• Dec 14 2015

Deconstructing Indian leadership on Climate Change

India, due to its diverse agro-climatic regions, is already experiencing the negative impacts of climate change and extreme weather conditions. It will need to create innovative social policies and business models to fund the nation's adaptive capacities to climate change.

The Indian proposition at Paris is fairly apparent and uncomplicated; it is also ambitious and steeped in India’s reality. The proposition which is delineated in India’s Intended Nationally Determined Contribution (INDC), can be seen to be responding to three core principles. The first foundational principle of any Indian contribution to the global effort on combatting climate change has to be to ensure that India’s wealthy – individuals, corporations and institutions — must not hide behind the country’s poor. They must bear the same level of responsibility and adhere to the same set of rules (agreed or normative) as global elites anywhere else in the world.

This can be accomplished in fairly simple ways, and certainly by taxing conspicuous consumption at many transaction points (rather that making production costlier and thereby socialising the cost of climate mitigation). This is already underway. The bulk industrial user pays comparable commercial tariff to similar users in the developed world. Indian cities have introduced consumption-based graded electricity tariffs and this principle is being, and needs to be extended to transportation fuels, gadgets and appliances and indeed to other spheres where embedded energy use tends to be socialised. Already, on an average, an Indian spends more on procuring renewable energy relative to their incomes than the average American, Chinese and Japanese. India is determined to showcase its leadership in renewable energy consumption. It is today, the world’s largest biomass, third-largest solar, and fourth-largest wind energy producer. The INDC outlines India’s ambition to significantly scale up renewable energy capacity in the country with a target to achieve 175 GW of renewable energy capacity by 2022. The elite and entrepreneurial Indians form part of this first INDC proposition.

The second principle is that India does not see any fundamental incoherence between being structurally dependent on coal while also leading a global green transition. These are mutually exclusive realities and if India can get this transition right, it will have a unique model of industrialisation that can be shared with many other countries that are further down the development pathway. Coal is still a necessity for multiple lifeline initiatives of the country to lift millions out of poverty. Clean energy, on the other hand, is a transformational opportunity – a moment for India to not only assume moral leadership but to develop competitive advantage in a new paradigm for growth in a fast-changing world. The INDC document recognises that India’s electricity demand is set to increase from 774 TWh in 2012 to 2,499 TWh in 2030.

This increase is necessary if the country is to industrialise, eradicate poverty and provide its population with better living standards. This growth in energy base is predicated not only on the exponential ramp up of the clean energy generation capacity as mentioned earlier, but also through a steady and calibrated increase in its fossil fuel based generation. And as facts indicate, the unnecessary alarmism on India’s ramp-up of coal is shallow. An average Indian today burns less than 20 percent of the coal consumed by an average American or Chinese and about a third of the per capita OECD appetite1 . Further, India’s peaking per-capita emissions even after this four-fold growth in energy consumption is not likely to cross the threshold of between five to six tons per capita. In fact, based on the INDC submissions, none of the major developed nations will achieve this level of per capita emissions. The bottom line then is that, while India will “Go Green” and is seeking to lead the green transition (Solar Alliance is an example), it will also have to “Grow Coal” to meet its development objectives.

And while it is doing that, there is no reason why the veil of faux moralism that envelops the lazy European political class should prevent India from seeking efficiency gains in the coal sector. If we are to grow coal, it makes sense to do it in the cleanest way possible. 111 coal-fired power plants in India resulted in 665 million tonnes of carbon dioxide emissions in 2010 – 2011 from an installed capacity of 121 GW. In 2030, it is estimated that India’s coal capacity will be anywhere between 300 – 400 GW. The World Coal Association (WCA) estimates that a 1% improvement in the efficiency of a coal power plant results in reductions of 2-3% in CO2 emissions. Investment in improving efficiency of coal-fired power stations through improvements in boiler efficiency and support for purchase of super critical technology is the low hanging fruit in the climate battle. A 1% improvement over 10 years in the efficiency of just currently operating coal power plants in India will save the entire current emissions of Belgium. A 1% improvement in future coal capacity will save the entire current emissions of Australia2 . At the same time, the irrational alarmists residing within India and in the developed world must note that despite the necessary growth of coal, India’s emission will peak lower than any other country that would have industrialised before it and its transition time will be much quicker.

Finally, India, due to its diverse agro-climatic regions, is already experiencing the negative impacts of climate change and extreme weather conditions. It will need to create innovative social policies and business models that are able to increase the resilience of local communities and help fund and strengthen the nation’s adaptive capacities to climate change. Any development policy implemented today must always be to increase the ability of the poor and weak to respond to climate change. Despite the adverse impact climate change will have on sectors such as agriculture and coastal economies, the Indian government recognises that assistance from the developed world on climate change adaptation will not be forthcoming. Taking this into consideration, the Government of India has indicated its intention to set up its own domestic adaptation fund in its INDC. If global partnerships contribute in this effort, vital resources can then be diverted to further bolster mitigation actions.

Having outlined the Indian proposition, let me now define three structural infirmities in the global system that must be resolved if collective action on climate change is to be successful. The first stems from the tyranny of incumbency. Carbon space capture by incumbents has created limited room for the development needs of those who require this space to breathe and grow. Therefore, before carbon space or resource space can be retrieved, the discursive space needs to be reclaimed for a sensible conversation on climate change. The discourse needs to change from the unavailability of carbon space in light of climate realities to one where carbon space is vacated by developed countries so as to accommodate the needs of developing nations. For every new coal plant that comes up in India, one in the West should be shut down. The early raiders of the 19th and 20th century got away with the carbon loot but it’s time that carbon space is reclaimed. When a shift from unavailability to accommodation takes place and when incumbents within and across nations are encouraged and compelled to cede space, we will find that there is new room to manoeuvre.

Second, if green energy is seen as a collective global response to mitigate carbon emissions, it is self-defeating to sustain a global system where the cost of green energy installations in countries that have the potential to ramp up such installations quickly and more widely, such as India. Is 24% to 32% more costly? In essence, we are perpetuating a system that reduces mitigating capacities by a fourth. To correct this, we will have to seriously re-organise the alignment of banking norms, global financial institutions, and climate and development imperatives at a granular level. The bankers, investors and innovators must be made co-stakeholders and must bear similar responsibilities to those borne by nations and communities. At present, the financial system is agnostic, if not explicitly climate-unfriendly.

This brings me finally to the vexed issue of technology. If access to technology has a price tag (by way of royalty payments) higher than the forthcoming development aid or climate finance, then we must realise we are in a system where the poor are underwriting the cost of mitigating climate change and we have succeeded in creating a system where the polluter profits and victim pays. This not only undermines the moral pivot of responsibility but turns the idea of differentiated responsibility on its head. Difficulties in technology flows will also compromise ambitious action by developing countries such as India.

India’s INDC predicate the success of India’s ambitions on the availability of technology (some of which are listed) and financial flows (not aid) at commercial, competitive rates from the financial system. Specifically on financial flows, the INDC’s call for new and additional finance for climate change, recognising the fact that there is currently a huge shortfall in supply and demand for climate finance. The International Energy Agency (IEA) has stated that except for a “breakthrough at the Paris UN climate conference in 2015,” the existing international framework and market structures will be unable to mobilise funds for climate action at the required pace or scale. Simply put, the fewer the impediments to access technology and finance, the greater the probability of success for India to lead an ambitious effort on climate change.

Courtesy: mygov.in The Indian proposition at Paris is fairly apparent and uncomplicated; it is also ambitious and steeped in India’s reality. The proposition which is delineated in India’s Intended Nationally Determined Contribution (INDC), can be seen to be responding to three core principles. The first foundational principle of any Indian contribution to the global effort on combatting climate change has to be to ensure that India’s wealthy – individuals, corporations and institutions — must not hide behind the country’s poor. They must bear the same level of responsibility and adhere to the same set of rules (agreed or normative) as global elites anywhere else in the world.

This can be accomplished in fairly simple ways, and certainly by taxing conspicuous consumption at many transaction points (rather that making production costlier and thereby socialising the cost of climate mitigation). This is already underway. The bulk industrial user pays comparable commercial tariff to similar users in the developed world. Indian cities have introduced consumption-based graded electricity tariffs and this principle is being, and needs to be extended to transportation fuels, gadgets and appliances and indeed to other spheres where embedded energy use tends to be socialised. Already, on an average, an Indian spends more on procuring renewable energy relative to their incomes than the average American, Chinese and Japanese. India is determined to showcase its leadership in renewable energy consumption. It is today, the world’s largest biomass, third-largest solar, and fourth-largest wind energy producer. The INDC outlines India’s ambition to significantly scale up renewable energy capacity in the country with a target to achieve 175 GW of renewable energy capacity by 2022. The elite and entrepreneurial Indians form part of this first INDC proposition.

The second principle is that India does not see any fundamental incoherence between being structurally dependent on coal while also leading a global green transition. These are mutually exclusive realities and if India can get this transition right, it will have a unique model of industrialisation that can be shared with many other countries that are further down the development pathway. Coal is still a necessity for multiple lifeline initiatives of the country to lift millions out of poverty. Clean energy, on the other hand, is a transformational opportunity – a moment for India to not only assume moral leadership but to develop competitive advantage in a new paradigm for growth in a fast-changing world. The INDC document recognises that India’s electricity demand is set to increase from 774 TWh in 2012 to 2,499 TWh in 2030.

This increase is necessary if the country is to industrialise, eradicate poverty and provide its population with better living standards. This growth in energy base is predicated not only on the exponential ramp up of the clean energy generation capacity as mentioned earlier, but also through a steady and calibrated increase in its fossil fuel based generation. And as facts indicate, the unnecessary alarmism on India’s ramp-up of coal is shallow. An average Indian today burns less than 20 percent of the coal consumed by an average American or Chinese and about a third of the per capita OECD appetite1 . Further, India’s peaking per-capita emissions even after this four-fold growth in energy consumption is not likely to cross the threshold of between five to six tons per capita. In fact, based on the INDC submissions, none of the major developed nations will achieve this level of per capita emissions. The bottom line then is that, while India will “Go Green” and is seeking to lead the green transition (Solar Alliance is an example), it will also have to “Grow Coal” to meet its development objectives.

And while it is doing that, there is no reason why the veil of faux moralism that envelops the lazy European political class should prevent India from seeking efficiency gains in the coal sector. If we are to grow coal, it makes sense to do it in the cleanest way possible. 111 coal-fired power plants in India resulted in 665 million tonnes of carbon dioxide emissions in 2010 – 2011 from an installed capacity of 121 GW. In 2030, it is estimated that India’s coal capacity will be anywhere between 300 – 400 GW. The World Coal Association (WCA) estimates that a 1% improvement in the efficiency of a coal power plant results in reductions of 2-3% in CO2 emissions. Investment in improving efficiency of coal-fired power stations through improvements in boiler efficiency and support for purchase of super critical technology is the low hanging fruit in the climate battle. A 1% improvement over 10 years in the efficiency of just currently operating coal power plants in India will save the entire current emissions of Belgium. A 1% improvement in future coal capacity will save the entire current emissions of Australia2 . At the same time, the irrational alarmists residing within India and in the developed world must note that despite the necessary growth of coal, India’s emission will peak lower than any other country that would have industrialised before it and its transition time will be much quicker.

Finally, India, due to its diverse agro-climatic regions, is already experiencing the negative impacts of climate change and extreme weather conditions. It will need to create innovative social policies and business models that are able to increase the resilience of local communities and help fund and strengthen the nation’s adaptive capacities to climate change. Any development policy implemented today must always be to increase the ability of the poor and weak to respond to climate change. Despite the adverse impact climate change will have on sectors such as agriculture and coastal economies, the Indian government recognises that assistance from the developed world on climate change adaptation will not be forthcoming. Taking this into consideration, the Government of India has indicated its intention to set up its own domestic adaptation fund in its INDC. If global partnerships contribute in this effort, vital resources can then be diverted to further bolster mitigation actions.

Having outlined the Indian proposition, let me now define three structural infirmities in the global system that must be resolved if collective action on climate change is to be successful. The first stems from the tyranny of incumbency. Carbon space capture by incumbents has created limited room for the development needs of those who require this space to breathe and grow. Therefore, before carbon space or resource space can be retrieved, the discursive space needs to be reclaimed for a sensible conversation on climate change. The discourse needs to change from the unavailability of carbon space in light of climate realities to one where carbon space is vacated by developed countries so as to accommodate the needs of developing nations. For every new coal plant that comes up in India, one in the West should be shut down. The early raiders of the 19th and 20th century got away with the carbon loot but it’s time that carbon space is reclaimed. When a shift from unavailability to accommodation takes place and when incumbents within and across nations are encouraged and compelled to cede space, we will find that there is new room to manoeuvre.

Second, if green energy is seen as a collective global response to mitigate carbon emissions, it is self-defeating to sustain a global system where the cost of green energy installations in countries that have the potential to ramp up such installations quickly and more widely, such as India. Is 24% to 32% more costly? In essence, we are perpetuating a system that reduces mitigating capacities by a fourth. To correct this, we will have to seriously re-organise the alignment of banking norms, global financial institutions, and climate and development imperatives at a granular level. The bankers, investors and innovators must be made co-stakeholders and must bear similar responsibilities to those borne by nations and communities. At present, the financial system is agnostic, if not explicitly climate-unfriendly.

This brings me finally to the vexed issue of technology. If access to technology has a price tag (by way of royalty payments) higher than the forthcoming development aid or climate finance, then we must realise we are in a system where the poor are underwriting the cost of mitigating climate change and we have succeeded in creating a system where the polluter profits and victim pays. This not only undermines the moral pivot of responsibility but turns the idea of differentiated responsibility on its head. Difficulties in technology flows will also compromise ambitious action by developing countries such as India.

India’s INDC predicate the success of India’s ambitions on the availability of technology (some of which are listed) and financial flows (not aid) at commercial, competitive rates from the financial system. Specifically on financial flows, the INDC’s call for new and additional finance for climate change, recognising the fact that there is currently a huge shortfall in supply and demand for climate finance. The International Energy Agency (IEA) has stated that except for a “breakthrough at the Paris UN climate conference in 2015,” the existing international framework and market structures will be unable to mobilise funds for climate action at the required pace or scale. Simply put, the fewer the impediments to access technology and finance, the greater the probability of success for India to lead an ambitious effort on climate change.

This article originally appeared in MyGov.

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