CSE working paper on penalty and incentive mechanisms for coal-based power plants
Coal-based power is one of the most resourceintensive and polluting industries. On 07 December 2015, the Ministry of Environment, Forestry and Climate Change introduced stricter environmental standards for coal-based thermal power plants under the Environment Protection Act, 1986. Five years after these norms were announced, most plants have neither taken adequate action nor made significant progress towards meeting them.
This paper aims to elaborate the concept of ‘first-run’ which incentivizes cleaner power stations to run on priority. This could serve as a spur and bring in urgency in the coal-based power sector to abide by the 2015 emission standard deadlines. The paper also discusses the efficacy of the current deterrence system and the need to strengthen it.