PDF: 2962 pages, 5.2 MB - Bay Area Council Economic Institute

Energy/Environment/Clean Technology
• End pricing rules that raise imported fuel prices to protect less efficient domestic
producers.
• Bring more rural households onto the official grid to grow the revenue base and reduce
pollution and health risks.
Weak Environmental Regulation
It should be noted that India’s system of environmental regulation, while comprehensive, is relatively
weak on the enforcement/penalty side and does not provide strong pressure on businesses
and municipalities to undertake environmental mitigation.
India’s Central Pollution Control Board (CPCB) sets policy and standards to be implemented
and enforced by State Pollution Control Boards (SPCBs), which have inspection and documentation
audit authority and can, in serious cases, close down a plant or cut off its water and power
supplies to prevent operation.
The primary recourse for SPCBs is criminal prosecution, which is rarely used, both because court
cases take so long and because offenders have been willing to pay the low maximum fines set by
law. Civil penalties are limited to injunctive relief, although a court may award limited penalties
or compensation. Another problem with current law is that no environmental impact assessment
is required in advance of an industrial project being built.
The result, according to a 2007 World Bank report, is that the compliance rate across India for
monitored industries is about 50%, and most small and medium-sized enterprises (SMEs) are not
monitored. As there are no specialized standards or programs for SMEs, most would likely be
found in non-compliance if they were monitored. Worse, corruption and bureaucracy at the local
level has compromised the inspection process in many instances. In some cases, SPCBs have
used lax enforcement as a marketing tool to attract new industrial projects. Of 250 plants surveyed
in the World Bank study, 171 said they had taken environmental abatement steps, but in
response to NGO or community complaints, not SPCB inspections.
Bay Area Connections
Bay Area companies, investors, universities and research laboratories have been at the forefront in
helping India increase energy efficiency and output and accelerate the shift to renewable sources.
San Ramon-based Chevron Corp. began selling refined petroleum products in India as
Caltex in the 1930s. In 1957, Caltex commissioned the Visakh Refinery in Visakhapatnam,
Andhra Pradesh, now operated by Hindustan Petroleum Corp. Ltd. In 1982, Chevron
signed a five-year contract to drill exploratory wells off the Gujarat coast. The Chevron Ornite unit
signed a fifty-fifty joint venture in 1989 with Indian Additives Ltd. to manufacture and market lubricant
additives. Chevron Global Lubricants has been in India since 1993 and operates blending plants
in Chennai and Mumbai. Chevron has also sold liquefied petroleum gas (LPG) in India since 1998
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