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NITI’s vision 2032 disappoints

NITI vision 2

NITI vision 2032 : foggy, disjointed & barely hanging together

Prime Minister Narendra Modi and the chief ministers of states spent most of Sunday deliberating over the plans and prospects for India in the next 15 years to 2031-32. The third governing council meeting of the Niti Aayog seems to have been an underwhelming affair, judging from the two presentations put up on its website. Why this listless thinking?

Great expectations

Three years ago, when the dowdy Planning Commission was transformed into a glitzy Niti Aayog, expectations were high that it would be the loci of innovation and cutting-edge analytics in public policy. The Planning Commission was merely an extended office of the Prime Minister. Chief ministers, whilst supposedly integral to the National Development Council (NDC), which the commission serviced, felt like interlopers rather than participating members. The flamboyant J. Jayalalithaa used the NDC forum like a television station — walking in to deliver her speech and then walking out. Others stoically suffered the process, making debating points, that no one heard.

New beginnings

Some of that has changed. Mr Modi has done away with the elevated podium of yesteryear for the PM and Union ministers. Now all are seated at the same level around a round table. Another first — the meeting was held at Rashtrapati Bhavan. Symbolic, as our head of state is not the PM, but the President, with whom the Union and state governments have an independent constitutional equation. In deference to the beacon ban, the long line of official cars streaming into the venue were minus their flashing red lights, thereby letting the tricolour atop Rashtrapati Bhavan take pride of place. On optics, the arrangements were perfect.

More optics than substance

The substance, however, seems not to have been as uplifting. Five examples will illustrate.

Lacks credibility

indian dream

A car for every household – is this the Indian dream?

First, a 15-year vision which is not nuanced enough to reconcile trade-offs lacks credibility. To aim to make India a prosperous economy by 2032 is a pie in the sky. India can, at best, and that too with enormous effort, go from being a lower middle-income country (per capita at current $1,600) to become a middle-income country (per capita current $4,800). A very long shot from being prosperous. The per capita income (at current US dollars) in Latin America and Caribbean today is $8,415, while in East Asia it’s at $9,512. There is no way we can catch up to even these levels by 2032. Consider also that the high growth rates required to make this jump could negatively impact equality. The international experience amply demonstrates that high levels of growth come with the risk of increasing inequality. There is not a whisper in the vision statement of how we propose to navigate the trade-off between growth and equality — the latter being part of the PM’s vision.

More of the same

brick stacks

Second, the Niti Aayog’s vision statement is backward looking. It ignores the dislocation caused by technological developments which technology leaders like the Chinese entrepreneur, Jack Ma have been warning against. NITI aims to make India a highly-educated country by 2032. Should we not be looking, instead, at becoming highly skilled? We are already battling progressive robotisation. By 2032, artificial intelligence would have squeezed jobs further in traditional sectors. New jobs, 10 million a year, which we require and still don’t have, are only likely in highly specialised areas — like space travel, frictionless transportation and psychological counselling — niches which are not easy to robotise, rather than general education which we value today. By 2032, just as plumbers, carpenters, masons and welders would be obsolete so would equity traders, bank clerks, low-level lawyers and IT workers. We will still need pure scientists, social scientists and engineers, but in limited numbers, We already produce 2 million of these every year. But very few are of cutting edge quality. Our challenge is to develop innovative minds with appropriate skills, not to educate 400 million of our under 18 years population to become “thinkers” – the bulk of the thinking will soon be done by machines. Humans will need the skills required to choose and make wise decisions, intermediate between humans machines and train other humans to work with machines. No sign of this transformation in the vision.

Not joined up – conflicting objectives

oil pollution

Third, the vision statement wishes India to become “energy abundant”. But being energy abundant is a retrograde desire tinged with the potential for waste. Energy abundance means energy prices tumbling, spurring even more per capita consumption of energy. Surely this is incompatible with the other objective of being “environmentally clean”? Are we really aiming to provide a car or a motorbike to each household, as the vision proclaims, or do we wish to make public transport the most convenient option? Should we not be allocating funds to become energy efficient rather than spending on acquiring or developing more energy resources? The hunger for energy abundance is a stale ambition.

Mushy & emotional, not pragmatic

Fourth, the Niti Aayog aims to make us a “globally influential nation”. How is one to go about this Dale Carnegie-type revamp? India has thumped the tables of the United Nations for over five decades. And yet, suddenly today, we are more influential globally than ever before because of our large, growing markets, relatively easy access for foreign capital and technology, facilitating internal institutional arrangements and stable polity. Influence is an outcome of domestic capacity, confidence and conviction. These 3C’s are the drivers we should be looking at. Best, like Arjun, to aim for the eye of the bird and not get distracted by the clouds floating around.

Process matters for cooperative federalism

Fifth, the Niti Aayog was constituted to showcase cooperative federalism and be the entry door for its implementation. But it remains poorly organised for living by this principle. Its staff should be deputed both by the Union government and directly by the state governments, much like multilateral entities operate. It must have a permanent secretary-level board to review and clear documents to be presented to the governing council, and provide a forum for discussion and implicit negotiations between officers from the Union and the states deputed to the Aayog. The governing council should structure meetings to provide for negotiations at the political level to evoke the spirit of cooperation and collaboration. Currently, the council functions more as a receptacle for the views of state governments and offers an opportunity for the Union government to tell states what it is doing, just like the Planning Commission used to do.

Put some flesh on the vision

famine

The vision unveiled, yesterday, is muddied by a vast array of disjointed initiatives, thereby reducing the clarity of purpose expected from such a document. Words matter and must be used selectively and deliberatively. Otherwise a vision is nothing but a laundry list of wishes. For years the World Bank “dreamt” about a world free of poverty. It now recognises that wishes need to disciplined to the takable actions to convert wishes to reality.

The public expects much, much more than old wine in new bottles from Mr Modi- especially over the next decade. He and the outstanding talent in the Aayog, must allocate time for thoughtful negotiations at multiple levels. There is no other way to make others — particularly the state governments — feel like valued members of the same Team India!

Adapted from the authors article in The Asian Age  April 25, 2017 http://www.asianage.com/opinion/oped/250417/niti-aayogs-vision-2032-disappoints.html

PM NITI 3 GC

 

Book Review: Just erratic not deranged

ghosh

Amitav Ghosh’s latest book—The Great Derangement—is an exploration of why contemporary culture, imagination and political systems have failed to prevent global warming, despite its cataclysmic long-term effects and disruptive short-term outcomes.

His choice of the book’s title reflects the conundrum facing poor nations. They are not the ones who benefited from the carbon economy. But to aspire to do this now, when there is no carbon space left, is a one-way ticket to self-annihilation. Hence, the derangement of the modern world, racing towards a future, where consuming itself becomes the only option. Curbing global warming means debunking the fundamental values on which the modern world is built. Central to this artifact is the notion that man is the centre of the universe. Non-human forces, like nature, have no place in this calculus of liberty and modernity.To recognise global warming as a problem, you first have to reject the paradigm that the unconstrained liberty of man is a leitmotif of human progress. Hence the unwillingness and the inability to face or deal with the problem.

Nature’s pawns

This is a cleverly crafted book, as would be expected from a novelist extraordinaire. Divided into three parts, it starts with “Stories”. This segment situates humans as powerless, organic sub-systems of a larger force—restless and dynamic nature. Stories of his family—climate refugees from Bangladesh; of self-doubt after a sudden, destructive tornado in Delhi; of raw beauty and sudden death in the muddy, torpid, densely tangled greenery of the Sundarbans reinforce that we are not masters of the universe.

Inequality and the urge to splurge

The second section on History, draws together three defining strands of the late 17th to the early 20th centuries. First, the availability and use of fossil fuels which were an important precondition for wealth and power. Second—the use of technology to improve productive capacity. Third—the growth of modern empires as the political mechanism for extracting the supply of raw materials; controlling access to technology and keeping overseas markets open for exported manufactured goods. Empires faded in the late 20th century but the extractive process continued. The elite—foreign and domestic—comprise not more than one fourth of the world population, but continue to become wealthy at the expense of the bottom three fourths.

gas-guzzler

The third section is on Politics. Ghosh argues cynically that so little has been done to mitigate climate change because the rich world will be able to insulate itself from the horrific outcomes. The shock will primarily be borne by the poor. Littoral countries like Bangladesh, Seychelles and Vietnam and poor communities, within countries, will be the worst affected.

A captive media

Ghosh believes the deafening silence in the media around climate change is because it has been bought out by the huge corporates who own fossil fuel assets. The silence in literature is because his peers—writers, poets and intellectuals—are bludgeoned into conformity by the formulaic path to success of shunning the unpredictable and situating a story within the predictable activities of everyday life, with the individual as the central character.

Can religion help where politics has failed?

Not much can be expected from politicians either. They are so immersed in “bio-politics”—catering to the short-term interests of a defined population of voters—that they have little appetite for long-term global risks. For what it is worth, differences in economic ideology across parties have become minimal in India. All the political parties which have ruled India since 1991 have adhered to the broad neo-liberal construct of economic development. So, quite possibly, the devil lies in the incentives created by this economic model to produce and consume in larger volumes. He cites the December 2016 Paris Agreement as subterfuge and doublespeak, promising to do much without, in effect, doing anything.

He compares this shallow and evasive, politically negotiated international agreement with the direct and forceful Encyclical Letter of Pope Francis issued at the same time. The latter fingers the ruling “technocratic paradigm” and the objectification of endless growth as the problem rather than the solution. It calls for tempering individualism with the balm of social and ecological justice. Ghosh notes that similar voices are being heard within the Hindu, Muslim and Buddhist faiths. This leads him to believe that greater community activism led by religious leaders could be the answer to mobilize opinion for definitive steps to abate global warming.

naga

Ghosh’s stand is unusual for a secular rationalist. But this is consistent with an approach which absolves religion of its divisive outcomes. He speculates (page 150) that Mahatma Gandhi was assassinated by a former member of a Hindu party because he was perceived as weakening India by opposing industrialisation and consumerism. No references are quoted to support this “economic” explanation. The more usual view is to attribute the killing to Hindu apprehensions that the Mahatma was too politically accommodating of minority interest.Ghosh also seems to step lightly away from the conundrum that using religion for secular purposes is akin to riding a tiger, particularly in India’s surcharged environment, perpetuated by religious faultlines. Indira Gandhi paid the price for doing just that.

The world is increasingly more not less sustainable

 

cyclists

Ghosh’s rhetoric is elegant and elegiac. His reasoning is impeccably logical. But his morbid assessment of where we are today and of our future prospects does not triangulate with reality. The world is becoming less carbon-intensive. Every incremental unit of output requires less energy than the previous one. It is true that explosive economic growth in Asia since 1980 has negated this advantage and the global mean temperature continues to increase. But renewable energy options are being developed for air, road and marine transportation, thereby further diluting the link between the use of fossil energy and economic growth. Similarly, technology developments like LED lighting have vastly improved the efficiency of energy services. Climate risk is increasingly being factored into the cost of insurance and the hurdle rate of return for investors. This will drive smart green investments.

We are winning the war on poverty

International aid agencies, governments—of which China is the exemplar, and communities, all working in tandem, have successfully reduced poverty and are on track to eliminate it by 2030. Yes, inequality is on the rise but at a significantly elevated base income level. The opening up of international trade has diluted the link between political domination and market access. Even small nations like Vietnam or Mauritius have benefited from international markets. International trade has democratised resource endowment by making petroleum, minerals and metals available to resource-poor countries. Three out of the four largest economies today—China, Japan and India—are natural resource-poor. They have grown over the last half century by importing fossil fuel and technology. None of the three tops the charts in military might.

child

Choice and progress

The spread and deepening of democracy has expanded opportunities for the disadvantaged and smashed earlier glass ceilings, including for women. Adoption of the open economy model has expanded imported competition while deregulation has nurtured domestic competition, for the benefit of consumers. There is more choice today than at any point in history.The world is a more peaceful place than a century ago. That this holds true despite growing sectarian violence in India’s near abroad and an increase in the number of nations armed with nuclear weapons, illustrates the high stakes everyone has in an enduring peace.

Plurality rules

Today, plural models for progress exist. These models are not country or culture specific. They are instead domain specific. Of the top 20 corporates in the world which accumulated the maximum value over the period 2009-2015, not a single company was in oil or gas; as many as eight were in technology or health care. All of them excelled at the capacity to innovate, communicate and compete. It’s a new world out there which defies explanation using traditional paradigms.

None of this means that we are on top of the problem of global warming, yet. But just as surely, there is more light visible, at the end of the tunnel, than has ever been seen before.

telescope

Adapted from the authors essay in Swarajya October 7, 2016 http://swarajyamag.com/magazine/its-not-that-scary

 

India’s “green” moves

solar-shade

Solar powered sun and rain shades in India!

India formally ratified the Paris climate agreement on Sunday, notwithstanding that Donald Trump trashed global warming, last week, as a hoax and efforts to control it as expensive and ineffective.

The United States contributes around 16 per cent of world carbon emissions. Truculence in its approach to manage global warming can scuttle the efforts of the rest of the world. Mr Trump’s cavalier approach to climate change can only be explained by his belief that a slowing US economy should not be the one which pays to set the world’s climate right.This abdication of international leadership appears to resonate with his not inconsiderable supporters.

Clearly, the expectation is that China, which contributes 28 per cent of global emissions, needs to step up to the plate of international burden-sharing. China is now the world’s second largest economy. Despite the slowdown it is growing at three times the rate of the American economy. That is reason enough for higher expectations from it to play the role of a global leader.

china-smog

Photo credit: huffingtonpost.com

India is also a fast-growing economy. In the long term we may be where China is today. But not for a while yet. We are just one-fifth of the Chinese economy. Our emissions are just six per cent of world emissions. Our global ambitions should be commensurate with our constraints. This is why, unlike China, we have not committed to cap our emissions at a predetermined level.

Paris – the agree to disagree concord

Under the Paris climate agreement countries have agreed to disagree. It is now left to individual nations to exercise “strategic direction” in developing their future energy profile and “tactical restraint” in energy consumption.The decentralised responsibility is welcome but worrisome on two counts. First, countries which are too small to make a difference but which will face the wrath of global warming like island countries now have to depend not on covenant but on the generosity of others to survive. Second poor, technologically deficient countries will now pay more to mitigate global warming since there are no pressing compulsions for the rich to change consumption patterns or develop carbon benign technology for domestic use.

India’s challenge is to remain green

green-house

Laurie Baker’s characteristic green building in Kerala

Altogether 37 per cent of India’s energy consumption is non-fossil fuel based. This is fairly similar to the world non-fossil fuel energy consumption of 33 per cent. But the big difference is that bio energy accounts for only two per cent of the world’s green energy consumption, unlike in India, where biomass accounts for 92 per cent of the renewable energy used.Hydro power and new renewables — solar and wind- account for just six per cent and nuclear for two per cent of our green energy profile.

india-cooking-2

The challenge for India is to ensure that as incomes grow, poor consumers – who use non commercial biomass sources today like dung, firewood and agricultural residue for heating and cooking – should graduate to new renewables like solar and wind, rather than go down the fossil fuel route, as the OECD countries have done. This challenge is principally for the government, not consumers. Consumers typically want energy services — cooling, heating, cooking and transport. They don’t really care about the fuel that provides these services. It is for the government to put in place the incentives which drive energy suppliers to provide renewable energy services.Energy users are underserved in India particularly in dispersed habitations. This presents the opportunity to use renewables to bridge the gap in innovative ways.

To be sure, domestic compulsions like smog do compel us to clean our energy profile. India already has economic incentives in place for this. High energy prices induce energy efficiency in industry. High taxes on petrol and diesel are expected to result in frugal consumption for personal transport. Scarce public funds are allocated to subsidise renewable electricity. Investment in public transport is being stepped up to substitute high energy-intensity personal vehicles. Rail freight has been reduced to stem the shift to the more energy-intensive road transport. Bulk public purchase and supply of low-energy intensive LED bulbs help manage domestic electricity peak load. The path to carbon sustainability is fortunately closely aligned to the the path to make our economy competitive by squeezing out the fat along he supply chain. But gains in the efficiency with which energy services are delivered  can only mitigate, at best, around 20 percent of our additional energy needs.

The compulsions to consume more energy services are stark.India’s per capita energy consumption is just 0.6 tons of oil equivalent (toe) versus global per capita consumption of 1.9 toe. India will likely consume four times the energy it does today to provide welfare enhancing energy services to its citizens. Similar compulsions face most developing countries in South Asia and Africa.Only a technological revolution in clean energy and in energy storage systems can delink the growth led increase in energy consumption from unsustainable levels of carbon emissions.

Target renewable energy services

Setting up clunky publicly owned entities to research and transfer renewable technology to industry is not the way to go. Backing selected private firms willing to invest in renewables in anticipation of an assured domestic market is also tough. We don’t have the democratic space in India, unlike South Korea, to back industrial winners.Transparent subsidies on the “viability gap funding” template will suit the private sector best to innovate, implement and increase the consumption of renewable energy. Shifting the subsidy from energy generation to the provision of energy services can enlarge the pool of potential investors whilst retaining the objectives of efficiency and effectiveness in subsidy provision.

solar-bus

Prime Minister Modi flags off a solar bus service for MPs

Link green subsidies explicitly to revenue – social cost based levies on fossil fuel and a green cess

India’s clean energy strategy is built around the principle of minimising environmental damage whilst maximising economic growth. But the implementation of good principles also needs accurate and timely monitoring mechanisms to ensure that progress is along the desired trajectories. One such mechanism is to monitor the social cost of our fossil energy consumption and to use the data for fiscal allocations. The Arvind Subramanian report on pulses has suggested the inclusion of social cost, with respect to water intensity, while determining the maximum support price of agricultural food products, to ensure that subsidies do not deplete our water reserves. This is a good way of allocating public resources.

Social cost filter for resource allocation

If a social cost filter is adopted for allocating finances, public investment in the railways and in coastal shipping would surely trump investment on road transport. This is also a good mechanism for making users pay differentially for the energy they use. Charging more from those who use electricity at peak time is justifiable beyond the additional financial cost it imposes, to being an affirmation of commitment to going green. Habitats, offices and homes all impose social costs and must be taxed in proportion to the extent of their footprint. This “green tax” should be used to directly subsidise green energy and energy conservation.

A green balance sheet – green tax revenue and expenditure 

The government should consider including a green fiscal resources allocation and tax collection balance sheet along with the annual financial budget. This would provide, at a glance, the revenues collected by taxing fossil fuel and the capital allocated for green energy initiatives. Similar green fiscal resource balance sheets at the state and municipality level could feed into a green national fiscal framework.

India has traditionally punched above its weight in international affairs. Preserving the global commons is a lofty goal; an opportunity to upstage the international economic Goliaths and to improve well-being at home.

laurie-baker

Laurence Wilfred “Laurie” Baker 1917-2007 – architect & practioner of the science of living comfortably with nature. Seen here with his wife Elizabeth, in their home in Thiruvananthapuram, Kerala.

Adapted from the authors article in Asian Age October 4, 2016  http://www.asianage.com/columnists/green-taxes-cleaner-india-600

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