The Prime Minister’s national action plan on climate change is expected to be unveiled later this month, after nearly a year of consultation.
Since the Prime Minister’s council on climate change first met last July, new scientific evidence suggests that climate change is happening faster than expected, and the consequences may well be more severe. Ice sheets and glaciers are melting much more rapidly than earlier forecasts predicted, creating dangerous feedback
loops that further increase atmospheric concentration of carbon dioxide. Research published in April by Nasa scientist James Hansen and others suggests that we are ever nearer a dangerous tipping point, after which change could spiral out of control. (Two years ago, Hansen said we had 10 years to avert the tipping point; new data seems to indicate that we have even less time.) The conservative assessments of the Intergovernmental Panel on Climate Change now look increasingly optimistic, and the extent of emissions reductions required far larger.
India needs a climate change action plan and the political will to execute it in step with the magnitude of the challenge. We are sitting on a huge opportunity to harness our vast human capital, scientific prowess and entrepreneurial zeal to develop and deploy the technology to both mitigate and adapt to climate change. In the process, we can wean off from reliance on imported energy and export technology to other developing countries. We can also shore up long-term inclusive growth, something that requires diversification of energy sources.
Speculation has already begun on the contents of the plan. I’d like to offer my own “wish list” of measures, compiled from the Centre for Development Finance’s ongoing research on low carbon growth. Here it is:
One, a climate czar. The reported turf war behind the scenes of the Prime Minister’s council is proof of the need for a single central authority to coordinate the government’s response to climate change. The person should be a non-partisan figure with the authority and goodwill to align competing interests and ensure the government’s unified action both domestically and in international negotiations. His/her office should be staffed with scientists and economists who can perform scientific and technical analyses to inform policy and plans.
Two, an energy efficiency revolution. The government estimates that more than 23,000MW of energy can be saved through energy efficiency — more or less equal to the current peak energy deficit. India needs energy efficiency standards for industries, equipment, buildings and transport in line with international best practices, bolstered by clear punitive measures for non-compliance. The government should provide financial incentives to SMEs, farmers and municipalities to adopt energy-efficiency measures and to state electricity boards, utilities and distribution companies to stem transmission and distribution losses, which officially amount to 31% (but could be much higher).
Three, incentives to drive massive investment into renewable energy. Appropriate feed-in tariffs will make investment in renewable energy attractive. Let’s follow the lead of Germany in this arena. Although Germany receives only about half the sunlight hours of India, it has become the world leader in solar photovoltaic installation and production, thanks to its renewables policy. The generation-based incentives for solar energy announced by the government earlier this year are a start, but our consultations with practitioners suggest they will have to extend beyond the first 50MW of installed capacity per state to encourage the level of investment needed to make solar a competitive alternative to conventional fuels.
Four, government-supported clean-tech and agriculture research and development (R&D) funds. Rather than wait for technology transfer to trickle in through the Clean Development Mechanism, let’s fund domestic clean-tech R&D to bolster our position as a clean-tech provider for the global South. As for agriculture, we should be alarmed by the very real possibility that Haryana and Punjab — India’s bread basket — may look like Rajasthan in less than 50 years’ time. With agricultural productivity on a steady decline, large-scale investment into research for new land use methods, cropping pattern, seed varietals and irrigation techniques is long overdue. At the same time, we need investment to develop and deploy techniques to reduce India’s greenhouse gas emissions from agriculture, which currently contribute about 20% of total emissions.
Five, eliminate subsidies on conventional fuels. British economics firm Lombard Street Research put the cost of India’s fuel subsidies in 2007 as high as $17.5 billion, or 2% of gross domestic product. How about transferring this money into a fund to support renewable energy and energy efficiency? The kerosene subsidy alone costs at least Rs10,000 crore annually, an amount that could be used to scale up the deployment of off-grid renewables in rural areas. Lessons from our base of the pyramid energy research indicate that off-grid power and light sources can be supplied at affordable, competitive rates. Strategically deployed in the form of smart subsidies or loan guarantees, an off-grid renewables fund would catalyse the growth of this important market.
There is a compelling case for action on multiple fronts to contain climate change. Governments across the globe will need to implement these measures and many, many more to protect the planet and fulfill worldwide growth aspirations. The challenge demands — and India deserves — a pragmatic and visionary strategy that propels us to the forefront of global leadership in the fight against climate change.
Shaanti Kapila is the programme head for environmentally sustainable project finance at the Centre for Development Finance of the Institute for Financial Management and Research in Chennai. Comments are welcome at email@example.com