Save energy by law, lose carbon credit

Energy saving light bulbs for sale.

Image via Wikipedia

There is an absurd irony to how subsidies and carbon credits work.

A piquant situation is now arising in the case of CFLs which enjoy a carbon emission reduction credit of as much as about Rs 100 per lamp with a mapping of energy saving over 7 years. Companies have been able to sell these lamps at Rs. 15 with the rest of the money being acquired as CER credit for the energy saving achieved over a cycle of 7 years.

This carbon credit can be lost as an advantage the moment the government decides to make CFLs a mandatory requirement. The government is therefore weary of making the purchase of CFLs a matter of law.

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