Mohanish Verma, Former PCCIT- IRS Direct Tax Provisions and Carbon Credits for a greener Economy – A global comparison and the Indian Context. COP 29 held at Baku has once again highlighted the urgent need to address the needs for regulating carbon emissions and other pollutants both in domestic and global environments as the impact on human life is becoming extremely lethal. The “polluter pays” principle since 1972 has become too mild. Stronger and fundamental reforms which are sustainable are now necessary. The focus must shift to generate resources for developing and transitioning to technologies and machineries which have zero carbon emissions. The targets to move to net zero carbon emission regime appears to be ambitious for most countries in the near future. However the mechanisms must be established to move in the right direction.
The conflict between developed and developing nations for financing and providing financial resources to move to a zero carbon era is far from being resolved. Emerging nations like India, China and Brazil are at cross roads to balance their development plans to align with the global requirements for carbon emissions. In recent times there have been rapid developments in creating a mechanism to regulate carbon emissions through carbon credits which can also being regulated and traded. In India also a new legislation has been passed (Energy Conservation Bill, 2022) for Carbon Credit monitoring and trading in line with many developed countries like USA and UK. The most polluting industries in India as per government and independent sources of research are Power, Cement, Iron & Steel, Chlor-alkali, Pharmaceuticals, Fertilizers, Refineries, Pesticides, Distilleries, Sugar, Pulp & Paper, Textile, Tanneries. On the other hand, at the global level the sectors contributing towards highest pollution levels are Fossil fuels, Agriculture, Fashion, food retail, Transport and Construction are the sectors recognized globally as contributing to high pollution levels. There are multiple financial and other policy tools through which the policies to control carbon emissions can be monitored and different countries have already initiated regulations in varying forms. Incentives through lower taxation or tax holidays for green technologies, accelerated depreciation on new machinery cheaper loans for financing from financial Institutions, subsidies for specific sectors are some specific tools adapted. It is important to identify the Sectors which contribute most to carbon emissions. Textiles, Automobile and Manufacturing of Chemicals and specific areas relating to agriculture in India need to be taken up on priority. Multiple sources of data need to be analyzed and deliberated upon for urgent action in the most urgent sectors and regions.
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