India Inc should end its dependence on fossil fuel and consumers should be more disciplined in their use of subsidised fuel, but the government has to be cautious while considering harsh disincentives to the use of fossil fuel such as a carbon tax, policymakers and representatives of corporate India agreed on Saturday.

They were deliberating on corporate India?s green initiatives towards climate change at the Green Business Leadership Awards 2009-10, organised jointly by The Financial Express, Emergent Ventures India and the Indian School of Business, to honour companies that made a conscious decision to cut down on carbon emission and have adopted energy-efficient business models.

Minister for new & renewable energy Farooq Abdulla told industrialists that it was high time that not only India, but everyone else too, realised that the dependence on fossil fuel has to end.

While the government targets an ambitious solar power capacity of 20,000 mega watt by 2022, companies seeking to reduce carbon emissions face the challenge of mobilising the resources for clean energy technology, which are mostly patent-protected by innovators in the US and Europe.

Representatives of corporate India, including ONGC?s CMD RS Sharma and Coal India chairman Partha S Bhattacharyya, said the option of a carbon tax to discourage the excessive use of depleting fossil fuel was a sensible option.

But policymakers need to fathom its impact, particularly on employment. The government, which came to power with an inclusive growth agenda, is expected to think twice before going ahead with a carbon tax. Abdulla emphasised on the need to provide employment opportunities to the masses. Bhattacharyya said if the government decides to have a carbon tax, the proceeds should go to a separate fund and not to the general exchequer.

Awareness and responsible use of fossil fuel, too, are vital for energy conservation, RS Sharma said. ?Because of subsidy, there is no concern about conserving fossil fuel or about economising consumption… Some discipline has to be observed,? Sharma said. Upstream oil companies such as ONGC meet part of the fuel subsidy burden by way of giving discounts to fuel refiners and retailers when they buy crude. Sharma said ONGC is now taking the help of children and agencies like The Energy Research Institute in creating awareness.

In extractive industries, such as mining and exploration and production of hydrocarbons, some impact on the environment is bound to happen. About three-fifth of India?s coal deposits is in forest area. ?We are into aforestation in a big way,? said Coal India?s Bhattacharyya, as his company seeks to make up for the impact on the environment while carrying out its important mandate of supplying feedstock to the power plants that fire up the nation?s economy.