In an unconventional move, the Karnataka State Pollution Control Board (KSPCB) has decided to reward environmental compliance with a cash incentive ranging from ₹50,000 to ₹10 lakh.
The aim is “to encourage voluntary improvement in environmental performance”, a KSPCB official told South First. Details about the scheme will be released later this month.
Pollution control boards are responsible for regulating air, water and noise pollution and also other issues like the management of hazardous waste, including plastic.
More specifically, they are required to set emission and effluent standards and enforce them via compliance and monitoring mechanisms.
Industries are required to obtain consent from SPCBs for establishing and running their operations.
The KSPCB’s cash rewards will be based on a rating system that the Confederation of Indian Industry (CII) developed following an MoU that the two sides signed in January 2021.
Termed GreenCo, the rating seeks to facilitate faster adoption of new technologies for environmental management.
The two partners hope the rating system will push industries “to perform better than the prescribed regulatory norms”.
Essentially, the rating will provide branding benefits similar to the likes of certification by the Bureau of Indian Standards.
“Companies that are looking to export their products can also say they have a green rating by CII,” the official said, adding that other benefits like resource and energy efficiency would also follow if companies undertake strict action with respect to environmental standards.
As for whether low ratings would result in disincentives like penalties or fines, the KSPCB official said law will take care of non-compliance in the general course of SPCB action like penalties under the Environment Protection Act, 1986.
In other words, a low rating would not result in any adverse consequences for the companies in addition to what the law already provides for. While high ratings carry benefits like cash awards and branding.
The cash reward would be paid out of KSPCB budget while certification and audit fees would flow as revenue to CII.
But how far can such green incentives go in ensuring compliance with pollution control norms?
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Can bigger companies be motivated?
Experts question the proposed reward mechanism. For instance, Ananth Hegde Ashisara, former chairman of the Karnataka Biodiversity Board, said while small and medium scale industries could benefit from it, there was “no need” to reward bigger industries.
“The only question that must be asked is whether they are compliant with pollution control norms,” he said.
Cash rewards also do not provide enough of an incentive for large-scale industries with hundreds of crores, if not thousands, in turnover, experts say.
In fact, Hegde suggested, the reward scheme should be restricted to micro, small and medium enterprises (MSMEs).
In India, companies with investment of less than ₹50 crore and annual turnover less than ₹250 crore qualify as MSMEs.
The other issue is that such ratings can be used to dilute compliance requirements.
CII has developed a similar rating system in Rajasthan, where the list of incentives for a good rating includes a reduction in consent fee (i.e. application fees to obtain consent to establish and operate) and auto renewal of consent without further monitoring and verification by the pollution control board.
And while KSPCB has strictly limited incentives to cash rewards, there is a possibility of such ratings being used in the future to seek less-stringent monitoring, like self-declarations instead of site inspections by SPCB officials.
Mahabaleshwar Hegde, an environmental researcher and guest faculty at Department of Environmental Sciences, Goa University, feels the rating system was “a good initiative” to encourage Karnataka’s small industries to comply with environmental regulations.
“But it should not become a greenwashing mechanism” that results in lesser compliance and monitoring activities by SPCBs, he added.
Pays to bear in mind that during the pandemic, the central government also resorted to diluting several environmental regulations. For example, by providing exemption from conducting environmental impact assessments to sectors like pharmaceuticals.
“The onus on ensuring compliance falls even more on pollution control boards now,” said Meenakshi Kapoor, an independent researcher working on environmental policy.
“So how are they preparing to play a bigger role in environmental regulation?” she asked, referring to whether purely reward-based systems like the GreenCo rating can go far enough.