Accessed 30 Dec. 2019.

18. Ibid.


20. Press, Associated. “Anti-Carbon Tax Rally Hits Australian Parliament.” The Guardian. Guardian News and Media, August 16, 2011.

21. DePillis, Lydia. “Washington State Voters Reject Carbon Tax.” CNN. Cable News Network, November 7, 2018.

22. Barber, Michael. How to Run a Government: so That Citizens Benefit and Taxpayers Don’t Go Crazy. London, UK: Penguin Books, 2016..

23. Rafaty, R. (2018). Perceptions of Corruption, Political Distrust, and the Weakening of Climate Policy. Global Environmental Politics, 18 (3) 2018 .

24. Why Is Carbon Pricing in Some Countries More Successful than in Others?” Our World in Data. Accessed October 8, 2019.

25. Ibid.

26. “Gujarat Pilots World’s First Emissions Trading Project In Surat ….” 15 Sep. 2019, Accessed 30 Dec. 2019.

27. “2019 State and Trends of Carbon Pricing – World Bank ….” 1 Jun. 2019, Accessed 30 Dec. 2019.

28. Why Is Carbon Pricing in Some Countries More Successful than in Others?” Our World in Data. Accessed October 8, 2019.

29. Ibid

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