Wednesday, July 24, 2019

INDIA ROAD TOWARDS 5 TRILLION ECONOMY SERIES 1...Climate Change



Climate Change based economic growth is an opportunity for the GDP growth of many economies. Closing down the traditional models and building new energy-efficient models help to create economic demand for goods and services. The further improves employment and improves per capita income of an economy. Efficient cost management and utilization of resources under climate change help an economy to grow in a paradigm in the long run. In these articles, we will present in phased manner various segments which will draw the attention towards the road of achieving India’s dream of Rs .5 trillion economies.

The battle for climate change is between the economies which are focusing to become a developed economy and developing the economy. The responsibility weight is more on the developing economies to move faster towards green energy.

Coal the based economy is highly inefficient cost burden on an economy. When traditional economic modes are replaced with energy-efficient one's employment and GDP growth through ancillary industries growth justifies the long term growth of an economy.

The world the fastest-growing economy is aggressively moving in term of green energy based GDP. According to the Energy Information Administration, natural gas is displacing coal and comprises about 62% of all-new generation. Wind and solar made up 21% and 16%, respectively, all in 2018. And coal is falling to its lowest use in decades, expected to be 24% of electricity production in 2019.
But a country like India is focusing on coal-based consumption model and is expanding the coalfields is a sudden shock for the global economy. India and all those countries where GDP growth is going to pick up the demand for clean energy is going to be highly in demand. Coal-based power supply will only create more pollution for the country.

The dream of Rs. 5 trillion economies of India cannot be achieved without clean energy. Green energy is going to be one of the key contributors to this 5 trillion economy. The traditional model of energy supply will not create faster growth.

 Deforestation and coal-based models of energy supply will create the only devastation for the economy. In recent data, it has been found that Captive coal mines produced 25.1 million tonnes of the fuel in FY19. This is 55% higher than FY-18 numbers. Further Auction of new coal mines is going to happen soon. If a climate reacts opposite to the normal mode then framing and other segments of the economy will be impacted. Coal Mines and deforestation are already played the damage game on climate. Agri outputs will be impacted severely in the coming years if brakes are not placed on coal mines and deforestation.  Unless the government comes up with rules for a reduction in mining, focus towards green energy will not build rapidly.

We are not investing properly in green energy-based models. The TAXATION benefits need to be introduced in several layers of the economy so that renewable and green energy-based models are adopted and consumed.

The adoption of 5G in the country will spook the demand for energy significantly. The power consumption will take a new direction as faster internet will open up many technological business models replacing traditional models. At the same time without green-based energy models, climate change will spook inflation in the long term.

Many countries particularly Islamic countries are investing in Green Energy segment. In Malaysia, the world’s very first corporate green sukuk worth 250mn ringgit ($61mn) was issued by Tadau Energy in early 2017 to co-finance large-scale solar construction. Indonesia became the first country in the world to issue $1.25bn of sovereign green Sukuk in 2018 and another one in two tranches at a total value of $2bn in February 2019. Islamic finance will be considered as one of the primary financing strategies for green energy projects, in particular in the GCC, Jordan, Egypt, Malaysia, Indonesia and Pakistan. 

 Green energy-based audit practices need to be formed where taxation benefits will be properly passed out to the corporate. Taxation benefit for corporate will shift the focus from traditional power consumption mode to power-saving mode. Taxation benefit will be given after a successful audit have been done. Once the auditing standards for taxation benefit are framed for green energy the focus towards power saving and energy efficiency models will grow.

The auditing standards need to be designed and upgraded so that proper measurement of the implementation of GREEN ENERGY is accessible and the same benefit is passed to the company.

The benefit should be for a decade so as to change the society completely into green energy.  Green energy is going to be a huge contributor to the GDP.

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