BackIndia’s regulation needs modernization: Ratan Tata
The chairman of Tata Trusts on sustainability and renewable energy in India
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On the sidelines of a Global Forum on ‘Innovating for a Sustainable Energy Future’, organized by Tata Trusts and University of California, Los Angeles (UCLA), Ratan Tata, the chairman of Tata Trusts, spoke on sustainability. Edited excerpts from an interview:
The renewable energy sector depends heavily on government policy support and faces many challenges in terms of access to funds, land acquisition and cost competitiveness. What do you think the government could do to make it more attractive to investors?
Although regulation helps in protecting consumers, in India, regulation created in the 1930s and 1940s hasn’t been modernized in line with the changing times and technologies. Even the Vatican, which is very static in terms of rules, is willing to review and change established norms. Our regulations too need the same approach. As far as encouraging new clean energy technologies is concerned, policy should be sympathetic to the enormity of the problems that exist. We have in the past followed the old Soviet model of growth, where the state sector was considered responsible for the country’s development. Unlike the Soviet model, India did have a private sector but it was considered secondary. Defence, strategic and heavy engineering sectors were considered part of the state sector. In 1991, we opened up the economy but some of the old mindset still remains in some quarters. I do not want to sound cynical. The country now has a new sector—start-ups. You cannot consider it secondary to the public sector.
India has committed to reducing carbon emissions by 35% by 2030 and needs around $2.5 trillion for this. Much of this will go towards acquiring patented clean energy technologies. How do you think the country could address this challenge?
There is no one-size-fits-all (approach). The problems in India may be different from the problems or solutions that exist in the US or in other countries. There has been a tendency to go and buy technology. What we (Tata Trusts and partners such as UCLA) are trying to do is to put our best minds together to address the problems by ourselves here and try to find (local) solutions.
Do you think technology holding companies should consider differential pricing for their products and services for customers from developing nations?
When a company goes to the commercial market with a technology that adds value, it needs to be seen as equitable to everyone without getting into classifications of poor or rich countries. One needs to be seen as fair to all. Differential pricing based on national income does not enable that.
Do clean energy projects have the potential to replace a large part of our energy mix or will they only play a complementary role?
We are behind our targets on unconventional energy. I don’t think there would ever be a situation when new technologies would render idle the capacities in conventional energy. The question really is whether we should cause more depletion of resources in order to boost economic growth or whether we should be giving greater attention to renewable or non-depleting energy resources that protect the planet more, not for us, but for future generations. You will not see the results of this yourself; your children will.
Will falling prices of fossil fuel discourage investments into clean energy?
There is always the issue of supply and demand. The current trend in commodity prices may be a happy moment for one segment and an unhappy one for another. These trends get reversed. I hope the current price trend does not discourage investments in clean energy projects. In the past, there have been fossil fuel crises, and when they receded, research in renewable energy has halted.
That is a very short-term view because we repeatedly go through such cycles in commodity prices. If not in our time, but certainly in the future, fossil fuels are going to die out and there would be a crisis unless we have found resources to replace that.
Do you think rationing of roads is a good way to reduce emissions ?
The even-odd licence plate solution being tried in Delhi has been attempted in other countries and has worked to some extent there. I am not going to dismiss it. Maybe it needs more supporting infrastructure.
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