Environment Issues and other Externalities

Blowing Hard or Shining Bright? Making Renewable Power Sustainable in India

Content from the Brookings Institution India Center is now archived. After seven years of an impactful partnership, as of September 11, 2020, Brookings India is now the Centre for Social and Economic Progress, an independent public policy institution based in India.

Editor's note:

This chapter is a part of Brookings India’s edited book, “Blowing Hard or Shining Bright? Making Renewable Power Sustainable in India”  To view the preface and table of contents, click here.

Chapter Summary:

This chapter examines the link between energy and the environment, presenting depth to the obvious environmental benefits of renewable energy, in addition to other externalities such as energy security.  While always fraught with assumptions, using literature and his own calculations, he gives ranges for the externality costs of coal-based power, which then allows a more sustainable view of the price of renewable power.  For coal based power, the mainstay of power in India today, these costs can be in the same order as the nominal costs of today.  This is not to say there are no externalities to renewables, not only land use but also even carbon (especially during construction of solar panels), but these need to be in perspective.    One of the takeaways to try and internalize the externalities (e.g., through pollution taxes) is the need for better numbers on the lifecycle costs, which start with fuel extraction (mining), and extend to power plant chimney stack emissions, as well as water usage.

Ramprasad Sengupta , MA (Economics), Ph.D (Economics) is currently a Distinguished Fellow of the India Development Foundation (IDF), Gurgaon, and also an Emeritus Professor of Economics of Jawaharlal Nehru University (JNU), New Delhi, where he was Dean of its School of Social Sciences. He is also a former Professor of the Indian Institute of Management, Calcutta, and has also been a Visiting Professor/ Scholar abroad in the Universities of British Columbia (Canada), Hamburg, Kobe,  Boston, Pennsylvania, Birmingham, Erasmus at Rotterdam and Twente (Netherlands).