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The effects of global warming are already visible. Average temperatures are only 0.8 degree Celsius higher today than in 1880. Yet there is already an increasing frequency of extreme weather events, rising ocean temperatures and disappearing corals, melting glaciers and shrinking polar ice caps, and rising sea levels.

India’s energy policy has to be seen in this global context, with two India-specific factors in mind: resource endowments and energy security. India remains heavily dependent on vast reserves of coal, which is also the dirtiest fuel. But switching from coal to cleaner oil or gas poses a security risk since India is heavily dependent on imports for these fuels. Hence, India’s long-term strategic interest requires a radical shift from fossil fuels to renewables, including hydropower. But other supporting strategies are required over the medium term. A strategic energy policy menu could thus include:

1.Renewables: India should move towards maximum dependence on renewables, given its vast potential for completely clean, radiation-safe and strategically riskless solar and wind power. Instead of subsidizing power prices and distorting energy markets to achieve this goal, tax incentives should be used to maximize investment in renewables. They can turn India’s barren deserts and other non-cultivable land into vast energy generation fields. However, the share of renewables being very low at present, this long-term strategy will entail continuing dependence on other energy sources over the medium term.

2.Coal: Heavy dependence on coal will continue for years, but it should be gradually reduced. Meanwhile, large tax concessions could incentivize investment in clean coal technologies that can significantly reduce carbon emissions from coal-based power plants.

3. Oil and gas: The shift from coal to oil and gas will further increase India’s import dependence and energy security risk. To minimize this risk, import sources should be diversified further while incentivizing domestic exploration for oil, especially gas reserves.

4. Nuclear power: Though a clean fuel with large expansion possibilities, it carries a high risk of disastrous accidents as seen in Russia, Japan and the US. Given India’s relatively weak regulatory environment, it is best to draw on nuclear power only to meet gaps in supply from other sources.

5. Hydropower: This is a clean, renewable energy source, though usually not treated as such. Its share of energy supply has declined from nearly 54% at independence to only 11% today. This neglect is inexplicable since only 35% of hydropower potential has been utilized and “run of the river” projects do not require large ecologically damaging reservoirs that also displace people. This readily available energy source is a low hanging fruit that should be exploited to the maximum and at the earliest.

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