ABSTRACT:
Humans have little control over one of the primary crises that has negatively impacted every living thing on Earth i.e. global warming. Several countries came in a common roof and have invented creative solutions and diverse programs to mitigate it. The Paris Agreement was implemented globally to address this issue and keep the planet’s rising temperature below 2°C, or at least 1.5°C, before this century ends. The introduction of the carbon tax, which is essentially a penalty for damaging the environment, basically forces consumers to produce energy from renewable sources. It was a quick response to the issue of global warming, which is caused by greenhouse gases released by people while using energy.
Electric vehicles have revolutionized the automotive industry and helped 196 nations in decreasing the temperature, due to their absence of exhaust gas ejection, they received widespread appreciation for their ecological nature. But imposing taxes at the same time as bringing such modern, environmentally friendly cars in the market is a difficult task for developing and least developed nations due to problems like inadequate public assistance, appropriate revenue preparation, and lack of compatibility, cutting-edge technology that limits their application into the sector. Reason thereby, it is crucial that the government opt for social, economic, and environmental factors when preparing for environmentally friendly policies.
India is ranked third in the world for greenhouse gas emissions, and in upcoming decade, its emissions are predicted to increase by 2.5x. Since one-fourth of India’s population is multidimensionally impoverished and lacks necessities of life. Adding to that the country’s growing population will require extra energy and relevant infrastructure. Hence, the country should act appropriately and cautiously when legislating and implementing laws regarding taxes and electric automobiles.
KEYWORDS:
Global warming, Greenhouse gases, Carbon emission, Electronic Vehicles, EVs, Carbon Tax.
RESEARCH METHODOLOGY:
This paper is a unique blend of writer’s opinion and statements from secondary sources used to support the writer’s statement. The sole motive of this study is to showcase the efforts taken by Indian government towards global warming and a clarification on the (electric vehicle) EV revolution. The methods I have used are sufficient to give an overview about the current situation of India towards global warming. The blogs and journal article are used in determining the carbon tax structure and fitness of EVs from perspective of a healthy environment. The abundance of information available virtually are easy to access in a short span of time and their reliability were taken into consideration to arrive at an inference.
RESEARCH METHOD:
This research paper is created from the different sources. I have used sources like blogs, journal articles and e-books as evidence to answer and question certain areas of this paper.
INTRODUCTION:
People have a natural tendency to find new and creative methods to satisfy their demands, and these never ending needs can lead to chronic issues. One of these is global warming, which is mostly caused by human combustion of fossil fuels, which is responsible for more than two-fifths of Carbon dioxide (CO2) produced following the industrial era. The Paris Agreement, a binding legal treaty, where signatories have to decrease greenhouse emissions to reduce global warming, this agreement was born out of the desire to protect the climate. The binding nature of this agreement demonstrates the significance of the issue, and it requires developed nations to share their strategy to minimize greenhouse gas emissions as well as contribute technological, financial, and capacity resources for improved implementation of the developing nations.
The number of people on the planet are growing daily, and as a result, they are depending increasingly on nature to meet their needs. This includes activities like burning and harvesting trees for housing, collecting fossil fuels for cars, and many other activities that produce greenhouse gases that damage the ecosystem of the planet and ozone layer. Furthermore, the usage of fossil fuels has an impact like metal corrosion and poor air quality due to the emission of harmful gases into the atmosphere during the burning process, including sulphur dioxide and carbon dioxide. According to a survey, human-produced gasses generated during the heating process were above 60% consist of CO2. According to statistics, the typical worldwide atmospheric carbon dioxide level has risen 11 times in a row in 2022, to exceed 2 parts per million. Elevated temperatures adversely affect people, particularly to those in the lower socioeconomic strata and even negatively impact nation’s food yield. A carbon tax is essentially a punishment in disguise, applies on the carbon dioxide because energy usage excretes CO2, which, contrary to other forms of pollution, has detrimental consequences on the entire planet.
The carbon tax gives the government a chance to address environmental issues as well as those problematic areas that need additional funding or resources. Regrettably, not all governments prioritize environmental preservation when they come into power. With a carbon tax, manufacturers and consumers are incentivized to develop or invest in environmentally sound energy generation methods, as doing so will reduce carbon emissions and even create jobs. Carbon tax also was enacted keeping in mind the externality problem, in which harm is borne by the entire society that is not involved in the production of emissions or pollution. The idea of charging fines in the form of taxes on each metric ton of emissions was implemented to protect the climate. Strict carbon taxes will raise money, which will be used to fund further studies aimed at resolving the climate problem. This initiative is a step toward a green economy and society where manufacturers and consumers take environmental responsibility seriously and work together to create resorts that are sustainable, eco-friendly, and serve the interests of all living things, in addition to providing a safe and healthy environment for all living things on Earth. This strategy gave rise to EVs, and the government now offers subsidies and other incentives to encourage people to switch from conventional cars to EVs. Nonetheless, with prolonged use, some scientific research acknowledges that EVs have a detrimental effect on the environment. The second section of this research paper will go into more detail on India’s attempt as a developing nation to reduce carbon dioxide (CO2) emissions from automobiles. The third section will cover the car tax structure, give an overview of several electric vehicle-related concerns, and conclude with some recommendations.
INDIA’S APPROACH AGAINST INCREASING CARBON DIOXIDE (CO2): –
In the past 3 decades, the levels of greenhouse gases have continuously increased, rising by 5% in 2022 compared to the prior year. In fact, ninety percent of the rise in CO2 emissions came from conveyance on roads alone. From 2020 to 2050, it is anticipated that CO2 pollutants and energy consumption will increase by approximately 4x, translating to an increase in carbon ejection of 300 Mt to 1,200 Mt (million tons). According to India Energy Outlook, after 1990, the energy, transportation, and industrial sectors have produced more than three times as much CO2. Moreover, India was ranked as the third-largest and fastest-growing market for light motor vehicles, surpassing Japan in 2022 with a production of more than 5 million units.
- TAX STRUCTURE OF VEHICLES: –
There isn’t any carbon tax on paper (except from “Cess,”). The exception talks about the Air Act of 1981 that placed responsibility on local government entities to protect the public and prevent air pollution by prohibiting corporations, industries, and other potentially global warming causing enterprises from releasing polluting substances in a designated area where air contamination is prohibited unless the board has granted prior authorization in exchange for a reduced fee. This statute was not later amended which is the reason for reduced fees. Here, the tax on carbon is collected by the state through taxes or cess. Prior to the implementation of the Goods and Services Tax (GST) emitters were required to pay a Clean Environment/ Energy Cess, which was assessed in 2016 at USD 3.2 (INR 400) per tonne. This was subsequently substituted for the Compensation Cess, which levied taxes on the mining of coal at the identical price point.
The amount of tax imposed on vehicles varies according to their kind and size (small, medium, big, sports, mid-segment, hybrid, hydrogen, electric). The overall tax varies between 29% and 43%, with 28% serving as the fixed GST rate and 1% to 15% serving as the compensatory cess. For electric, hybrid, and hydrogen cars, there is a unique agreement wherein the buyer is spared from paying the compensating cess but is required to pay 5% GST instead of the original 12%. The deduction is limited to electric, hybrid (small), and hydrogen (small) cars. For hybrid and hydrogen vehicles that run on gasoline or diesel, the buyer must pay a 15% compensatory cess.
In addition, vehicles producing more than 110g CO2/km are subject to a supplementary $49 GST cess. But the government ought to use its tax money wisely by investing it in clean energy sources. Speaking regarding the Indian situation, Mr. Modi raised the coal tax after assuming office in order to demonstrate his administration’s efforts to create an environmentally conscious state. However, according to a report, just 37% of revenue was utilized to achieve the goal of a sustainable economy, and the remainder of 8.8 billion USD was unused and given to the states that failed to implement the GST reform. Moreover, the government gathered 54,000 cr. INR. under the title of the clean cess, however since the Goods and Service Tax got effect, it is highly likely that the money won’t be utilized for their intended purpose.
India has implemented a five-year green tax plan for both commercial and private vehicles that are over eight and fifteen years old. For a two-wheeler private vehicle, the green tax is £20-35 (diesel £35, petrol £30) if the vehicle is older than fifteen years. For a commercial vehicle, the green tax varies depending on the type, but for buses and vehicles weighing more than seven thousand kilograms, it is 2.5% to 10% of the annual tax. Taxpayers who purchase electric vehicles on loan may be eligible for a withdrawal of up to INR 1.50 lakh under section 80EEB of the Indian Income Tax, although corporations and enterprises are not permitted to use this benefit. However, if the interest paid exceeds the loan’s threshold, the taxpayer may deduct it from their taxes as business expenditures.
Additionally, the Indian government attempted to encourage companies to create an effective ecosystem of EVs through the Production-Linked Incentive plan in order to boost output and meet the increasing need. Manufacturers would get incentives depending on the quantity of EVs they make. Therefore, India is making significant efforts to encourage people to switch from driving vehicles powered by non-renewable energy to eco-friendly automobiles by enacting a policy that is a special combination of taxes and incentives. To lessen the presence of CO2, India must either establish new laws or implement the ones that are already in place more successfully. However, several measures were implemented to reduce CO2 emissions, such as rigorous price increases for gasoline, diesel, and CNG, a coal cess, the elimination of grants and subsidies and the adoption of technologies like carbon capture and storage and solar photovoltaic. The PAT (Perform, Achieve and Trade) program in the transportation industry has helped in preventing 92 million tons of CO2 in the first two cycles. A scrappage policy is also implemented to eliminate unhealthy cars, and the installation of environmentally friendly trains and automobiles is one of the most well-liked initiatives of all. .
- ISSUES WITH EVs: –
Even though India is initiating several laws and programs to encourage people to switch from non-EVs to electric vehicles, EVs still have drawbacks. The degree of ecological damage that 3 distinct kinds of vehicles namely, hybrid, electric, and fuel-operated can have, if evaluated from the point of manufacturing to the point of disposal, is extensively clarified by research on the life cycle of EVs conducted by Emiliano Pipitone and colleagues. It was an eye-opener since most people believe that electric motor automobiles are healthy for the nature, which happens to be the sole reason why government is trying to get individuals to convert to EVs. Although the present research found that there are indeed advantages to switching from gasoline and diesel engines to electric or hybrid automobiles in terms of carbon emissions. However, the question regarding the carbon emissions produced from the manufacturing, utilization, and disposal of a vehicle is concerned, battery-operated vehicle cause more damage that contributes to negative ecological reactions like “terrestrial acidification, particulate matter formation, and mineral resource deployment,” as lithium generation requires more energy due to the scarcity of natural energy sources in India and the majority of batteries used worldwide are exported by China, which has poor electricity mix and increases atmospheric heating during the battery production procedure.
Furthermore, Tory Hawkins and colleagues argued in a similar study comparing conventional combustion and e-automobiles that “it is counterproductive to promote EVs in regions where electricity is produced from oil, coal, and lignite combustion” because they exhibit significant life cycle side effects and could contribute to global warming more than vehicles powered by gasoline. Therefore, EVs could be helpful in reducing roadway emissions and not so fit in decreasing the global warming globally. Eventually, rather than placing too much emphasis on EVs, India should focus on replacing battery manufacturing technologies. In addition, studies show that four wheel drive electric vehicles (EVs) were less cost effective, and the route of subsidizing them to lower CO2 emissions was a costly procedure due to the fossil-fuelled source of energy required to power the EVs. In other states, the number of average coal powered thermal power plant is important sources of electricity. Since it was discovered that yearly emissions from diesel vehicles were lower than those from electric vehicles, the subsidies should be adjusted to the unique emission grids of every state of India as opposed to being implemented nationwide in an all encompassing manner.
Lack of facilities is another problem, stations for charging serve as gasoline stations for electric cars. Though India has specific laws governing the manufacture, sale, and taxation of electric autos, the country lacks effective laws governing charging facilities, which contributes to problems with malware, viruses, and cyberattacks. The general population is also unaware of the policy’s claims, and there are fewer charging points in cities.
CONCLUSION AND SUGGESTION: –
This paper aimed to highlight the few significant steps India has made to reduce carbon emissions by introducing electric cars (EVs). It also included a brief analysis of how India has constructed the country’s vehicle tax system and dealt with potential problems with EVs that India may be overlooking. Upon reviewing several studies, statistical data, and pertinent journals related to ecological reform and carbon price, it is evident that India is making steps to comply with the Paris Agreement, which has an object to reduce global temperatures below 2°C. Nevertheless, India still has the capacity to work harder by adding new regulations or changing existing ones regarding carbon taxes. Without a doubt, India is always coming up with new strategies to encourage people to invest in and develop renewable energy sources as well as to buy environmentally friendly items like electric vehicles.
India’s high population density could be the reason behind its sluggish pace of development. Alternatively, it may be that the country is not effectively allocating and utilizing the funds it has obtained for climate change mitigation, or it may be that India is prioritizing different sectors and moving at different speeds. India will be able to migrate consumers to EVs faster and more efficiently with the help of effective separate laws, effective public awareness campaigns, working to provide guidelines on the use of pertinent policies, creating an appropriate EV ecosystem, and especially encouraging domestic battery manufacturing facilities from renewable sources. Carbon taxes will contribute to the reduction of CO2 emissions and provide an additional revenue stream that should be used for research and development to produce new technologies that will lessen the amount of carbon in the atmosphere.
On the flip side, in order to encourage people to look for more ecologically friendly options, India could reduce the amount of crude oil it imports by raising the compensating cess on automobiles and extending the same for gasoline. Since transportation is the main industry, it would not be economically sensible to completely phase out gasoline-powered vehicles. However, a high carbon tax combined with the widespread dissemination of information about the detrimental effects of carbon dioxide on climate change will have a major effect on lowering global warming.
~ Parin Sunilkumar Maurya Centre Of Excellence, School Of Law Gujarat University