India’s Energy Subsidies Favour Fossil Fuels Over Renewables

India’s Energy Subsidies Favour Fossil Fuels Over Renewables

An inventory of energy subsidies provided by the central government in India shows that the total value of such incentives has declined substantially to Rs 1.3 trillion (USD 20.4 billion) in the financial year April 2015-March 2016 from Rs 2.2 trillion (USD 35.8 billion) two year earlier, primarily due to the drop in global oil prices and reforms to curb wasteful consumption in oil and gas subsidies.

The good news is tempered by the fact that federal subsidies to coal mining and coal-fired electricity generation have remained more or less the same at Rs 150 billion (USD 2.3 billion) in 2016, according to a new report, titled India’s Energy Transition: Mapping subsidies to fossil fuels and clean energy in India, which was prepared by the Global Subsidies Initiative of the International Institute of Sustainable Development (IISD) in collaboration with the UK’s Overseas Development Institute (ODI) and consultancy firm ICF.

Government subsidies, in the form of tax breaks and business incentives, typically drive the trend of energy consumption in any country. This is famously illustrated by the example of Energiewende, the transition by Germany to a low carbon, environmentally sound, reliable and affordable energy supply. Read More…

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