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Climate Change | Shift in stance could redefine India’s growth strategy

Climate Change | Shift in stance could redefine India’s growth strategy

New Delhi: The ministry of environment and forests (MoEF) has called for a high-level meeting next week to evolve a consensus to define a growth strategy for India that would also limit climate change.

The meeting was proposed after Prime Minister Manmohan Singh said after the recent Group of Eight meet in Italy that India, along with other countries, would have to be prepared to make some sacrifices so that the efforts to contain climate change are on course.

Singh was referring to the so-called business-as-usual (BAU) approach, where a country’s growth strategy does not take into account emissions and their impact on climate. This, he argued, was not sustainable.

The MoEF-initiated deliberations, due on 21 July, are critical not only because it will firm up India’s stand ahead of the crucial climate change negotiations scheduled in Copenhagen by the end of the year, but also because it would commit it to an energy consumption standard dictated by environmental concerns.

“Technically, BAU is your trajectory if you don’t undertake specific policy action on emissions. But just like when you are driving at constant speed, then that is your BAU. But if you accelerate, it changes immediately," said Ambuj Sagar, Chaturvedi professor of policy studies at Indian Institute of Technology, Delhi.

In other words, if a country accepts emission cuts, which is proportionately based on a committed growth trajectory, or BAU, then when the growth accelerates, it will have to commit to greater cuts in absolute terms. Experts maintain that for a developing country more susceptible to business cycles, such a commitment can be tricky.

“We have always had the problem of BAU. It is a difficult concept for developing countries; as demand changes, energy efficiency changes, choices change. So, how do we define what will happen?" asked a government official, who declined to be identified.

Experts are surprised at India’s change in stance, especially since the European Union, under the United Nations Framework Convention on Climate Change (UNFCCC), has asked developing nations to commit to emission cuts of 15-20% below BAU levels by 2020.

India has steadfastly opposed emission cuts on account of climate change as it would retard its development and efforts to reduce poverty.

Several institutions and consultancy companies have projected various BAU scenarios. These include The Energy and Resources Institute, the World Bank, McKinsey and Co., National Council of Applied Economic Research (NCAER) and Integrated Research and Action for Development. Each of these is based on different assumptions and arrive at different conclusions on a desirable energy mix.

The NCAER model, for instance, says that India’s per capita carbon dioxide emissions will not exceed 2.77 tonnes in 2031 and a carbon tax will sharply increase poverty. The World Bank says that an integrated energy policy is the best and lowest-cost BAU level for India. McKinsey says solar energy will always be cost-ineffective.

“To do a long-term BAU is meaningless. Maybe for the next 10 years it makes sense, but not for 30 or 50 years. The approach of BAU remains a problem because it grandfathers the past, which is exactly why BAU might make India look good as India is becoming a more efficient economy but it makes the future tougher for us because it assumes continuing improvement in energy efficiency or carbon efficiency at the same rate," Sagar said.

He added that he is sure the government is looking at other options as well. “You don’t need to necessarily look at deviation from BAU. You can also consider and pursue an approach of convergence to a certain level of energy intensity or per capita emissions. This should have been done five years ago."

At the next big meeting of all countries in Copenhagen under the aegis of UNFCCC, the approach of BAU will be pursued as it gains traction with the developed world.

“But if the BAU does become a global standard then the world community will have to decide on a methodology," the government official said.


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