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Journal of TheSouthern India Chamber of Commerce and Industry
www.sicci.in
Vol.No.II May- June2015
Green Industrialization
EDITORIAL
GREEN INDUSTRIALIZATION
Rather than use the words Climate Change, the words ‘Climate disruption’ might though be a better term to describe what is happening worldwide and what India is experiencing this year - heat waves and a prospect of a decient monsoon. It is heartening to notice that the debate with climate- skeptics is now over: such extreme weather events clearly show that climate change is there and that we have to act, globally and locally. Since the industrial revolution there has been a rapid increase in the production of human-made greenhouse gases – in particular carbon dioxide, methane and nitrousnitrous oxide. A growing economy like India is now confronted with the challenge of sustaining rapid economic growth amidst the increasing global threat of climate change.
So how do we ‘Make in India’ with not only Zero defect but also with Zero effect? This means that we need to follow a different path of growth compared to what has been done in developed countries since the industrial revolution or in China for that matter.
The chamber believes that an important step would be to improving energy efciency for achieving sustainable economic and social development. The strategy of improving the energy efciency offers a powerful way forward by reducing the need for investment in new infrastructure, by cutting fuel costs, and by increasing the competitiveness for business and welfare for consumers. Importantly though, energy efciency leads to extensive environmental benets through reduced emissions of greenhouse gases. Apart from energy conservation and efciency improvements, the need to nd and develop non-conventional energy sources has been recognised by the Government of India. MaMany of these non-conventional energy sources are both clean and renewable and need to be seriously considered for sustainable low carbon and high growth strategies. For instance, the Hon’ble Prime Minister Mr. Narendra Modi’s announcement of 100 GW of solar by 2022 is quite rele-vant to tap India’s potential in this sector.
It is welcome to note that many businesses now include climate action in their long-term strategy and their daily activities, including in Chennai. It should also be noted that in many cases Corporate Social Responsibility (CSR) is a key element as well.
Hence as UN Secretary General Mr. Ban Ki-Moon states, "Climate change is destroying our path to sustainability. Ours is a world of looming challenges and increasingly limited resources. Sustainable development offers the best chance to adjust our course."
CHAMBER AT WORK
Executive Breakfast Meeting on TN VAT
Interactive Panel on 'Indian Retail Sector: Unied Commerce - Strategies for Delivering Multi Channel Customer Experience'
SICCI organized Interactive Panel on 'Indian Retail Sector: Unied Commerce - Strategies for Delivering Multi Channel Customer Experience' at 10.00 a.m. – 1.00 p.m. on 30th May, 2015 at Hotel Vivanta by Taj Connemara, Chennai.
Therefore the interaction with Mr. Sarvar Allam, Additional Commissioner, Commercial Taxes, Government of Tamil Nadu helped the participants immensely.
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SICCI organized Executive Breakfast Meeting on Executive Breakfast Meeting on TN VAT at 8.00 a.m. on 16th May, 2015 at Hotel My Fortune (Formerly Hotel Chola Sheraton), Chennai.
The Tamil Nadu Government in its budget announced the withdrawal of the 3% Input Tax Credit reversal which is sure to add to the competitiveness of Tamil Nadu's Industrial produce. Dealers will also be able to claim input tax credit on inter-state sale of goods without c Form with Clause C under Section 19(5) of the TN VAT Act. This removed the hassles associated with the inter-state sale of goods withoutwithout 'C' Forms. The Commercial Taxes Department plays a vital role in revenue mobilization for the Government of Tamil Nadu.
Mr. Sarvar Allam, Additional Commissioner, Commercial Taxes, Government of Tamil Nadu interacting with the participants
View of the audience
Mr. S. Raghavan, Secretary, SICCI presenting memento to Mr. Sarvar Allam, Additional Commissioner, Commercial Taxes, Government of Tamil nadu
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SICCI jointly with All India Organization of Employers organized a Two Day Workshop on Advanced Industrial Relations at 10.00 a.m. on Thursday, the 18th & Friday, the 19th June, 2015 at Hotel Vivanta by Taj Connemara, Chennai.
Mr. Asim Talukdar, Mr. V. Balaraman, former, Jt.LC, Mr. V. Murali, former, Dy.CLC, Mr. Anand Gopal, Sr. Advocate made presentations on the occasions.
Mr. A. Sathish Kumar, Chairman, SICCI retail committee delivered theme presentation. The expert panelists Mr. Sao Satjeesj Sadagopan, Head, Digital for India Business, TCS Mumbai, Mr. Murali Sundar, Head, Henkel Beauty Care India, Mr. Ajay Nair, Partner, Ernst & Young, Mr. Rajan Jindal, Vice President, SellerWorx, and Bangalore made presentations.
Mr. Asim Talukdar interacting with participants View of the audience
Mr. Jawahar Vadivelu, President, SICCI presenting memento Mr. A. Sathishkumar,Chairman, SICCI retail committee
Mr. Ajay Nair, Partner, Ernst & Young addressing the gathering
Two Day Workshop on Advanced Industrial Relations
SICCI jointly with Centre for Innovation Incubation and Entrepreneurship (CIIE) organized Executive Session on “Towards Green Industrialization: Celebrating Climate Change in Manufacturing” at 6.00 p.m. on 23rd June, 2015 at Hotel My Fortune, Chennai. We have scheduled the event to begin with registration at 6.00 p.m. and conclude with dinner at 8.00 p.m.
DDr. Palani G Periasamy, Vice President, SICCI delivered the welcome address and said that an important step would be to improving energy efciency for achieving sustainable economic and social development. The strategy of improving the energy efciency offered a powerful way forward by reducing the need for investment in new infrastructure, by cutting fuel costs, and by increasing the competitiveness for businessbusiness and welfare for consumers. Importantly though, energy efciency led to extensive environmental benets through reduced emissions of greenhouse gases.
Mr. Bhoovarahan Thirumalai, Chairman, SICCI Energy Committee delivered the theme address.
MMr. Bharat Joshi, British Deputy High Commissioner while addressing said that climate change plays a key role in modifying weather and rainfall, the coming generations must recognize its importance. Britain has invested in India more than US and Japan, which is why it is showing interest in the country’s role in creating a sustainable environment. It must also noted that the United Kingdom has given more than 1.2 billionbillion euros for climate change fund and is planning to allocate another 1.8 billions euro for the cause.
Executive Session on “Towards Green Industrialization: Celebrating Climate Change in Manufacturing”
Dr. Palani G Periasamy, Vice President, SICCI presenting bouquet to Mr. Eisenhower
Dr. Palani G Periasamy, Vice President, SICCI presenting bouquet to Mr. Narasimham
Mr. Bhoovarahan Thirumalai, Chairman, SICCI energy committee making theme presentation View of the dignitaries
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Mr. V. Narasimhan, Executive Director, Brakes India said that Except energy, everything can be recycled. Our company has taken various measures for its conservation. We get 34 per cent of our energy requirement from renewable energy source. Mr. Eisenhower, Director, Saint Gobain Glass highlighted the measures taken by the organization to become a zero-efuent company.
Interactive Panel Discussion on Leveraging Intellectual Property for Growth and Competitiveness
Mr. Jawahar Vadivelu, President, SICCI delivered the welcome address and said that Accouding to reports India is ranked 29th in the Protection and Enforcement of IP rights, wherein Vietnam and Thailand are ranked before India. The last couple of years China has lled the largest number of patents in the world and in Europe nearly 77 million jobs are created directly or indirectlyindirectly through IP. Mr. J. Sivanandaraaj, Partner, Sivanandaraaj & partners delivered the theme address. He said that on one hand the IPR policy needed to recognize the new forms of IP while also harnessing the advancements in technology. IPR challenges have to be met increasingly through political action and diplomacy. The government needed to strengthen its decision-makingdecision-making process and boost the skills of its negotiators. He further added that while India does not have an IPR policy, it had a strong legal foundation. Important precedents have been set especially in pharma- related matters.
SICCI organized an Interactive Panel Discussion on Leveraging Intellectual Property for Growth and Competitiveness on Saturday, the 27th June, 2015 at Hotel Vivanta by Taj Connemara, Chennai. We have scheduled the event to start at 10.00 a.m. and nish by 1.00 p.m. with the networking lunch.
Mr. Jawahar Vadivelu, President SICCI presenting bouquet to the Hon'ble Justice K N Basha, Chairman, Intellectual Property Appellate Board
Mr. Bharat Joshi, British Deputy High Commissioner, addressing the gathering View of the audience
Hon’ble Justice Mr. K N Basha, Chairman, Intellectual Property Appellate Board, delivered the inaugural address and said that India spends less than one per cent of its GDP on R & D, of which the government’s contribution is 80 per cent and the private sectors contribution is 20 percent. He also said that other countries 1.5 per cent of the GDP is spent on R & D andand the private sector invests more than the Government on it. He further said that India has the seventh largest Intellectual Property (IP) in the world and nearly 40,000 applications come every year of which 20 per cent is from the pharmaceutical industry. IP needs to be protected as it is the greatest asset for the economy. Indian Laws on IP is one of the best in the the world.
Presentations were made by Mr. T V Madhusudhan, Dy. Controller, Patent & Design, Ms. Shilpi Jha, Sr. Counsel – South Asia, US Embassy, New Delhi, Mr. L.Suresh Past President, South India Film Chamber of Commerce, Dr. Shriram Ragavan, Vice President, Evolva Biotech, Mr. P V S Giridhar, Sr.Partner, P V S Giridhar & Sai Associates, during the technical session.
Mr. Jawahar Vadivelu, President, SICCI addressing the gathering
View of the dignitaries
Vew of the audience
Justice K N Basha, Chairman, Intellectual Property Appellate Board addressing the gathering.
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CLIMATE CHANGE: WHY SHOULD WE CARE
Why do we care about energy and climate change? What is the problem we’re trying to tackle?
If we are to see continued economic growth that benets everyone (including in the UK, India and South Asia), it needs to be sustainable.
TThe current global trajectory sees growing demand for resources (energy, water, food) outstripping supply. Carbon- intense economic practices mean that without aggressive action by all countries, the planet’s average temperature will rise by over 2 degrees by 2050. That would be catastrophic for the world that our children and grandchildren inherit.
Green grGreen growth isn’t just a nice-to-have.
It has to be an integral part of a country’s economic planning. We want to see all countries acting now to shift their economies onto a low carbon and resource efcient trajectory, to make them more resilient to these future challenges.
WWe want to collaborate with India to help both the UK and India become and reap the benets of becoming globally competitive, low carbon energy economies.
(Innaugural Address by Mr. Bharat Joshi, British Deputy High Commissioner, at the Executive Session on‘Towards Green Industrialization: Celebrating Climate Change in Manufacturing" on 23rd June, 2015 in Chennai)
The UK is putting its money where its mouth is.:
• We are taking serious domestic action to transition to a green economy
• Our ground-breaking climate change act (2008) commits the UK to an 80% reduction of carbon emissions on 1990 levels by 2050.
•• The UK is already both a world class destination for inward investment and a world leader in green research,technology and service provision.
Everybody has a role to play. So we need to work together towards an equitable solution in the form of a global deal. Which is what UFCCC COP at Paris end of this year will aim at. That’s not just in our interests but in India’s too.
India is already feeding 17% of the world’s population on 3% of the world’s arable land with 4% of the world’s fresh water. Climate change is exacerbating this challenge, by making rainfall patterns more variable and impacting on agricultural productivity. Monsoon patterns are already changing – shorter but more intense rains make it harder to cultivate crops
FFar from constraining or penalising India, a global climate deal will bring huge nancial benets to India through carbon credits for investments.
A global deal would ensure action to tackle climate change whilst protecting India’s development headroom. India stands to benet hugely from effective carbon markets through carbon credits for low carbon projects
TThe energy choices India makes today will dictate how much impact India has both on the world’s climate and on global energy markets. India’s decisions will also impact on its future energy security and the extent to which access to energy constrains its growth.
And tackling this global problem will be impossible without India. India’s huge economy is growing quickly.
UK & India
AA low carbon Indian economy is good for India and the UK. We want to help make India’s growth sustainable, not constrain it. That’s partly because of self-interest: the UK has consistently been India’s largest inward investor, investing more than the US and Japan combined last year. So India’s growth matters to our economy.
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The shift to a low carbon economy brings opportunities across the global economy.
As an emerging international hub for low carbon expertise and innovation, the UK is helping global businesses to shift to a low carbon future through smarter, more sustainable low carbon solutions.
AndAnd with a dynamic business environment fostering innovation and collaboration, the UK is well-placed to lead the global shift to a low carbon future and seize opportunities across all sectors of the global economy.
UK consultants also offer the best
specialist advice on complying with
climate change policy, emission reduction commitments and enenvironmental
nancial transactions.
have been saved, mostly through efcient building design, and average cement substitutions of 32%.
British Telecom dramatically reduced energy consumption of the communication services through a single converged network rather than installing separate voice and data trafc networks.
WWe can share our knowledge, for example about technology advances. The UK has expertise in Advance combustion engines, new and lightweight materials and innovative and niche vehicles and products which is why 30 % of European engine production is based in the UK and the world’s rst battery-electric mass produced car, the Nissan Leaf, (50,000 each year) is manufactured in Tyne andTyne and Wear plant.
We have experience in renewable, including Offshore wind: the UK hosts more than half of the world’s world’s off-shore wind and largest wind farms in the world - 14 OSW with a capacity of >1.5GW - with a further 65GEW planned by 2020.
InIn Marine energy innovation - the greatest number of patents and 25% of the wave and tidal technologies actively being developed, with 24 universities focused on marine energy.
UK consultants also offer the best specialist advice on
complying with climate change policy, emission reduction commitments and environmental nancial transactions.
We can share our research: Joint UK-India research in the widest range of elds is worth around £150m from its inception (2009 to date).
TThese collaborations are closely linked with UK and Indian industry partners, with more than 90 partners involved in the research.
This programme/funding includes - Fellowships for Leaders in Innovation, PhD student mobility programme, Mental Health and Substance Abuse, Women’s and Children’s Health, Cancer Biology, Translational Regenerative Medicines in Neuroscience and Antimicrobial Resistance.
TThere are some very interesting research partnerships such as between Aston University, UK and Anna University in Chennai which aims to develop joint capacity in high-efciency, high - recovery desalination processes powered by sustainable energy sources including low-grade thermal sources such as solar, ocean thermal, industrial waste heat and geothermal sources.geothermal sources.
We can help India nd smarter more sustainable solutions which maximises value and puts sustainability at the heart of projects.
We can share:
WWe can share our experience about what is possible as we showed when we hosted London 2012. 2012 had the rst summer host city to embed sustainability into planning from the project start to deliver a low carbon games.
OOver 85,000 tonnes of embodied carbon
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Integrate desalination systems for sustainable food production in greenhouses having minimal water and energy footprint.
Develop capacity and tools for modelling of sustainable-energy desalination systems and for climate-controlled greenhouses making use of desalination brines for cooling and salt production.
BBetween University of Exeter and Indian Institute for Science Education and Research Trivandrum.
which will study the effectiveness of key native pollinators in rendering pollination services in the highly fragmented forest and neighbouring marginal agricultural holdings in the Western Ghats landscape.
We can share funding:
LLet me share with you some examples of collaboration & support:
1. We support projects in several parts of India that involves integrating low-carbon planning into master planning of cities. Now complete in Madurai, Bengaluru and ongoing in Aluva.
2.2. Working with Kolkata Municipality on Solar housing and energy efciency.
3. Another project brought together 52 South Asian cities and local governments on urban low-carbon management. We are delighted that Chennai was one of those cities.
4. Yet another project involves low-carbon vehicles including weight-reduction using advanced materials.
5. The U.K.-India Business Leaders Climate Group comprises well-known India CEOs.
6. We are supporting GOI MNRE in developing the First Offshore Wind Farm in India, along with sharing expertise
77. And nally we support projects that identify and develop a portfolio of scal instruments which would promote low carbon industrial development.
We are thrilled that one of these projects is in Tamil Nadu. The study here has looked at several sectors including cement, power, automotive manufacturing, chemicals and textiles.
TThat’s why we need the world to come together in 6 short months in Paris to agree on a Global Climate Change deal that will address climate risks critical to Public Health, promote massive renewable action, have big positive impact by cutting fossil fuel subsidies and ensure that renewables cost less than coal in 10 years.
WWe need India to support a deal that will create a path towards Climate legislation further simplied clean development mechanism and drive low carbon transport and green urban development.
And India needs to be a part of the global solution in order for its growth and prosperity.
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HOW WELL PREPARED ARE BUSINESSES FOR CLIMATE CHANGE
( Eliot Whittington, Director of The Prince of Wales’s Corporate Leaders Group at University of Cambridge )
The world is changing. The weather is becoming more volatile, with the number of extreme weather events on the rise. Climate change represents the new normal: the Earth is already showing the impacts of our actions, which will continue to become more visible.
MoreMore and more businesses recognize what is at stake and are grappling with this ongoing change. Consumer goods company Unilever, for example, has estimated that extreme weather events, such as drought and ooding, cost it 200 million euros in 2011 alone. Supermarket chain Asda, meanwhile, has found that only 5% of its fresh produce supply is unaffected by climateclimate change and that 370 million euros of value across its business is at risk.
With so much at stake, companies in many industries are already responding. Utility Anglian Water, for example, launched its “Love Every Drop” campaign to encourage customers in East Anglia to save water, while reducing operational emissions and generating its own renewable energy. Meanwhile, Thames Water has developed a risk assessment process as part of its invinvestment planning to provide resilience not only to current ooding risks but also a range of possible futures.
At the University of Cambridge Institute for Sustainability Leadership (CISL), we’ve worked to communicate the implications of climate science to a business audience. There are a number of ways in which climate change can affect businesses in different industries, including rising temperatures, rising sea levels, changes in rain patterns, shrinking glaciers and acidifyingacidifying oceans. As these impacts become more dramatic, we expect there will be increasingly ambitious policy responses.
Responding to riskOne industry highly attuned to climate change is insurance. CISL works closely with ClimateWise, a group of more than 30 major insurance companies, which warns that if left unchecked, climate change will render large swathes of the economy uninsurable.
Another area that will be affected by climate change is energy. To keep global warming below two degrees and retain a climate with some degree of stability, the Intergovernmental Panel on Climate Change agrees that the additional investment required in energy supply alone could range from $190-900 billion.
ButBut while the scale of the challenge is daunting, investment carries a return, and there are clear commercial and social benets from taking action. The recent New Climate Economy report estimates that somewhere between 50-90% of the actions required have benets that outweigh their costs. For example, better-planned, denser cities have a lower carbon footprint,footprint, but also lower running costs and better public health. On the other hand, some major investments in new technologies only have climate payoffs, such as the development of carbon capture and storage technology.
CISL is working with business leaders to help make this case in a practical manner. For example, we’ve tried to demonstrate that safeguarding “natural capital” like water, forest and soil in business supply chains from the impacts of climate change reduces costs, protects supply, enhances brand and even generates revenue.
Smart city development policies can address climate change-related issues, such as making cities prepared for flooding, and, if done well, make cities more healthy and livable.
This photo shows Queens Plaza in New York.
Eliot Whittington
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policies so they align with their corporate commitments of preparing for climate change?
TThe Prince of Wales’s Corporate Leaders Group, also hosted by CISL, is gathering business leaders from across Europe to call for a robust climate agreement. Individual business action is important, but by standing side by side with others from a wide range of sectors, the progressive business voice is stronger and louder than ever.
WWorking with partner organizations from around the world in the We Mean Business coalition, the progressive business presence is increasingly being felt across the globe. This voice is calling for Paris to set a long-term global goal of net zero emissions, deliver an effective carbon price to drive emissions down and investment into new low-carbon technologies, and ensure there are clear rulesrules and accountability to propel progressively stronger climate action.While some are demonstrating leadership, too many companies are unprepared for climate change and too concerned with the likely short-term impacts of action. They should look up from the oor and speak up about the importance of mitigating risks and seizing opportunities ahead.
The alternative to globally coordinated climate action is not lack of action; it is uncoordinated, piecemeal, stop - start responses that will prprove more expensive, harder for businesses to manage and less effective.
Long-term thinkingCompanies who see themselve as gearing up for climate change should ask themselves one thing: how are they going to inuence government
Policy responses
CompaniesCompanies in all industries will need to respond to and manage the risks from more extreme weather events. However, for many companies climate change can lead to new markets and new opportunities. Increasingly, businesses are nding commercial returns in services that provide better energy efciency, such as LED lighting, smart electricity metering or home insulation, or lor low-carbon energy sources solar and wind.
And the quickest and simplest way to unlock these opportunities is clear and bold government policy. Too often we discuss climate actions as if the question is “if” we will act, but it really is a matter of “when” and “how.”
The most far-sighted businesses are those that realize this and are actively taking part in efforts to shape this conversation and call for a well ordered and business-friendly response to the risks of climate change.
MaMany people in industry expect the UN climate talks in Paris in December to be pivotal. If successful, these talks will provide an international deal that creates a clear signal to investors and businesses about the shape of the future they need to invest in.
WWe’ve been here before, of course, with Copenhagen in 2009, where world leaders were meant to provide the breakthrough leadership that put the world on a path to a low-carbon future. However, the talks descended into backbiting and confusion, and the result was too tentative and unclear to create the condence and certainty required.
WWe cannot let this happen again; business needs certainty, stability and direction to plan ahead – not confusion or the ever-rising costs of unaddressed climate change. A strong international agreement on climate change is almost certainly the single action that, more than anything else, can help galvanize action and keep the costs of responding to climate change down.
Motivations for business to decarbonize. We Mean Business Coalition
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Climate Change: How Small Businesses Can Reduce Their Risks
When Hurricane Sandy lashed the east coast of the United States in October-November 2012, innumerable small businesses had to close shop. Some 20,000-30,000 of such establishments went out of business practically in the blink of an eye.
Disasters,Disasters, especially those linked to climate change, don’t spare anyone. And small businesses are no exception. The Small Business Majority and the American Sustainable Business Council (ASBC) released a report a year later pointing towards the dangers that small businesses face. It asserted that 25 per cent of
rich corporations. The report, therefore, urged small businesses to develop one, possibly in coordination with other small businesses.
HuHurricane Katrina, earlier in 2005, had probably wreaked more havoc, but in comparative terms, awareness about climate change and disasters had been relatively low. This 2013 report, however, made a lot of people see reason. Within a year, opinions had changed considerably.
AA Washington Post-ABC News poll in June 2014 found that 70 per cent of Americans felt the government should place limits on greenhouse gases from existing power plants, and 63 percent supported cutting emissions even if it raised their energy bills by $20 a month.
small businesses take a fatal blow in big disasters – they don’t live to see another day.
InIn fact, small businesses are more vulnerable to disasters than big corporations. They are, unfortunately, also the least inclined to be prepared.
SmallSmall businesses hardly ever have a disaster plan worth the name in place. With so much negotiations taking place at the highest levels, it is as if climate change affects only
An NBC/Wall Street Journal poll around the same time yielded similar results, with 67 per cent supporting the Environment Protection Authority’s move to cut emissions from existing plants.
TThe ASBC too released its own ndings from a survey in June 2014. Eighty-seven per cent of business owners named one or more consequences of climate change as potentially harmful to their businesses.
Fifty-three per cent of companies thought extreme weather has, or will have, negative impact on their
weather has, or will have, negative impact on their businesses. Many (39 per cent) of businesses said they would prefer to accept a 10 per cent increase in energy costs rather than accept the consequences of climate change. Another 35 per cent said “neither”“neither” or “don’t know”; only 25 per cent said they would rather suffer the consequences of climate change than pay 10 per cent more.
Climate change isn’t an issue there now because it can wipe businesses
out with one hurricane. It is so because it can be progressively harder for companies to even operate normally.
So, what is it that small businesses can do to reduce risks? The ASBC suggests four small measures that small enterprises can integrate into their business plans:
(i)(i) Identify a business continuity plan. Such a plan will incorporate risks of climate change impacts that are specic to their businesses. Supply chain interruptions, and losses to critical infrastructure, are possibilities that one needs to keep in mind.
(ii)(ii) Partner with local authorities. Partnering with state and local authorities can serve as a channel of information ow. These lead to climate-preparedness actions.
Climate change isn’t an issue there now because it can wipe businesses out with one hurricane.
Subir Ghosh
( Subir Ghosh, www.subirghosh.in is a Bangalore based journalist and researcher )
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business owners have been able to maximize revenue by capitalizing on climate-related opportunities.
Responsible for creating two out of every three new jobs over the past 20 years, small businesses will continue to play a vital role in coming years to drive our nation’s economy.”
TThat’s how important small businesses are. The World Trade Organization (WTO) estimates that about 60 per cent of all employees in developing countries work in micro and small businesses.
MSMEs (micro, small and medium enterprises) in India account for more than 80 per cent of the total number of industrial enterprises.
ItIt is estimated that in terms of value, the sector accounts for 45 per cent of the manufacturing output
The ASBC report had both a word of caution, as well as stressed on the importance of small businesses: “Given their high level of exposure to extreme weather events, small businesses must recognise both their vulnerability to these extremes andand their role as critical participants in national climate change preparedness and planning.
While climate change has typically driven business owners to strategize around minimising loss, some small
(iii) Use education and outreach. Encouraging small businesses to share their experiences and communicate the results of their implementation efforts is essential to raise awareness of the potential impacts of extreme weather conditions.
(iv)(iv) Seek input from community. Small businesses and the communities in which they operate are inextricably linked. The health of one has an effect on the other. Coordination and planning can help sustain less economic damage and recover faster from extreme weather events.
and 40 per cent of the total export of the country and employs over six crore people.
WWeather disasters don’t just strike the United States; people living in a country that was affected by the 2004 Indian Ocean tsunami should know. And it is also not that the subject remains altogether untouched in India – it is, however, true that the issue does not get as much prominence in this country. There are reports to fall back on, good ones at that.
TThe MSME Umbrella Programme in India, funded by the
study, ‘Facing the Impacts of Climate Change. Business Risks for SMEs in India’ which analysed the climate change impacts and adaptation needs of Indian SMEs.
The study rued that “most Indian companies have not yet begun to understand how climate change will affect them.
TThis is all the more true for India’s MSMEs: For most of them it is a higher priority to manage immediate challenges instead of long- or term risks.
AtAt the same time, MSMEs are highly vulnerable to climate risks as they often lack the nancial resources to endure even a single rupture in supply or demand, caused for instance by an extreme weather event or a new environmental.
German Federal Ministry of Economic Cooperation and Development and in partnership with the Union Ministry of Micro, Small and Medium Enterprises and the Small Industries Development Bank of India (SIDBI), has taken up the task of strengthening SME’s capaci-tiesties with regard to climate change ad-aptation.
In 2012, the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) and SIDBI, supported by German consultancy adelphi, published the
Responsible for creating two out of every three new jobs over the past 20 years.
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FINANCIAL VIABILITY FOR ROOF TOP SOLAR THERMAL PROJECTS IN INDIA
Summary
BBased on empirical data available from 3 installations in South India, we would be analyzing the nancial viability of ETC based Roof Top Solar Thermal Systems for Low temperature Industrial Process Heating applications. The analysis will be based on fuel prices and cost of commercial debt nance currently prevailing in India.
SolarSolar thermal; Low temperature applications; Industrial Process Heat; Financial viability; IRR; Cost per KWH;
1. Base Data
TThe base data is from Factory 1 (630 KW), Factory 2 (240 KW) and Factory 3 (120 KW) – 3 manufacturing companies in South India, that have implemented ETC based Roof Top Solar Thermal systems for their pre-treatment process. These projects were commissioned in 2012, 2013 and 2014 respectively.
TThese systems are designed to deliver heat directly in to the customer’s manufacturing process through a heat exchanger, using closed loop circulation of heat transfer medium from roof top collectors.
Instrumentation and Control systems with solenoid valves are used to record as well as manage energy delivery.
TThe system will switch to solar mode during sun-shine hours and switch back to their existing fuel based systems during non-sun shine hours.
AtAt each site, the Kilo Calories generated and delivered by the system is measured using the inlet and outlet temperature at the heat exchanger where the solar system integrates with the customer’s process. (combined with the ow rate of the medium). From this the daily, monthly and annual generation is calculated.
TThe average no. of days where the solar system is generating energy is 315 days. The remaining 50 days is lost due to rain / cloud conditions and occasional shut down of the system for maintenance (7-10 days per year).
The average annual generation per KW installed is between 2000-2150 KWH. Out of this the billable KWH is in the range of 1450-1550 KWH per KW installed.
TThis is because, there is a threshold temperature agreed with each customer above which the energy delivery becomes billable. So, for all the nancial viability calculations below, the Annual Billable KWH per KW has been taken as 1500, delivered over 300 days in a calendar year.
TThe no. of days of normal manufacturing (when the energy delivered by the solar system is utilized by the factory), varies from 200 days per year to 300 days per year.
TThis is a factor that is dependent on the market demand for customer’s products and their production schedule. This factor has been used as a variable in the forthcoming analysis.
TThe fuel used by Factory 1 is Furnace Oil, with average price of Rs 40 per Litre. Factory 2 uses Diesel whose average price is Rs 55 per litre. Factory 3 uses LPG, and its average price is Rs 75 per KG.
TThe conversion from Solar KWH to Fuel litres / kgs is done using the practical caloric value of each fuel. This is taken as 9 KWH per Litre for Furnace Oil, 10 KWH per Litre for Diesel and 11 KWH per KG.for LPG.
The average cost of the project varies from Rs 37000 per KW to Rs 44000 per KW, depending on the temperature required and size of the project.
FFor our calculations the cost assumed is Rs 40000 per KW. The cost of debt funds for a 7 year loan is 13%.
The 80% accelerated depreciation and income tax benet works out to be Rs 10,720 per KW. No government subsidy is applicable at present.
Bhoovarahan Thirumalai,
( Bhoovarahan Thirumalai, Chairman, SICCI Energy Committee )
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2. The Project Cost and Cash outow (All money values are in Rs INR)
2.1. Cost per KWH
At a billable KWH of 1500 KWH per KW, the cost per KWH during the rst 7 years is Rs 5.06 (including maintenance). After 7 years, this will become Rs 1.10 per KWH (Maintenance only).
2.2. Fuel Savings
TThe Fuel Equivalent of the Billable KWH and the corresponding Rupee value of the saving is shown below: The actual savings will reduce if the no. of days of normal manufacturing is less than 300 days as shown below.
2.3. NPV @ 13%, 20 Years (Financial Viability)
The NPV is calculated on the net cash ows (Maintenance, EMI, Fuel Savings) for 20 years. The variables are fuel price and normal manufacturing days per year. Fuel price was assumed constant for 20 years
2.5. Cost per KWH on Lease Model
SomeSome nancing institutions and third party investors (in technical collaboration with Solar Thermal project developers) offer 20 year lease options to customers who do not want to own the asset in their books. The price offered to customers currently is Rs 6.00 per KWH including maintenance with an escalation of 10 paisa per year.
SinceSince this freezes the energy cost for 20 years with zero investment, it will be viable for customers to go for this, irrespective of what fossil fuel they burn. The current cost of fossil fuel on per KWH basis will be Rs 4.40 (Furnace Oil), Rs 5.50 (Diesel) and Rs 6.80 (LPG)
3. Conclusion
Based on actual data from 3 live installations in South India, and based on prevailing fuel prices and nancing cost, we nd that ETC based Roof Top Solar Thermal Systems are viable for low temperature industrial process heating applications (60-120 Deg C), even when a) there is no government subsidy and b) they are funded by commercial nance such as 7 year debt or 20 year lease.
Cost per KW of the project
Accelerated Depreciation Benet
Net Investment
40,000
10,720
29,280
Loan EMI for 7 Years at 13% per month
Annual EMI outow (for 7 years only)
Maintenance Fee @ 3% of Project cost
533
6392
1200
1500 KWH/Year KWH / L or Kg Equiv L/Kg Price 300 days 250 days 200 days
FO
Diesel
LPG
9
10
11
167
150
136
40
55
75
6,667
8,250
10,227
5,556
6,875
8,523
4,444
5,500
6,818
NPV 300 Days 250 Days 200 Days
FO
Diesel
LPG
7692
18814
32704
-113
9155
20730
-7919
-504
8756
17
China has become a popular target of environmental ire, drawing criticism for its soaring carbon emissions and perceived intransigence during climate negotiations.Nonetheless, an easy target isn’t always a legitimate one. The charges frequently levelled at China mask the country’s historic, and I would argue instructive, efforts to mitigate climate change. Consider the tenor adopted by Chinese leaders on the issue, especially compared toto the United States, the world’s second largest and by far the highest per-capita polluter. Capitol Hill remains the stage for a kabuki theater of climate denialism and plutocratic (or should it be “pollutocratic”?) dealings with industry. Beijing, for all the alleged sins of its autocracy, has made addressing climate change central to its governance over the coming decade and beyond.In March of this year, the concept of “ecological civilisation” (sheng tai wen ming), a society that balances economic needs with environmental imperatives, was written into the ruling party constitution. Concurrently, both the recently retired Hu-Wen leadership and the newly inaugurated Xi-Li administration have repeatedly emphasised China’s commitment to low-carbon development.
TThe key to understanding China’s climate change efforts is the Five-Year Plan, the rather Orwellian-sounding document that serves as a blueprint for public policy. In the current, twelfth, Five-Year Plan, China aims to decrease energy intensity by another 16% and carbon emissions intensity by 17%. The eleventh Five-Year Plan, which covered 2006 to 2010, set out to reduce the economy’s energy intensity by 20% - an ambitious targettarget given the rapid rate of GDP growth and soaring resource demand. The achieved level of 19.1% fell only a sliver short.In fact, in the previous four instances in which an energy intensity target was set in the Five-Year Plan, they were all met, and sometimes overachieved by a wide margin. There has also been notable progress on other low-carbon fronts. Between 2000 and 2010, for example, China’s forest cover increased from 16.6% to 20.4%,20.4%, enlarging an important carbon sink. The government plans to increase the country’s forests by another 12.5 million hectares by 2015.
China has also taken the international lead in sustainable power. In recent years, the country has been the world’s largest investor in renewable energy, investing $52 billion in 2011 alone. China is the world’s largest producer of solar photovoltaic panels and wind turbines. An excursion to the northern province of Inner Mongolia, for instance, is likely to bear witness to landscapes bristling with windmills. As Lord Nicholas Stern, chairman of the UKUK’s Grantham Institute, has commented, “China is well placed to lead the low-carbon industrial revolution and reap the great benets it offers beyond the fundamental gains from reducing the risks of climate change.” In doing so, China could also set an important example for other emerging economies.
China has also taken the international lead in sustainable power. In recent years, the country has been the world’s largest investor in renewable energy, investing $52 billion in 2011 alone. China is the world’s largest producer of solar photovoltaic panels and wind turbines. An excursion to the northern province of Inner Mongolia, for instance, is likely to bear witness to landscapes bristling with windmills. As Lord Nicholas Stern, chairmanchairman of the UK’s Grantham Institute, has commented, “China is well placed to lead the low-carbon industrial revolution and reap the great benets it offers beyond the fundamental gains from reducing the risks of climate change.” In doing so, China could also set an important example for other emerging economies.
All this is not to say that China’s climate change efforts have been unalloyed triumphs, or to absolve the government of future responsibility in international negotiations. The environmental problems facing China are among the toughest in the world, and this, without doubt, has generated much of the domestic impetus behind current initiatives. The immense international pressure on China to curtail its emissions has addedadded additional motivation. But criticism must be balanced with a clear-eyed view of China’s achievements, which are espe-cially notable coming from a country whose per-capita GDP still lies somewhere between Azerbaijan and Turkmenistan.US President Barack Obama’s recent “climate action plan” has signaled his administration’s decision to forgo climate change legislation or any other sweeping federal policies. So at a time when the United States has relinquished the mantle of global environmental leadership, China’s achievements and continuing efforts set a powerful example to be followed by developing and developed countries alike.Nonetheless, continued cooperation bebetween the world’s two largest emitters and economies remains the crucial pivot for international climate change efforts. The success of Sino-US talks on energy and emissions mitigation this year is a step in the right direction. Indeed, the notable progress between the two countries could serve as a robust platform for the development of other aspects of this important bilateral relationship. Mutual recognition, of course, will be an indispensable element of this process.will be an indispensable element of this process.
In his book Mother Earth and Mankind, celebrated historian Arnold Toynbee wrote that if the Chinese remain mindful of their past and future, “they may do a great service, not only to their own country, but to the whole of mankind at a critical stage in mankind’s enigmatic course.”In facing the depredations of global climate change, China has already done yeoman’s service. If the international community is to forge ahead with goodwill on this enormous challenge, we should not deny China its justly-earned plaudits.
Tong Wu
( Tong Wu, Research Fellow at Tsinghua University )
CHINA CAN TEACH THE WEST ABOUT TACKLING CLIMATE CHANGE
18
Adani court case leaves the climatechange question unanswered
Samantha HepburnProfessor,
Faculty of Business and Law at Deakin University
The Federal Court has overturned the federal environmental approval of Adani’s A$16.5 billion coalmine project in central Queensland. The court ordered the approval of the Carmichael mine licence in the Galilee Basin to be set aside, meaning that Adani will have to re-apply for the coal licence and the federal environment minister Greg Hunt will have to re-approve the application. Sue Higginson, principal solicitor of the Environment Defenders Ofce NSW, said that the decision of the Federal Court was “based on a failure by the minister to have regard to the conservation advices for two federally listed vulnerable species” – the yakka skink andand the ornamental snake. The lawsuit also alleged a failure “to consider global greenhouse emissions from the burning of the coal”. The Carmichael mine received federal environmental approval in July 2014. Greenpeace has estimated that the mine, operating at full capacity, would extract enough coal to generate 128 million tonnes of carbon dioxide emissions every year, equivalent to about a quarter of Australia’s current total emissions from fuel combustion.
So what does the order mean for the Carmichael mine?
A skink and a snakeAs I’ve explained previously on The Conversation, the Mackay Conservation Group brought an action to the Federal Court alleging that minister Hunt failed to take into account considerations set out in the Environment Protection and Biodiversity Conservation (EPBC) Act. The court found that failure of the minister to take account of two endangered species specically listed in the EPBC Act – the yakka skink and the ornamental snake – was sufcient for it to be overruled. In reviewing the endangered species the minister was not presented with the correct conservation documents which meant that any conditions that were included in the apprapproval may have been insufcient to satisfy the requirements of the EPBC Act. One of the specic aims of the EPBC Act is to ensure that endangered species are properly protected and the endangered species list is specically identied as a matter of national environmental signicance. There are also concerns that the mine will affect other vulnerable species - black-throated nch - and ancient groundwater springs.
Ignoring greenhouse gasesHowever, one of the other considerations raised by the Mackay conservation group – the greenhouse gas emissions released from burning extracted coal overseas – was left unresolved by the court. The EPBC Act specically requires the principles of ecological sustainable development to be taken into account when assessing matters of national environmental signicance. Whether this includes consideration of the climate change implications for the Great Barrier Reef National Park that may ow from the increase in greenhouse gas emissions from such a coal project was not resolved. The environment minister is required under the EPBC Act toto give regard to the social and economic impacts of issuing a coal licence in such an environmentally signicant area. In making this assessment, the minister is required to consider the principles of ecologically sustainable development. This means that the minister must evaluate not only how the land will be impacted, but also broader issues relevant to intergenerational equity. The EPBC Act also specically mandates that the precautionary principle be taken into account in making decisions and approvals in areas of national environmental signicance, like the Great Barrier Reef National Park. Previous decisions of the Federal Court in thisthis regard have held the impact of greenhouse gas emissions from burning coal does come within the scope of the EPBC Act and should be assessed, despite the fact that emissions are difcult to measure and that climate change is caused by a range of different contributors. The focus is the extent of the greenhouse gas emissions rather than the location where they are emitted. Climate change is a global rather than a domestic concern. The impact of climate change is one of the biggest threats to the preservation of the Great Barrier Reef.A “statement of reasons” issued by minister Hunt to the Mackay Conservation Group doesdoesn’t refer to the impact of greenhouse gas emissions from burning the coal outside Australia. It appears the minister felt that the direct emissions were properly controlled by strategies proposed in accordance with the National Greenhouse Gas Reporting requirements.
What does it mean for Adani?The decision by the Federal Court to overrule the licence means that the Federal Court felt that the exercise of power by the Federal Minister in issuing the coal licence to Adani was improper. For Adani to continue with its coal project it will need to re-apply for the coal licence and the Federal Minister must re-approve the licence taking proper account of the mandated relevant considerations set out within the EPBC Act. This is likely to involve a more detailed evaluation as to how the coal project, should it proceed, will impact upon the federally listed endangered species and to include robust conditions regarding the future management of those species.species. Hopefully, any future assessment will also involve a more detailed evaluation of the impact of greenhouse gas emissions at both the global and domestic level. This is an increasingly crucial concern given the importance of mitigating fossil fuel emissions in response to climate change imperatives.
19
PRESS COVERAGE
IEEE WOMEN IN ENGINEERINGINTERNATIONAL LEADERSHIP SUMMIT 2015
“BEYOND YOURSELF – LEVERAGING YOUR STRENGTHS AND BREAKING BARRIERS”
at Hotel Greenpark, Vadapalani, Chennai
10 am on 11th & 12th September 2015
The Southern India Chamber of Commerce & Industry
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