Environmental sustainability is fast becoming a strategic priority around the world. In recent years, governments, corporations, individuals and non-profit organizations—in both the developed and emerging economies—have intensified their sustainability efforts. The reasons might differ—ranging from rising oil prices, concerns over depletion of fossil fuels and global warming to the larger need to save our planet for future generations—but the aim is similar.
The Kyoto Protocol, an environmental treaty linked to the United Nations Framework Convention on Climate Change, has been employed differently since it first came into effect in 2005. The protocol offers flexible mechanisms such as emissions trading and clean development mechanism (CDM) to help developed nations meet their greenhouse gas (GHG) emission reductions by purchasing carbon offsets from developing nations.
In fact, Asia currently accounts for at least 75% of the world’s total carbon projects, and is expected to hold 80% of carbon credits by 2012. India is already the largest producer of carbon credits in the world, with at least 900 carbon credit projects already on, and around 180 more such projects likely to be added every year.
However, world opinion is currently divided on the efficacy of carbon offsets in addressing the larger issue of eco-sustainability. Critics suggest that CDM encourages the developed world to purchase carbon offsets from emerging nations, while not doing enough domestically to mitigate GHG emissions. Further, emerging economies such as India and China are being criticized by the developed world for their growing contribution to GHG emissions; this despite the fact that developed countries such as the US are among the top emitters of GHG.
Let us look at this matter from a different perspective. Instead of limiting the discussion to GHG emissions, what if we considered the sustainability issue from a holistic viewpoint and linked it to the No.1 priority of emerging nations: economic development?
Sustainability projects in the emerging economies can be viewed as enablers of inclusive growth. By boosting employment, they can alleviate poverty while accelerating the fight against climate change and environmental degradation. But does this make economic sense? Is it cheaper for emerging nations to invest in eco-sustainability? When it comes to costs of setting up green infrastructure, emerging nations definitely have the upper hand thanks to lower labour costs and less expensive domestic inputs.
Currently, most of the focus around green infrastructure is on renewable energy projects that are validated under CDM since they lower the carbon intensity of energy supply. But energy-efficiency projects may be better: They lower energy utilization through cogeneration plants that simultaneously use energy for heat and power, or the creation of energy-efficient buildings. Both of these are essential, especially in the emerging economies, and I believe a lot can be done to generate clean energy, optimize existing energy utilization or both.
Leveraging the advancements in technology, power generation companies could help improve their efficiency. This would even allow real-time monitoring, control, maintenance and protection of these power systems.
This is clearly an opportunity for emerging nations to move towards a low-carbon economy in the long term, and reap the resultant benefits. Communities of tomorrow can effortlessly capture the twin goals of sustained economic growth and environmental preservation by developing infrastructure and investing capital and talent in eco-sustainability.