Institutionalizing Net zero

India bought transition time at Glasgow by committing to net zero carbon emissions only by 2070. Advanced economies have mostly clustered around a nearer time frame of 2050, as befits their culpability, in depleting the global carbon envelop, and their enhanced technological and fiscal resources.

China chose emissions peaking “before 2030” but a long transition period till “before 2060” for net zero—a nod to their developing country status and competing development needs but perfectly in consonance with the principle of “differentiated responsibilities”. Indonesia followed the Chinese lead.

The more distant Indian cut-off date is intended to assure an orderly transition; though long-term planning rarely aligns with the short-term democratic political cycle. Commitments in the far future could become little more than inconvenient cans kicked down the road to future administrations.

Consider than 88 percent of the Lok Sabha—India’s directly elected, national assembly—is above 40 years of age and one-third of the Indian population is more than 35 years—mostly presently active workers, who are unlikely to experience the pain of energy transition. But India is a young country and the specifics of climate action affecting jobs, income, or well-being, matter to two-thirds of Indians, who are less than 35 years of age.

The waning of global collaboration?

Can global collaboration allay the apprehensions around the economic disruptions from climate action like the “end of coal” hailed at Glasgow? Consider also the global headwinds ratcheting up contestation between China and the United States and their respective allies or the weaponization of international trade and the jury is still out whether the gains from an open, rules-based, global economy, enjoyed over the past three decades, will last for the next three.

Nevertheless, peace and poverty elimination are two shining examples where long-term global collaboration, efficient monitoring of outcomes, and layered negotiation fora have forged a protracted era of prosperity.

To be sure, endemic violence is still widespread and countries do lapse into turmoil—Myanmar and Ethiopia being two recent examples. There are 22  conflict-afflicted states and another 17 which are institutionally fragile. But international merchandise trade doubled from 19.4 percent of global GDP in 1970 to 41.6 percent in 2020, helping in diluting global poverty, which, using the headcount metric of income below US $1.9 per day (2011 PPP), declined from 42.7 percent in 1981 to 9.3 percent by 2017. In India, the headcount poverty level, by the same metric, reduced from 63.1 percent in 1977 to 22.5 percent in 2011. The Sustainable Development Goals now target ending poverty by 2030.

Reading the Tea Leaves

Just as surely, the continuing foot-dragging by advanced economies in providing committed bilateral assistance of US $100 billion per year by 2020, for the energy transition, illustrates that countries will have to be self-sufficient in attracting private finance to fill the gap.

The Modi government is cognizant of the lonely economic battle ahead to pursue mutually contradictory goals like providing resources for carbon emission containment whilst also tackling poverty alleviation – evidenced by the fiscal rectitude it practiced, maintaining macro- economic credibility, even as global fiscal fashion urged loosening the purse strings, during the COVID-19 pandemic.

The government’s muted response to the Talibanisation of Afghanistan—a geo-destabilising feather in the cap of new “all weather” friends Pakistan and China—is another illustration of the caution with which it proposes to navigate peripheral threats and provocations from China, consequent to India seeking comfort within the club of US allies- the “Quad” being just one example of joined up sovereign compacts.

Domestic challenges dominate

Fixing the global circumstances to suit our needs is an important but perpetually uncertain endeavor, given our limited economic heft. We are proactively global. But till we can add more economic substance to our external relations, we will remain “deal takers” not “deal makers” as Glasgow showed. A US $5 trillion economy based on high single digit growth remains the primary economic target for India to pursue. Note that President Xi Jinping did not bother to grace Glasgow physically, consistent with his view that the international rules-based economic order is hollowed-out. China, with current per capita GNI at US $10,610 (2020), one-sixth that of the United States, but growing at twice the rate, can choose to remain truculent or deign to comply—diplomatic latitudes, unavailable to India.

No time to be sanguine

It would be a mistake to assume that the disparate, albeit economically efficient, carbon emission containment pathways initiated already—rapid growth in solar energy, electrification of land-based transport, industrial and residential energy efficiency, and more adroit forest management—can prepare the groundwork for emissions to peak by, say 2050, tapering thereafter to net zero.

The quantum of economic change required is far more substantive than the one occasioned even by the 1991 liberalisation. At the time, the international experience of other economies, which had navigated similar structural hurdles and prospered—the UK, Germany, Australia, South Korea, and Southeast Asia—reassured late starters, like India, that economic reform was possible without unbearable economic pain or loss of sovereignty.

Today, such reassurance is scarce for the likely “losers” from low carbon growth. Existing, well paid, narrowly skilled jobs in manufacturing linked to fossil fuels and the internal combustion engine powering transport could end over the next two decades. New opportunities in the manufacture and maintenance of motors, related electronic equipment, battery manufacture and maintenance will become available. But it is unclear whether the industrial cost-saving opportunities offered by the troika of digitalisation, 24X7 robots, and Artificial Intelligence (AI) coupled with the continued privileging of capital investment over labour, via tax policy, will leave sufficient room for cost-competitive, human effort. Add to that, the low access to high-quality public education in India. Managing the inevitable churn in national skill sets and insulating the losers from economic distress will become critical public administration skillsets, not widely available today.

A broader agenda for change beyond reliance on technology

It is instructive that the “Mid-Century Strategy” of the United States targets an 80 percent reduction in emissions over 2005 levels effectively reducing its per capita CO2 equivalent emissions to just below 3 tons—slightly more than what India emitted in 2018. It notes that technology alone will be insufficient, unless supported by wide-spread policy initiatives in agriculture, soil, and land management, building codes, spatial planning, and negative emissions from bioenergy with carbon capture, utilization, or sequestration. It also plans to enlarge its land carbon sink by 45 percent recovering one-third of the forest land lost to urbanization and industrialization since 1850, thereby, absorbing 14 percent of COemissions.

Sadly, this is not an option for land-starved India since the per capita availability of arable land is less than one-fourth of the US. Nevertheless, the principle of formulating a comprehensive cost strategy for optimising the containment of emissions to within the per capita global average emissions, over time, is worthy of emulation.

A three-point action agenda

First, legislate an empowered Climate Change Council (CCC) headed by the Prime Minister with all the Chief Ministers represented, as a single-point custodian for climate action. To evoke participation and cooperation from states, cities, and rural local bodies, it should be a decentralised, inclusive platform with presence in state capitals and all “smart” cities, and should be jointly administered by the line ministries dealing with energy, environment, science and technology, and external affairs. National and state-level climate adaptation plans prepared a decade back could form the basis for more aggressive  mitigation strategies and the use of emergent technological options like green hydrogen.

Second, governments remain central to successful climate action via supportive domestic incentives and facilities for collaboration. But climate action must be broad-based with corporates, business associations, and non-state actors encouraged to link into the respective domestic and international alliances emerging around the central theme of net zero.

Our domestic experience in containing emissions is richly varied. The Star Rating programme of the Bureau of Energy Efficiency made energy use standards for appliances a popular metric for institutional and retail purchase decisions. EESL Limited—a jointly owned public sector affiliate—demonstrated scale effects from public sector bulk-purchase, lowering the cost and boosting the demand for LED bulbs. Similar, scale effects can deepen the markets for electric vehicles, energy efficient agricultural equipment, building materials and construction practices.

Finally, a granular, evidenced policy document on the nature of the challenge and opportunities for climate action, consistent with economic growth, jobs, education, skills adaptation and publicly-financed social protection systems for insulating workers from tectonic shifts in employability, would allay fears and build the consensus for low carbon growth.

The economic transformation started in 1991 as an immediate response to a fiscal crisis, remains incomplete three decades since. A top-down measure, it assumed that more politically contentious micro economic changes would follow. Sadly, economy-wide reform has remained dormant, as evidenced, by the long-term economic slowdown we are presently navigating. We have now bought the time to make the transition to net zero more orderly and deeply transformative. Developing a “just” climate action strategy, ground upwards, could tap the wellsprings of the popular imagination and fuel foundational support.

First published by the author on orfonline.org November 12, 2021 https://www.orfonline.org/expertspeak/institutionalising-net-zero/

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