Author : Emma Hakala

Issue BriefsPublished on May 01, 2019 PDF Download
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India and the global geoeconomics of climate change: Gains from cooperation?

Attribution:

 Emma Hakala, “India and the Global Geoeconomics of Climate Change: Gains from Cooperation?, ORF Issue Brief No. 291, May 2019, Observer Research Foundation.

Worsening climate change will have impacts on global politics, creating new vulnerabilities as well as opportunities. India, given its emerging power status and high vulnerability to climate impacts, holds a key position in global climate action. This brief looks at the ways in which India has used climate policies to gain leverage. India has sought to incorporate the geostrategic uses of climate change into a wider shift in its foreign policy, illustrating how climate change can lead to both competitive and cooperative geostrategies. Globally, India has chosen a cooperative strategy to emphasise its responsibility through diplomacy and sustainable energy investments, in the process contributing to its role as a global power and widening its influence in partner countries.

This paper is part of ORF’s series, ‘National Security’. Find other research in the series here:

Introduction

At the World Economic Forum meeting in Davos in February 2018, Indian Prime Minister Narendra Modi called climate change one of the biggest global threats and called for action to prevent it. Modi’s choice to pay attention to climate change at a forum traditionally focused on economics and foreign policy is one example of how the significance of climate change is being recognised to the extent that its consequences extend to global politics and security. At the same time, however, such attention challenges the traditional geopolitical focus on state security and military power.

Indian policy is an interesting case for studying geostrategic choices concerning climate change. Geographically and ecologically, India is highly exposed to security risks such as flooding, drought and extreme heat, and is among the countries most vulnerable to the impacts of climate change.[i] Yet, as this paper will argue, India also has the potential to gain economically and politically from some of the measures that are being developed to mitigate climate change, such as sustainable energy production. Climate policy can also be placed in the context of a wider shift in Indian foreign policy towards a more active global engagement.[ii]

This brief will focus on the geoeconomic implications of climate change in the case of India. It will examine India’s potential to gain leverage and promote its global strategic interests through climate governance. Further, it will look at the implications of India’s policies, particularly from the point of view of the European Union (EU) as its potential partner or rival. Through the case of India, the brief will also make more general observations concerning the role played by climate change in geostrategic choices

Climate Change as a Question of Geoeconomics

Despite a resurgence in the study of geopolitics in recent years—owing mainly to escalating superpower rivalries—some scholars have suggested that it would be more accurate to study a number of these developments in terms of geoeconomics.[iii Shifting the focus to economic measures of global policymaking—such as sanctions and tariff regimes—serves to extend the discussion beyond military means of exerting power. Rather than analysing the use of force, it looks at globalised resource flows, growing interdependence, and asymmetric trade relations, which all create new vulnerabilities and opportunities for countries to pursue their strategic goals.[iv]

Indeed, geoeconomics is a useful approach to climate policy as it integrates questions of resource use and geophysical boundaries into strategic choices. It also enables the linking together of economic and security discourses that have usually framed climate change in global politics.  Dalby argues that climate change requires a comprehensive change in geopolitical thinking, increasingly shifting the focus from military power to strategies on energy, infrastructure and production.[v] Although Dalby’s focus is on geopolitics, his perspective would also seem to support the need for a geoeconomic analysis of climate change.

Climate change thus gives rise to incentives and vulnerabilities that yield opportunities to pursue geoeconomic interests. Yet scholarly analysis from this point of view is scarce. Analyses that do incorporate it tend to focus on energy, be it in terms of material flows, competition or regional relations.[vi] Chaturvedi and Doyle, for instance, have contrasted geoeconomics with climate security, while Youngs has looked at climate geoeconomics from the perspective of EU policymaking.[vii] However, an overarching examination of the linkages remains absent.

Wigell offers a useful taxonomy for analysing geoeconomic policy choices that is also useful for the case of climate policy. He posits that countries can choose between competitive and cooperative strategic frames of action, and that economic uses of power vary between those that have purely economic goals and those that are used as a means of ultimately attaining political objectives. When combined, these two dichotomies produce four possible geoeconomic strategies. A competitive strategic frame produces neo-mercantilism when economic power is a goal in itself and neo-imperialism when it is a means of achieving political objectives. Meanwhile, a cooperative frame leads to liberal-institutionalism when economic power is the goal and hegemony when it is the means.[viii]

Wigell’s taxonomy of geoeconomic strategies helps to examine the potential of climate policies to lead to either cooperative or competitive outcomes. This brief considers the geostrategic choices of India and the EU with regard to one another and thereby aims for a more detailed discussion of the interests arising from the power politics of climate change.

India – a Global Climate Leader?

Both for its sheer size and its position as an emerging economic power, India is an important actor in climate action. While its historical greenhouse gas (GHG) emissions, and therefore responsibility for climate change, have been low, its current emissions are on a steep rise and are projected to continue on the same trajectory in the coming years.[ix] It is therefore being increasingly obliged to restrict its emissions. At the same time, however, the country continues to face its old challenges of eradicating poverty and ensuring future development. Traditionally, India has prioritised economic development over climate policy. In global climate negotiations, it has held on to its position as a developing country and argued for the principles of equity and Common but Differentiated Responsibilities regarding cuts in GHG emissions. Often seen as the leader of the developing world in this context, India’s position has ramifications beyond its own policies.[x]

Yet India’s recalcitrant position has shifted in recent years. In particular, in COP21 in Paris in 2015, India accepted 1.5 degrees Celsius as a target limit for the increase in the global average temperature and launched the global renewable energy initiative, International Solar Alliance (ISA). It has also since announced an ambitious domestic renewable energy programme. Such actions, combined with Prime Minister Modi’s strong statements on the subject, have prompted some to describe India as the new global leader in climate.[xi]

On the one hand, the proposed leadership position can be viewed in the context of domestic politics. Dubash argues that the presumed shift in policy is caused by the increasing variety of voices participating in climate discourse in India. The prevailing argument for climate action in the policy community is based on energy poverty and so-called co-benefits that can be reached when climate policy is linked to improving energy provision.[xii] On the other hand, the most visible change has taken place in India’s foreign policy. Prime Minister Modi’s declarations about climate action, for instance, have been directed at a global audience. Given the relatively low expectations for India’s participation in climate agreements, these pronouncements can be seen as a clear signal of new ambition.

This is reflective of a more general change in India’s global engagement. Under Narendra Modi’s term as prime minister, India has considerably activated its foreign policy. Through high-level meetings and closer integration into multilateral trade agreements, India has aimed to deepen ties with global partners like the United States and the EU, while also engaging within the regional neighbourhood, for example by re-launching the ‘Look East’ policy as ‘Act East’. India’s foreign policy has edged towards pragmatism, with the country increasingly presents itself as a global agenda-setter and rule-maker rather than a rule-follower. While it has been argued that the Modi government has yet to clearly articulate the country’s strategic goals, India’s previously reactive foreign policy is characterised by a new forward-looking tendency.[xiii]

The emerging activism on climate policy is also strongly associated with Prime Minister Modi. It is in his meetings and conferences with other world leaders that the Indian stances have been articulated, and he has to some extent come to personify the idea of Indian climate leadership. The close engagement of the prime minister suggests that India views climate policy as a strategic interest. It is a sector where Modi has personally engaged to establish global normative power for India.[xiv]

At the global level, climate negotiations have offered a forum for India to use diplomatic leverage to pursue its interests. India has received a good diplomatic response to its flexible approach ahead of the negotiations in both Copenhagen and Paris. This suggests that it could use progressive climate policy to foster its ties with key actors like the US and EU and gain support for its strategic goals.[xv]

In terms of concrete actions, the International Solar Alliance is a flagship for India’s enhanced climate engagement. Launched at the Paris negotiations in 2015 by India and France, the ISA functions as a large-scale platform for cooperation on solar energy, promoting new technologies and financing. It targets sun-rich countries between the Tropic of Cancer and the Tropic of Capricorn, but has a global reach as it engages international organisations, companies and other stakeholders to facilitate the transformation to sustainable energy.[xvi] Initially drafted as part of India’s National Action Plan on Climate Change, the alliance also aims to respond to the Indian energy challenge by creating economies of scale and mobilising investment.[xvii] The ISA provides a way for India to establish its economic and political power at a global level. It consolidates India’s position in the fields of sustainable energy and climate policy, enabling it to form new beneficial partnerships with other countries. Cooperation with France as another founding member of the ISA shows how India can use its climate engagement to shape and strengthen bilateral ties with developed countries.

Overall, the ISA helps to cultivate India’s image  as a responsible global actor, at par with others like the EU.[xviii] Potentially, an even more important means of exerting power may be opened up as the ISA reinforces India’s leadership role among developing countries. In particular, it allows increased Indian involvement in renewable energy projects in Africa, where solar energy has vast growth potential. India is already an important trading partner for African countries and stands to strengthen its influence through the ISA, for example by earmarking a credit line of up to US$ 2 billion with 15–20 percent of the amount to be earmarked for solar-related projects in Africa.[xix]

Through such partnerships and investments, India is able to increase its influence over African countries. This may create a dependence on India, obliging African counterparts to comply with its political goals at the risk of losing financing and other kinds of support. India, therefore, has the chance to use sustainable energy policy as part of a so-called “binding strategy” that will promote its interests in Africa. Here, its actions are similar to those used by China in South America, for instance.[xx] More broadly, ISA is often seen as India’s answer to China in the competition for climate leadership. However, China retains the upper hand as an economic and regional power and in terms of sustainable energy. Therefore, it may be more useful for India’s interests to proceed with plans to present ISA as separate from Chinese activity, focusing instead on pursuing its own interests.[xxi]

At the global level, Indian climate engagement appears to mainly provide incentives for cooperation rather than competition. It is not, for instance, directed as an open challenge to other actors like China. The partnership with France and other countries within the ISA shows – at least at present – that cooperation is a more fruitful approach for India. The approach that emphasises common gains and reciprocal benefits suggests that India applies a cooperative geostrategic frame to its global climate policy; it can use this frame geostrategically.

Referring back to Wigell’s taxonomy of geoeconomic policy choices, India appears to be nurturing a cooperative approach with political aims. In the taxonomy, this best resembles a hegemonic strategy. This is particularly compatible with the goal of global leadership and increased responsibility in global governance. As discussed earlier, however, the lines between the strategies are not always clear-cut. In India’s case, its actions can also often be seen as primarily motivated by economic goals, suggesting that it is incorporating elements of a liberal-institutionalist strategy. To better understand the consequences of either of these approaches, it is useful to look closer at India’s engagement on climate policy with the EU in order to better understand its geoeconomic position.

India and the EU in the Geoeconomics of Climate: Partners or Rivals?

Historically, the relationship between India and the EU on climate policy is illustrative of the division between developing and industrialised countries in the global discourse. While the EU has supported the development of Indian climate policy, it has previously failed to influence the way India’s government framed the issue as one for which the country bore no responsibility.[xxii] Therefore, the recent shift in India’s policy is significant as it allows engagement of a more equal nature between the two.

A strong indication of the EU and India’s mutual commitment to climate action is the Joint Statement on Clean Energy and Climate Change Partnership issued in March 2016. On the basis of “equality, reciprocity, mutual benefit and equity”, the statement sets out to support the cooperation between the parties on energy and climate action. In addition, it aims to strengthen the “respective capabilities” of the EU and India for meeting the objectives of the Paris Agreement while ensuring sustainable energy. The statement emphasises the mutually beneficial opportunities of cooperation and recognises initiatives like the ISA as one of the concrete measures where the two could work together.[xxiii]

Moreover, the partnership points to the need for a facilitated dialogue on climate between the EU and India. This has given rise to a concrete process that aims to support the exchange of knowledge, competencies and technologies between the parties. Although the initiative is funded by the EU Commission, it is also strictly described as equal, with the objective “to gain and sustain an understanding of each other’s needs”.[xxiv] Finally, in 2017, the EU and India issued a Joint Statement on clean energy and climate change which said that the parties would  “lead and work together to combat climate change”.[xxv]

The partnership presents the EU and India as equal partners with a joint responsibility for preventing climate change. This response is crucial because it has, in normative terms, brought India’s climate engagement to a level at par with that of the EU. Although it needs to be taken into account that official statements do not always or automatically lead to concrete action, the existence of the dialogue between the parties can help to gradually move from the normative towards operational steps as well.

Meanwhile, the Joint Statement from 2017 is careful to point out the target for industrialised countries to mobilise financing for climate action, although this commitment concerns only the EU and not India.[xxvi] In other words, India has not given up its assertion about the division between developing and industrialised countries. Yet its position does not prevent cooperation on equal terms across that divide. For the EU then, India’s involvement in climate policy appears to be strategically important enough to make it willing to accept concessions on certain issues. India’s strengthened climate engagement inevitably increases the effectiveness of the prevention measures and therefore also benefits the EU. At the same time, close cooperation with India on the issue enables the EU to retain command over global climate policy.

In addition, climate change is a suitable foreign policy field for the EU to further strengthen and deepen its overall foreign policy relations with India. On the EU side, the implementation of climate cooperation is said to work well as the two parties have similar objectives and can see the benefits in putting them into practice. As if to underline this, the biggest obstacles in the cooperation tend not to be political disagreements, but rather bottlenecks caused by the lack of administrative capacity in Indian foreign policy institutions.[xxvii] The EU can therefore use climate policy as a strategic means of strengthening its relationship with India even if cooperation in other areas dwindles.

The cooperation between India and the EU also offers both parties a strategic counterbalance to China, which has been taking steps to assert its regional and global power. Some of China’s actions have also been considered aggressively competitive, as it has used export controls and economic subsidies to manage natural resource flows for its own benefit. Sustainable energy is also tightly linked to its Belt and Road Initiative, which has been the main avenue for China to consolidate its geoeconomic power.[xxviii] Even if the India-EU partnership may not be intended as an open challenge to China, it has the potential for increased leverage especially in the regional power relations in Asia.

For the EU, India’s climate policy primarily presents an opportunity for cooperation rather than rivalry. Both parties have mutual economic interests at play, but the ensuing cooperation also contributes to their geostrategic goals.  This further supports the view that, if considered through the taxonomy outlined by Wigell,[xxix] India’s choice of geoeconomic strategy on its global climate policy could best be described as hegemonic – that is, cooperation through economic means. It should be noted, however, that the shift in India’s climate policy is still quite recent and has so far been mainly normative rather than operational. If it is further operationalised into action, it may still elicit more competitive reactions even from the EU.

Conclusion

India’s foreign policy has shifted in decisive ways under the Modi administration. In the effort to reinforce its global role, India has tended to opt for geoeconomic choices rather than merely building up military power. Climate actions have become integrated as a part of such a geoeconomic approach. Climate policy has not only been incorporated into the geostrategic discourse but has provided one way for India to reinforce its role as a globally responsible actor and to promote its international influence.

In the Indian case, climate policy has primarily resulted in a cooperative geoeconomic strategy. The new cooperative attitude in climate negotiations and the establishment of the International Solar Alliance have provided a route to enhanced partnerships and a rising global profile, which also enables India to strengthen its influence in developing countries through climate financing and other kinds of support for development. The cooperative approach makes sense from the point of view of India’s wider foreign policy objective of establishing itself as a globally responsible actor. A more competitive strategy might turn against itself by prompting opposing reactions from counterparts.

The Indian case also gives rise to reactions from other global actors. The interaction between India and the EU shows a case that has led to a highly cooperative strategy on both sides. In purely economic terms, both parties stand to gain from more efficient mitigation of climate change as well as new opportunities for sustainable energy production. However, they both also have a political interest to seek cooperation. For India, the partnership with the EU contributes to the increasingly intensive foreign policy and helps to reassert the country as a global power. For the EU, meanwhile, it offers opportunities for an enhanced role as an actor in the regional relations within Asia.

India is also interesting as a case where climate change has become a geoeconomic policy area in its own right. Instead of merely including climate-related initiatives in its geoeconomic actions, India has essentially used the topic as a part of its strategy. The approach has worked at the global level and in high-level political discourse. Climate change is not an overarching issue in India’s geoeconomic policy, but has been one area where its strategic choices become visible.

With regard to the geoeconomic analysis of climate change, the Indian case shows that climate change and its prevention can generate cooperation between countries and global actors. This is relevant especially with regard to climate security literature, where the focus is usually on the potential for conflict. A geoeconomic analysis does not exclude the conflict scenario but goes beyond to reveal a range of economic and security impacts that have various consequences for international relations, including cooperation.

The geoeconomic approach thus widens the scope for analysing the implications of climate change and its prevention. Moreover, it provides tools with which to examine the contexts and choices that lead to certain policy outcomes. These should be of geostrategic interest to all countries, not only to avert potential threats but also to take advantage of new opportunities. Through such emerging interactions, climate change may contribute to shifts in global power relations. There is a clear need, therefore, for further research on both the concept as well as concrete cases of the geoeconomics of climate change.

About the Author:

Emma Hakala, Dr. Soc. Sci., is a Senior Research Fellow at the Finnish Institute of International Affairs.

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[i] Germanwatch. Global Climate Risk Index 2017. (Bonn: Germanwatch 2016).

[ii] Aniruddh Mohan. From Rio to Paris: India in global climate politics. (New Delhi: Observer Research Foundation 2017).

[iii] Mikael Wigell and Antto Vihma. “Geopolitics versus geoeconomics: the case of Russia’s geostrategy and its effects on the EU” International Affairs, 92 no. 3, (2016): 605–627; Deborah Cowen and Neil Smith. “After geopolitics? From the geopolitical social to geoeconomics.” i, 41 No. 1 (2009): 22–48.

[iv] Mikael Wigell. “Conceptualizing regional powers’ geoeconomic strategies: neo-imperialism, neo-mercantilism, hegemony, and liberal institutionalism”. Asia Europe Journal, 14 No. 2 (2016): 135–151.

[v] Simon Dalby. “Rethinking geopolitics: Climate security in the Anthropocene.” Global Policy 5 No.1 (2014): 1–9.

[vi] Thomas Sattich. “Energy Imports, Geoeconomics, and Regional Coordination: The Case of Germany and Poland in the Baltic Energy System – Close Neighbours, Close (r) Cooperation?” International Journal of Energy Economics and Policy 6 No. 4 (2016); Sanjay Chaturvedi. “India’s quest for energy security: The geopolitics and geoeconomics of pipelines.” In Energy Security and the Indian Ocean Region ed. by Dennis Rumley and  Sanjay Chaturvedi. New York: Routledge 2015..

[vii] Sanjay Chaturvedi and Timothy Doyle (2015). Climate Security and Militarization: Geo-Economics and Geo-Securities of Climate Change. In Climate Terror. New Security Challenges Series. London: Palgrave Macmillan 2015; Richard Youngs. Climate change and EU security policy. An unmet challenge. (Washington: Carnegie Endowment for International Peace 2014).

[viii] Wigell 2016.

[ix] Mohan 2017.

[x] Antto Vihma. “India and the global climate governance: between principles and pragmatism.” The Journal of Environment & Development, 20 No. 1 (2011): 69–94.

[xi] Mohan 2017.

[xii]Navroz K. Dubash “The politics of climate change in India: narratives of equity and cobenefits.” Wiley Interdisciplinary Reviews: Climate Change 4 No. 3 (2013): 191–201.

[xiii] Pant, Harsh V. ed. New Directions in India’s Foreign Policy. (Cambridge: Cambridge University Press, 2018).

[xiv] Ian Hall. “Narendra Modi and India’s normative power.” International Affairs 93 No.1 (2017): 113-131.

[xv] E.g. Vihma 2011; Mohan 2017.

[xvi] United Nations.  Framework Agreement on the establishment of the International Solar Alliance (ISA). Marrakesh 15 Nov 2016.

[xvii] Samir Saran.”Powering India’s growth story.” Business Standard, 16 March 2018.

[xviii] Dhanasree Jayaram. “The International Solar Alliance gives India a place at the global high table.” Climate Diplomacy 2 April 2018; Mohan 2017.

[xix] International Solar Alliance. “Report of the 5th Meeting of the International Steering Committee (ISC) of the International Solar Alliance (ISA).” New Delhi, 25 Sep 2017.

[xx]Mikael Wigell and Ana Soliz Landivar. “China’s Economic Statecraft in Latin America: Geostrategic Implications for the United States.” In Geo-Economics and Power Politics in the 21st Century: The Revival of Economic Statecraft edited by Mikael Wigell, Sören Scholvin and Mika Aaltola London: Routledge 2018..

[xxi] Emma Hakala. India and the geoeconomics of climate change: Global responsibility as strategic interest. FIIA Working paper. Helsinki: Finnish Institute of International Affairs 2018..

[xxii] Youngs 2014; Diarmuid Torney. European climate leadership in question: policies toward China and India. (Cambridge-London: MIT Press 2015.)

[xxiii] European Commission. “Joint Declaration on a Clean Energy and Climate Partnership.” Brussels: European Commission 31 Mar 2016.

[xxiv] Adelphi. “Advancing the EU-India Climate Change Dialogue.” Project Profile, 2016. https://www.adelphi.de/en/project/advancing-eu-india-climate-change-dialogue (accessed 22 March 2019).

[xxv] European Commission. “EU-India Joint Statement on Clean Energy and Climate Change.” New Delhi 6 Oct 2017).

[xxvi] European Commission 2017.

[xxvii] Hakala 2018.

[xxviii] Akhil Deo. (2018). ​“​The International Solar Alliance’s China conundrum​.” The Print 19 March 2018.

[xxix] Wigell 2016.

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