Resource policy: old wine in....


Indian industry is notorious on account of its lower efficiency compared to other industrial economies.

For instance, not only its material productivity is low compared to global average but also its recycling rate lags at 20-25% vis-à-vis of as high as 70% in developed countries.

Moreover, its resource extraction rate is 1,580 tonnes per acre which is much higher than the world average of 450 tonnes per acre. We have the privilege of being the third highest carbon dioxide (greenhouse gas) emitter.

And, we have a high import dependency of many critical raw materials. Under these circumstances, it is laudable effort by the Ministry of Environment, Forests and climate Change (MoEF&CC) to evolve a national policy – “National Resource Efficiency Policy, 2019 – Charting a Resource Efficient Future for Sustainable Development  2019” (NREP 2019). The aim of this policy is to mainstream resource efficiency efforts in select sectors and seeking suggestions on this policy from general community. Indian economy is growing and its Gross Domestic Product (GDP) is at $2.6 trillion, and material consumption stands at 7 billion tonnes in 2015. It is expected to double by 2030.

Extraction of materials is bound to result in wide range of environmental consequences such as acidification, climate change, eutrophication, environmental pollution or eco-toxicity and many more such adverse impacts which may result in making earth as little less hospitable.

It is a welcome initiative by MoEF&CC to develop a national policy on resource efficiency guided by five principles -  (i) reduction in primary resource consumption to ‘sustainable’ levels, (ii) creation of higher value with less material through resource efficient and circular approaches, (iii) waste minimisation, (iv) material security, and (v) creation of employment opportunities.

Most importantly, this policy aims to foster `circular economy’ approach and move away from `linear economy’. Creation of an institution - National Resource Efficiency Authority (NREA) - to provide for regulatory provisions and an organisation – National Resource Efficiency Board (NREAB) - to implement stipulations to be issued from time to time by the NREAB are envisaged by this policy.

In addition, to achieve effective level of implementation and desired results, participation and collective action of all major stakeholders varying from government agencies, industry, policy makers, academia, civil society organisations including non-profit institutions, think tanks and business groups, consumers, and technology developers is also encouraged through NRAP 2019. Increase in resource efficiency naturally leads to more output as products/services using less input and reducing waste generation as well. It creates a more competitive economy, addresses resource scarcity issues, and helps reduce the associated environmental impacts.

Further, adoption of circular economy approach helps to keep resources in use for as long as possible and extract the maximum value so as to limit the extraction of natural resources to maximum possible extent.

As a first step, NREP 2019 is planning to adopt a three-year action plans to achieve resource efficiency in select sectors and track the progress with the help of monitoring frameworks.

Accordingly, for the first Action Plan from 2009-2012, seven sectors are selected - Automotive, Plastic Packaging, Building and Construction, Electrical and Electronic Equipment, Solar Photo Voltaic, Steel, and Aluminium. Strategic, suitable but ambitious action plans and sector specific targets to be achieved at the end of year 2022 have been defined and comments/suggestions are invited on this policy document. NREP 2019, like any other policy document by government, has drawn a canvas for achieving a significant objective of promoting resource efficiency.

But a closer examination indicates more of old wine in new bottle and creation of yet another organisation to deal with in existing command and control structure. First generation of environmental management instruments like Water Act and Air Act have adopted ‘concentration based standards’ as they were easy to monitor and police the polluter.

As the cost of compliance was costlier than non-compliance, most of the industries have opted adopt shortcuts in pollution control. Second generation instruments like Ecomark, ISI Certification have failed to takeoff because of mismatch between costs and benefits and Indian Inc has stuck to its path of profit maximisation and went on reaping the low hanging fruits and ignoring the environmental externalities. 

Difficult task

Effective implementation of NERP 2019 requires a perfect synchronisation of various institutions and organisations as well. It is certainly a difficult task to achieve in Indian context as there is little coordination between the organisation and at times, jurisdiction spilling over more than one organisation. 

Over and above, the most important stakeholder is consumer and he/she is extremely price sensitive. The NREP, at least in initial years, is bound to increase the costs and consequently negative impact on market performance ultimately may dampen the spirit of this NERP 2019.

Awareness aiming the end-user and stringent complying conditions, encompassing every producer could be a few strategies that might help.

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