Union Budget 2022: Energy Transition and Climate Change

Climate change, also referred to as global warming, implies a rise in surface temperatures on Earth. Though taken lightly at first, climate change is increasingly becoming a concern to global security. Keeping in mind the severity of negative externalities caused by climate change, Prime Minister Narendra Modi pledged his commitment to fighting against climate change at the COP26 Glasgow summit in October 2021 by a low carbon emission policy called ‘Panchamrit’. 

In the budget, Hon’ble FM Nirmala Sitaraman has also expressed the significance of sustainable development in terms of employment opportunities and the country’s sustainability and has thereby proposed various short-term and long-term opportunities. 

As a further commitment towards this, the 2022-23 budget proposes to facilitate domestic manufacturing of 280 GW of installed solar capacity by 2030, accompanied by an additional allocation of Rs. 19,500 Crore for Production Linked Incentives (PLI) for manufacturing of high-efficiency modules with priority to fully integrate manufacturing units from polysilicon to solar PV modules. The budget also proposes that 5-7 per cent of biomass pellets will be co-fired in thermal plants resulting in carbon dioxide savings of 38 mmt annually, providing an extra source of income to farmers, increasing job opportunities for the locals, and preventing stubble burning in agricultural fields. 

The budget later emphasized the aspect of energy management and proposed that energy-saving measures will also be promoted in large commercial buildings through the Energy-Service-Company-Business modal by means of capacity-building exercises and awareness campaigns and brought in accountability on the part of large businesses.