Climate Action Driven by Cooperative Federalism

India’s purchase of 5,450 electric buses and an increase in the country’s ambition of 50,000 e-buses on the country’s roads by 2030, represent immense potential for progress on climate and development goals through close collaboration between central and state governments. Recent governance efforts have created a new business model for e-buses, with the shared objective of rapidly electrifying a key pillar of India’s public transport. If this sector is further developed, it could reduce air pollution and fuel import bills in cities, improve the balance sheets of state transport companies and boost domestic manufacturing and job creation.

state owned buses

There are currently about 140,000 registered public buses on India’s roads, the vast majority of which are sputtering engines that spew planet-warming fumes into the atmosphere. At least 40,000 of these buses are at the end of their lives and should be taken off the roads immediately.

However, most of the buses are owned and operated by state transport undertakings, which have poor financial position. To some extent, they suffer a great loss because they do an important social work by providing subsidized rent to crores of Indians every day. With few exceptions such as the Brihanmumbai Municipal Corporation’s Brihanmumbai Electric Supply and Transport Undertaking (BEST) of Mumbai, when state transport undertakings go to the market to buy buses, they face the problems of fragmented demand and high prices. Furthermore, there are limits to nationwide action on the issue as state governments regulate issues such as transit, urban governance and pollution control.

a success story

Until recently, there had never been a unified tender to address some of these challenges. Cooperative federalism can easily become a fraught issue. However, in the case of Grand Challenge 1, a tender for 5,450 buses (in five major Indian cities – Kolkata, Delhi, Bengaluru, Hyderabad and Surat), the opposite happened. Instead of running to the bottom, the respective expertise, strengths and needs of central ministries and states informed the process and successful outcomes.

Convergence Energy Services Limited (CESL), a nodal agency of the central government, acted as the program manager in this effort of centralized procurement in concert with state-led demand and adaptation. Coordination between a range of central government ministries and state governments standardized demand conditions in these five cities and discovered prices that increasingly beat out-of-date internal combustion engines.

On a cost-per-kilometer basis, the discovered prices were 40% lower than diesel and 34% lower than CNG (without factoring in subsidy through FAME-II). A Note on FAME: The Rapid Adoption and Manufacturing of (Hybrid and) Electric Vehicles (FAME-India) scheme in India was launched in 2011 under the National Mission on Electric Mobility / National Electric Mobility Mission Plan 2020, and in 2013 It was unveiled. The scheme encourages progressive inclusion of reliable, economical and efficient electric and hybrid vehicles.

With high fuel prices and energy security challenges in the wake of the war in Ukraine, switching to electric vehicles appears to be even more sensible and attractive.

This inflection point in unit economics was enabled by three key factors: collaboration, speed and transparency. At first, the tender itself was a purely consultative process and the various contributions by the participants had already influenced the design of future tenders. Second, what shaped this collaboration was a shared sense of urgency, which leveraged the power of bureaucracy and increased receptivity to creative and innovative ideas while working on time-bound and scalable plans. In the end, transparency was the most flexible quality of a public process. From the outset, there was clarity about intent to build confidence and create a publicly available process and tender that invited bids from vehicle manufacturers and operators.

In the wake of the first tender, it was incredibly gratifying to share the spirit of success with five states, five transport ministers, five state secretaries and heads of a range of state transport undertakings, each of whom participated in the process. ,

To be clear, excessive centralization may have limitations and may contradict federal principles enshrined in the Constitution. For example, states and districts in India vary greatly in their sensitivity to climate impacts, and decentralized decision-making and local-led adaptation will help reduce potential damage to lives and livelihoods. Urban local bodies and village panchayats can be the focus of climate action.

However, in some areas where India must move the needle quickly or where states lack size and financial strength, such as electrification of mass mobility, centralized procurement and program management may provide architectural changes rather than merely incremental transitions. .

a lot of work ahead

Although a good start has been made, much work remains to be done to enable electrification of mass mobility in India. The capacity of state transport undertakings to develop financial means for the country’s transition from expanding manufacturing capacity to home battery production to charging infrastructure (ideally plugged into the grid powered by renewable energy) to drive the country’s transition to clean public transport Efforts will be required till construction. and structures.

Nonetheless, the progress we have made in electric bus tendering is a harbinger of climate action made possible by cooperative federalism. As India now ramps up its demand to deploy 50,000 buses across 40 cities, it needs to continue in the spirit of true inter-ministerial and centre-state cooperation to meet its ambitious goals of green and inclusive economic growth. Will be The combined impact and strength of the Federal Compact could lead to major strides towards innovative models that not only improve transit, quality of life in cities and progress towards national climate goals, but also models for the rest of the world to emulate. make.

Mahua Acharya is the Managing Director and Chief Executive Officer of Convergence Energy Services Limited, Government of India. Views expressed are personal