Hidden subsidies in power, paper industries

Hidden subsidies in power, paper industries IF SO-CALLED ecological subsidies were halted in India, the true cost of paper would double immediately and the price of thermal power would soar an electrifying 60 per cent. These are the findings in a study __ the first of its kind in India -- sponsored by the Administrative Staff College of India (ASCI), Hyderabad. The findings, based on 1988-89 data, proves conclusively that ecological subsidies are quite high.

The rationale for the inclusion of ecological subsidies into the cost of the product or service is to make the industry internalise the cost of its consumption of natural resources.

The paper and pulp industry has a high impact on the environment in two ways: depletion of forests with resultant ecological imbalances, and water, air and noise pollution. Therefore, the true cost of raw material use (including wood and water), depletion if any of these resources and pollution control must be taken into account and when this is done, the cost increases by more than 100 per cent.

In addition to the dust generated while manufacturing paper, paper-making involves using chemicals for bleaching and other activities and then discharging them as water effluent. Though the larger mills treat such effluents, some pollutants still escape.

Ecological side-effects of thermal power generation occur downstream and upstream and they include carbon dioxide and sulphur dioxide emissions, land degradation, waste disposal, radioactive waste accumulation in flyash and thermal pollution of the environment.

The ASCI study, by B Bowonder, S S Arvindan and B Venkat, attempted to estimate the true cost of production taking into consideration such costs as land reclamation, dumping, afforestation, pollution control, ash disposal and reuse. (Table 2) The study noted that when calculating the real cost of power generation, the figures must include the money required for additional environmental protection measures, such as flue gas desulphurisation, beneficiation of coal, conservation of top soil, laying polyethylene sheets in ash ponds and afforestation of mined areas. The stack emission after combustion of coal is highly toxic and can severely affect the health of those exposed to it. Carbon dioxide levels in the environment are also increasing due to fossil fuel combustion.

The study points out the main approach to environmental compliance today is to enforce government regulations. New approaches -- both technical and fiscal -- call for polluters to be required to pay more if the quantity and not merely the concentration of their pollutants is high, utilise or recycle wastes such as flyash and pay emission charges or resource extraction charges to finance improvement of environmental standards. Finally, non-compliance or violation of environmental standards and regulations should be dealt with stringently.

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