An inclusive climate deal is what CoP-26 must deliver
4 min read . Updated: 28 Oct 2021, 10:06 PM IST
PremiumPrivate-sector investment might have to finance climate action in terms of an energy transition but these could involve complex contracts for which developing countries lack regulatory set-ups
CoP-26, or the Conference of Parties, will meet in Glasgow from 31 October to 12 November. More than 20,000 delegates representing 195 countries are expected to negotiate a better climate deal. A central aim of the 2015 Paris Agreement was to keep the global rise in temperatures from exceeding 2°C above the pre-industrial level and ideally keep it below 1.5°C. The latest report of the Intergovernmental Panel on Climate Change (bit.ly/3mjfpgk), however, indicates that if urgent action is not taken to meet this goal, climate catastrophes will loom large on the planet’s future. This year alone has seen an unnerving proliferation in extreme climatic events—from droughts to floods to wildfires. While developed nations pledged to contribute $100 billion annually to help developing countries transition to clean energy, this spending target remains mostly unfulfilled.
The US climate finance contributions have been rated by the Climate Action Tracker (bit.ly/3Er7O5l) as “critically insufficient". This unwillingness of the planet’s second biggest emitter of greenhouse gases to pay for change has adversely affected the will of developing nations to phase out their energy dependency on coal and other fossil fuels.
From the perspective of developing nations, in particular India, the Glasgow summit holds critical importance. India’s per-capita energy consumption is a third of the world’s average. A key issue for India, with our large energy dependence on fossil fuels, revolves around phasing out coal. This concern needs to be evaluated from two vantage points: India’s economic recovery post-covid, and the generation of employment-led economic growth opportunities.
India’s government and central bank brought out a stimulus package amounting to 11% of gross domestic product (GDP) for recovery from the pandemic. However, this was mainly aimed at supporting fossil-fuel dependent industries.
Coal mining has been opened up for commercial auctions for the first time since the 1970s. Beach sand mining (curbed earlier by the current government) has also been cleared for private-sector investment.
Research (bit.ly/3jGrcUk) shows as many as 744,984 people in India are directly employed by the coal industry, with hundreds of thousands more connected through the informal sector. Clamps on fossil fuel-dependent industries would leave millions of workers jobless. Still, it isn’t as if India has done nothing. A big fiscal push has been made for electric vehicles in India’s fossil-fuel dominant automobile sector.
Under the Paris Agreement, India committed to reducing the greenhouse gas emission intensity of its GDP by 33-35% by 2030 relative to 2005. Using natural gas reduces such emissions as its combustion emits about half as much carbon as coal does.
India also said it will install 450 gigawatts of renewable energy capacity by 2030, of which 100 gigawatts had been installed as of August.
In 2017, the government announced that it would increase the share of natural gas in its energy mix to 15% by 2030. As of September, it made up just 6.5%.
India is promoting natural gas as a “transition fuel". This is because renewable energy, such as from wind and solar, is intermittent and dependent on weather conditions. For a completely renewable-energy based economy, India will need capacity to store power, but battery storage is currently expensive.
Having said that, India’s progress in developing robust climate-sensitive infrastructure and ensuring a swifter transition to clean energy remains slow, and without a coherent climate-action based national plan.
Most developing countries have made climate action conditional on more climate finance from developed (and higher emitting) countries, so that their growth is not hurt.
However, the flow of larger climate aid or development assistance may not be swift enough. Special climate bonds have been suggested as one mode of finance. The problem, though, is that most developing countries lack a sound regulatory and legal framework to manage private-contracts and transactions for ‘newer financial means’, within the green energy market. However, it is also true that the global private sector market has been positive about increasing its scope of investment in renewables. Given limited public-financial support, the private sector has a key role in driving the green-energy transition.
Still, any big investment would require a conducive political environment and regulatory mechanisms to attract more private players to the renewable-energy market and keep it competitive. Else, a growing green- energy market would risk getting monopolized—or oligopolized—by big capital. This could yield an energy cartel, as in oil.
While richer countries at CoP-26 will push for ‘net zero emissions’ by 2050 to save future populations from ecological vulnerability, poorer nations must also grapple with the fact of climate change, given how ecologically and economically vulnerable their people are. An inclusive approach to climate action at a multilateral level must therefore get underway and go beyond negotiations. Big techno-economic ideas, while often eloquently put, must not leave socio-economic variables out of the design and actualization of a ‘global policy’ for developing nations. This has been a challenge for previous CoPs. Let’s hope CoP-26 offers a step forward.
Deepanshu Mohan & Krishanu Kashyap are, respectively, associate professor of economics and director, Centre for New Economics Studies (CNES); and a research analyst, CNES, O.P. Jindal Global University.
