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Baseline analysis of existing incentive mechanisms forindustrial wastewater management to effectively combatenvironmental pollution

Gap Assessment

Presentation structure

●Assignment objectives

● Incentive mechanisms

●Preliminary evaluation

●Way forward on the assignment

Assignment Objective

National Level State Level (Uttarakhand)

Expected outcome

Indicator 1

Indicator 2

Two additional incentive mechanisms to pro-mote key elements ofsustainable industrial production, in particular wastewatermanagement have been included in the strategic planning of publicagencies of the Indian government on the national level (viz. MoEFCCand CPCB)

Five additional incentive mechanisms to pro-mote key elements ofsustainable industrial production, in particular wastewatermanagement have been included in the strategic planning of publicagencies of the Indian government on the national level (viz. SIIDCULand SIDA)

An inventory and gap analysis of the existing incentive mechanismsfor sustainable industrial production, in particular to waste watermanagement are available for acceptance of MoEFCC and CPCB

An inventory and gap analysis of the existing incentive mechanismsfor sustainable industrial production, in particular to waste watermanagement are available for acceptance of SIIDCUL and SIDA

Five incentive mechanisms to promote sustainable industrialproduction by companies or industrial area administrations (focus onwaste water management) are agreed by the stakeholders (viz.MoEFCC and CPCB).

Five incentive mechanisms to promote sustainable industrialproduction by companies or industrial area administrations (focus onwaste water management) are agreed by the stakeholders (viz.SIIDCUL and SIDA).

Base value Target value Base value Target value

Base value Target value Base value Target value

Stock-taking

Gap analysis

Incentive mechanisms

0

0

1

1

0

0

1

1

3 5 0 5

Overall approach and phasing

1

Baseline / Inception

2

Gap assessment

3

Recommendations

• Institutional stakeholder map;

• SEIP II program;• Broad menu of options of

incentive mechanisms;• Existing incentive

mechanisms;• Case studies on potential

best practices / new mechanisms.

• Mapping the gaps in existing incentive framework;

• Preliminary screening of the other potential incentives that can be applied;

• Shortlist of additional incentive mechanisms for detailed assessment;

• Review of existing incentive mechanisms and potential changes;

• Stakeholder consultations.

• Detailing and profiling the additional / new incentives;

• Detailing and profiling the changes to existing incentive mechanisms;

• Prerequisites for implementation of the proposed incentives• Institutional• Legal / regulatory• Monitoring /

enforcement

Stakeholder mapping

Government Parastatals/ autonomous bodies Private sector

National

MOEFCC

Ministry of MSME

Ministry of Textile

Ministry of Steel

DPIIT

CPCB

National Green Tribunal

NMCG

NRCD

BIS

Various Industry associations

Developers / technology advisors – Ion

Exchange India, VA Tech Wabag, Ramky etc.

State

Department of Industries

Department of

Environment and Forests

UEPPCB

SIIDCUL

SIDA

Directorate of Industries

State Ganga Committee

SPMG

SIIDCUL Manufacturers Association of

Uttarakhand (SMAU)

SIIDCUL Entrepreneurs Welfare Association

(SEWA)

SIIDCUL Industrial Association (SIA)

Association of Pharma Manufacturers (APM)

Local Chapter of PHD Chamber

Local Chapter of ASSOCHAM

Local -

Regional Offices, UEPPCB

Regional Offices, SIIDCUL

District Ganga Committee

District Industries Center

SK UEM Water Projects (CETP Operator)

Industrial estate-specific associations

Existing incentive mechanisms

Sr.

No. Incentive scheme/Type of Incentives

Fu

nd

s / G

ran

ts /

Su

bs

idy

Dep

os

it r

efu

nd

sy

ste

m

Tra

din

g r

eg

ime

s

Te

ch

nic

al

as

sis

tan

ce

Aw

ard

s /

Pro

du

ct

rec

og

nit

ion

Po

llu

tio

n c

ha

rges

/

tax

es

Lia

bil

ity

1 Rajiv Gandhi Environment Award for Clean Technology

2 Assistance for Abatement of Pollution and Environment Policy & Law

3 Eco-mark

4 National Award for Prevention of Pollution

5 Industrial Infrastructure Upgradation Scheme

6 Credit Linked Capital Subsidy Scheme (CLCSS)

7 Micro & small enterprises cluster development scheme

8 Integrated Processing Development Scheme (IPDS)

9 Financial Support to MSMEs in ZED Certification Scheme

10 Cleaner Production Award

11 Award scheme for secondary steel producer

12 Industrial Pollution Abatement through Preventive Strategies

13 Common Effluent Treatment Plant (CETP)

Incentive mechanisms

Types of incentives

1. Financial

1. Price rationing

2. Subisidies

3. Quantity rationing

4. Liabilities

2. Non-financial

1. Ease of doing business

2. Marketing incentives

3. Voluntary covenants

Types of incentives

Incentive category Incentive type Description

Financial

Price rationing Environmental cost is transferred to the industries by pricing the extent of pollution

Subsidies Support is provided to industries to help them on pollution control

Tradable permits The overall pollution level is capped but industries can re-distribute extent of pollution through trading of their permits

Liabilities Industries pay an upfront refundable deposit, burden of proof of compliance is with the industries

Non-financial

Ease of doing business Reward in the form of reduced compliance requirements

Marketing incentives Reward in the form of recognition

Voluntary covenants Partnerships between industry & government for mutually agreed outcomes

Price rationing

●Options: Water charges, effluent charges, ambient charges, product,

charges

●Legislation: May require modification

●Potential for conflict: Industries may resist process changes and potential

financial impact

● Issues related to monitoring: This requires reliable & continuous

monitoring of effluent and wastewater discharge

●Precedence for use of the instrument: There is no precedence for price

rationing in India, but CPCB has introduced continuous online effluent

monitoring

Subsidies

●Options: Fee discounts, rebates, capital grants

●Legislation: No legal amendments are required

●Potential for conflict: Opposition from environmental groups on polluter

pays principle

● Issues related to monitoring: Periodic monitoring of construction progress

& post-commissioning monitoring of operations

●Precedence for use of the instrument: CETP Scheme, Modified IIUS,

IPDS, etc.

Quantity rationing

●Options: Tradable water permits, tradable effluent permits

●Legislation: May require amendment

●Potential for conflict: Industries may resist process changes and potential

financial impact

● Issues related to monitoring: Requires continuous effluent vis-à-vis

individual permit allowances for each polluter

●Precedence for use of the instrument: No precedence in India

Liabilities

●Options: Deposit-refund schemes, environmental bonds

●Legislation: May require amendment

●Potential for conflict: Industries pay resist front-ended financial impact

● Issues related to monitoring: Reliable monitoring systems to verify claims

made by industries

●Precedence for use of the instrument: Liability estimated & imposed by

NGT and current practice of collected bank guarantee from non-complying

industries

Ease of Doing Business

●Options: Extension in consent period, reduction in inspection frequency

●Legislative background: No legal amendment required

●Potential for conflict: There may be opposition over relaxation in

environmental monitoring

● Issues related to monitoring: Reliable monitoring systems to verify claims

made by industries

●Precedence for use of the instrument: Extension in consent period

provided in Gujarat

Marketing support

●Options: Certification/ rating, awards, preferred procurement

●Legislative background: No legal amendment required

●Potential for conflict: Little or no potential for conflict

● Issues related to monitoring: Reliable monitoring systems to verify claims

made by industries

●Precedence for use of the instrument: Eco Mark scheme, ZED

certification, Awards for pollution control, etc.

Voluntary covenants

●Options: Corporate charters, eco-industrial parks, CSR

●Legislative background: No legal amendment required

●Potential for conflict: May be some opposition over objectivity of process or

due to any relaxations which go against the polluter pays principle

● Issues related to monitoring: Reliable monitoring systems to verify claims

made by industries

●Precedence for use of the instrument: Corporate Responsibility for

Environment Protection

Preliminary evaluation of incentives – Ease of implementation

Incentive mechanism Legislation Resistance Monitoring Precedence Aggregate

Price rationing

Subsidies

Quantity rationing

Liabilities

Ease of doing business

Marketing incentives

Voluntary covenants

Stakeholder perceptions

Perceptions

MO

EF

CC

CP

CB

Ch

am

be

r o

f

Co

mm

erc

e

SII

DC

UL

UE

PP

CB

SM

AU

Incentives are required for meeting minimum standards No No Yes No No No

Need to encourage industries to go beyond minimum standards Yes Yes Yes No Yes Yes

Reputational incentives, alone, are adequate for larger industries - Yes - - Yes No

Smaller industries would prefer financial incentives over

reputational incentives - Yes Yes - Yes Yes

Financial incentives in the form of discounts are preferred over

rebates by industries - - Yes - NA Yes

Rebate in consent fee would be an attractive incentive for

industries - - No - No Yes

Technical assistance is required for going beyond minimum Yes Yes Yes - No Yes

Eco mark was an effective reputational incentive scheme - - - - No No

Thank You