There are also penalties for companies that do not use a sufficient amount of renewable energy sources to power their operations.
The legislation will now go through the upper house of parliament.
The bill is “a positive step” towards India’s climate goals, said Madhura Joshi, head of India’s energy transitions at E3G, a climate change think tank.
“The share of clean energy sources powering Indian industries and homes will definitely increase as a result of this bill,” he said.
Last week, India pledged to reduce emissions from activities for the country’s economic growth by 45% by 2030 from 2005 levels. The country also plans to achieve half of its energy needs from non-fossil energy sources by 2030 and to promote a federal government program that encourages people to adopt green lifestyle changes.
“Every unit of energy saved or conserved is essential to reducing emissions,” said Bharath Jairaj, who leads the India energy program at the World Resources Institute. Including large residential buildings in building codes that require energy savings is a key part of the bill and reducing emissions, he said.
Scientists say reducing greenhouse gases is key to limiting the effects of climate change, which has already brought hotter weather and more devastating floods to India.
The bill is also the first time the Indian government has proposed a carbon trading scheme. Unlike a few other parts of the world, the so-called carbon market is still a nascent idea in India, Jairaj said.
It is “set to become an important tool to reduce greenhouse gas emissions in India”, he added.
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