Mahesh Patankar ( [email protected] ) Anand Patwardhan ( [email protected] )

Mahesh Patankar & Anand Patwardhan, SJM School of Management, IIT-Bombay, February 2004

Environmental Policies and Resulting Outcomes – An Analysis of Transport Sector Case Studies in

India

Mahesh Patankar ([email protected])Anand Patwardhan ([email protected]) Shailesh J Mehta School of ManagementIndian Institute of Technology – Bombay

CMU – February 2004


Outline

Context Indian transport policy / regulatory framework Research questions and literature review Framework outline Environmental policy – technology link Technology hierarchy Framework quantification Case studies (description and analysis) Going beyond…..


Context

Sharp increase in public and private road transport, leading to higher energy use and environmental impacts(Numbers in figure – all types and entire country)

Deteriorating local air quality is a matter of concern – leads to policy response for environmental control

Increase in vehicles

24724521

9170

19152

30295

37231

0

5000

10000

15000

20000

25000

30000

35000

40000

1975 1980 1985 1990 1995 1997

Year#

of v

eicl

es '0

00

Source: MoST, India, NEERI, India

Transport sector contributes to 29 to 35 % GHG emissions in India!


Indian transport policy framework - structure

Central GovernmentMinistry of Environment &

Forests (MoEF)

Ministry of Surface Transport (MoST)

Ministry of Petroleum &Natural Gas (MoPNG)

State Government

State Pollution Control Board

Regional Transport Office


Indian transport policy framework - functions

Central GovernmentMinistry of Environment &

Forests (MoEF)

Ministry of Surface Transport (MoST)

Ministry of Petroleum &Natural Gas (MoPNG)

State Government

State Pollution Control Board

Regional Transport Office

(Designs new road projects, guidelines on vehicle industry standards)

(Sets emission standards – vehicular and ambient air quality)

(licensing and supply chain of petroleum products)

(Air quality monitoring, reports to the MoEF)

(Regulates tail-pipe emission permits)


Research goal: Understand process of policy formation, effect of alternate fuel policies and its success parametersUnderstand the differences in “success parameters” using case studies

Questions:Can the environmental policies alone ensure diffusion of clean fuel in IndiaWhat are the compelling conditions that ensure “success rate” of clean fuel policiesCan a framework be established that will act like a “policy tool”

What determines the success of policy?


Summary and gaps

Research area Main observations Example / references

Technology diffusion models describe market penetration over time

Lack of a single model that discusses tech regimes

Pry et al, 1971; Stier, 1983; Sharif et al, 1982

Technology clusters and regimes concepts define networks, and determinants

Lack of model applicable to Indian context

Rosenkopf, 1998; Kemp, 1997; Jacobsson et al, 2000

Studies in transport and energy sectors; link between env policy and technical change

Research at systemic level – opportunities for integrated solutions; lack of studies linking env policies and transport technology changes

Soares, 2001; Site, 2001; Bose, 1998


Components of framework

Hierarchical conceptualization of technology and technological change

Environmental policy

Outcomes – environmental benefits, market development

Technology diffusion, market response


Framework policy – tech change

Outcome(Environmental benefits, market, technology)

Policy stage Use stage

Ancillary infrastructure

Requires and involves technology, systems and regime

Individual decision

Public perception

Decision making

Regulators

Stage 1 Stage 2

Actors, responsible for use

Set of enablers (standards)


Framework explanation

Stage 1 – Policy stage acts as the “Policy-push” to facilitate change

An enabling stage, may not be sufficient

Stage 2 – Provides “Market-pull” to implement and achieve results of the policies

Ensures availability of ancillary infrastructure – represented as a technology regime with clearly defined determinantsDeterminants are complementary, interdependentIndividual decisions dependent on availability of ancillary infrastructure


Technology System

Technology-based regime

Technology Product / Process

Changes in end-use, in one application area, environmental benefits

Increase in infrastructure, complementing technologies, defined application area

New business, developing institutions, governing organizations, involvement of banks, defined market, complementing applications

Technology hierarchy - ancillary infrastructure

(References: Kemp 1997, Jacobsson, 2000)


Theoretical description

Technology change

Technology system change

Technology regime change

Technology regime change

Authors (Stier, 1983) (Rotmans et al, 2002)

(Kathuria, 1999)

(Geels, 2002)

Level of describing change

Micro (singe production process)

Macro (long-range societal changes)

Micro (single process – CNC machines)

Macro (long-range technology change)

Constituents of framework

Increasing share of the technology in the pulp and paper industry

Technology, economy, institutions, ecology, culture, behavior, belief system

Component supplier, user, competition in the export and domestic market, participation in fairs, exhibitions, patents disclosure

Financial network, suppliers, user and producer groups, research network, societal groups, public authorities

Examples of technology - regimes


Transport regime around a fuel

Components of regime changes

Example: Fuel use policyInspection and maintenance Retrofit standardizationInterventions by courts

Policy and standardizationIndicators: Directives and standards

Example: Lower vehicular pollutionHealth benefits

Societal benefitsIndicator: Public healthMortality

Example: Fuel availabilityEngine retrofit techniques

Technology and technology system Indicators:

Complementary technologies, regimes

Example: Infrastructure companies, user benefits, increasing businesses and investments

Developing institutions, markets

Indicators: Increase in indigenous mfg, ROI for users and suppliers


Variable What is represented Technology and technological changes

Clear, identified individual technologies, evolving complementarity in the technologies Increase in CNG network developed, average queuing time in a month (relative queuing time - compared to conventional fuel)

Policy changes and standardization

Captures the legislative directives in the proposed fuel-switching options Evolving standards in the existing products and systems

Developing markets and institutions

Share of indigenously manufactured components in the CNG supply and use Share (cost) of indigenously manufactured components in product chain Return on investment (ROI), changes over time or rate of change of net disposable income for individual operators Return on investment for infrastructure developers

Societal benefits Identified and measured environmental benefits, reduced health impacts Representation by the public interest groups and the resulting changes in the policy, infrastructure

Framework variables - quantification


Growth in use of CNG in transportation fuel

0

5000

10000

15000

20000

25000

30000

1995-96 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02

Year

Nu

mb

er o

f ve

hic

les

0

5

10

15

20

25

30

35

40

45

50

CNG taxicabs and cars CNG 3-wheelers CNG buses

Pollution test made mandatoryInstitution of Lal Committee

Taxicab owners granted an extension till March 2001

Direction to set CNG stations in South Mumbai

Higher compliance check1992 - Writ Petition in the courtBy Smoke Affected Residents’ Forum

Mumbai: A clear link evident between the court regulations and the increasing vehicles and sale

Outcome of environmental policy – Case Studies


0

2000

4000

6000

8000

10000

12000

2001 2002

Year

No.

of v

ehic

les

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

Buses - DTC Buses - Private Minibuses Private cars Taxicabs 3-wheelers

Supreme court ruling on phase Out (Buses, Autos, Taxicabs)Time limit set for Mar 31, 2001

Time extension till Sept 2001

August 2001 – Govt. directed to ensure supplyOct 2001 – DTC and school buses given time extension till Jan 31, 2002

April - Rejects plea for further time extensionDisclosure of data on reduced emissions with CNG

1995 - Writ Petition in the courtBy Mr. MC Mehta

1995 1998 2000 2001 2001 2002

Events

Year

Tracking policy and year – New Delhi


Distinct policy steps to ensure supply of CNG as a fuel

Steady increase in the vehicles converted to CNG, conversion of buses to CNG at a larger scale than that in Mumbai


Mumbai:CNG sale increased many-folds, but not sufficient to cater to the entire fleet

New Delhi:CNG sale increased many-folds, but not sufficient to cater to the entire fleet


CNG sales growth Kgs per month

0

2000000

4000000

6000000

8000000

10000000

12000000

14000000

Sep-9

9

Dec-9

9

Mar

-00

Jun-

00

Sep-0

0

Dec-0

0

Mar

-01

Jun-

01

Sep-0

1

Dec-0

1

Mar

-02

Month- year

Kgs

per

mon

th C

NG

sal

es

CNG Sales in Mumbai

0

10000000

20000000

30000000

40000000

50000000

60000000

1999 2000 2001 2002

Year

Kgs

/mon

th C

NG

sal

e



Success rate of policy / implementation - observations

- Supply constraint resulted in chaotic conditions in both the cities (media reports, CNG demand forecast for the vehicle fleet – much more than the actual supply)

- Policies alone did not provide the sufficiency condition for “use”, though it resulted in conversion / engine retrofits

- Drivers pushing CNG sales up include pricing policies resulting in economic benefits to users, lesser queuing time at the filling stations, availability of conversion kits, financing



New Delhi Mumbai

Specific policy measure Policy thrust with Court intervention

Enabling condition

Evolution of technological system Shift from import to local suppliersEvolving markets Evolution of public-private partnershipsUser benefits Economic benefits with fuel switch-over

Differences in “fleet-management”, refueling time

Evolving enterprises Corporatized public Foreign direct entities investment in a joint

venture companyTechnology / systems Similar supply chain in both cities, higher level

of quality assurance in MumbaiPolitical will Political support in both the cases


Case studies Enabling policy condition(Policy push)

Presence of ancillary infrastructure (Market pull)

CNG use in Mumbai √ √

CNG use in New Delhi √ √

Unleaded gasoline in India and Thailand

√

Multi-point fuel injection √

Case studies used in validation: CNG use in Mumbai and New Delhi, Unleaded gasoline in India and Thailand, Multi-point fuel injection

Clear evidence of interaction with the policy and a clearly identified technology regime

Discussion – case studies


- Proposed framework validated with qualitative data- Case studies in other developing countries may show

different features- Data gaps on the improvement in ambient air quality- Other factors like industrial and commercial sector

would have a bearing on improved air quality- Case studies represent “specific” fuel switching

options, for a comprehensive fuel switching policy, framework will have to be different

Limitations

Other merits of the case studies:Use in other socio-technical experiments, learning for other options in alternate fuel use


Proposed case studies

1. Passive solar in developing countries

2. Rainwater harvesting in India

3. Green buildings program in Asia

Going beyond….

Mahesh Patankar ( [email protected] ) Anand Patwardhan ( [email protected] )

Documents

Transcript of Mahesh Patankar ( [email protected] ) Anand Patwardhan ( [email protected] )