Thursday, February 25, 2010


Having committed for a 25-40% reduction in CO2 emission within 5 years, Indian Governments (GOI) will have to ponder over the impact of such a program on various fronts. As far as the food industry is concerned, there is a feeling that the CO2 emission control program will reflect on the manufacturing cost of processed foods very significantly. This is probably due to additional investment, which may be necessary to install palliative equipment by the food processing industry for reducing the quantum of pollution from their manufacturing facilities. This, how ever, may not be completely true as reflected by some modeling studies reported recently, simulating the future scenario vis-à-vis CO2 emission controlling regime.

"The Treasury modelling found that in 2013, the average price impact of the Carbon Pollution Reduction Scheme on food bills will be around $68 a year -- less than 1 per cent of household food bills," Mr Garrett said. However, the council chief executive Kate Carnell said this was not realistic, given the role of electricity in the processed food supply chain. "The average shopping basket is about $200 a week, so the government's modelling suggests a barely 0.5 per cent increase off the back of increases in electricity prices of 20 to 40 per cent. That is not even vaguely credible in a manufacturing industry," she said.

As no realistic studies have been carried out in India, it may be difficult to predict the consequences of GOI tightening the screw on the industry for bringing out substantial reduction in carbon pollution. If the western modeling is transposed under Indian conditions, less than 1% increase in the prices of processed foods is just "peanuts" when the consumer in this country is already braving a 20% annual inflation in the food front. GOI must not bend before such artificial scare "taunting" by vested interest and stick to its commitment before the world community. Which is also good for the country.


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