governance, political economy, institutional development and economic regulation

Posts tagged ‘TERI’

Climate balance sheet post Paris

Paris cops

Paris cops patrol the streets prior to COP21: photo credit: http://www.nytimes.com

The Paris terror attack, days before the COP21 meet, seemed to be the only outlier in the run up to this event. Expectations from the meet were low and procedural, rather than substantive, in terms of doing something concrete and time bound to limit global warming.

There will be a deal…but it will be minimalist…noncontroversial….and most importantly universal…it will not make the commitment or the result legally binding…it will sidestep… review of the INDCs.On additional finance…it will not mention specifics” thereby freeing developed countries from their obligation under the UN Framework Convention on Climate Change to take the first and drastic actions because of their historical responsibility

Sunita Narain, India’s combative, veteran climate campaigner,November 22, 2015.

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The UNFCC (UN Framework Convention on Climate Change) has assessed the Intended Nationally Determined Contributions (INDCs), comprising actions till 2030, submitted by 166 countries as insufficient to hold global temperature increase over pre-industrial levels at the targeted 2⁰C. This is not what signatories to the 1997 Kyoto Protocol intended when they signed on for equitable, differentiated commitments to reduce Green House Gas (GHG) emissions.

The Science Of Climate Change

In the two decades since Kyoto, despite regular conferences of the parties to the UNFCCC 1992, an agreement has been elusive on the timelines and volumes for mitigation actions by specified countries. Adequate finance for mitigations is another problem. Meanwhile GHGs have continued to accumulate and the globe has continued to warm up.

Each of the last three decades has been the warmest since 1880. The global average temperature was 0.8⁰C higher in 2012 than in 1850. The science on what has caused the increase in temperature points to the accumulation of GHG – 78 per cent of which is carbon dioxide emissions from the burning of fossil fuels.

The IPCC (Intergovernmental Panel on Climate Change) in its fifth report in 2014 estimated that the maximum emissions the globe can adjust to, without severe adverse consequences, is around 2900 Giga tons of CO2. Accumulations by 2011 were already 1900 Gt CO2 leaving just around 1000 Gt of carbon space for future emissions. With annual emissions at around 50 GtCO2 in 2010 this leaves just about 20 years (till 2030) to prevent the globe going over the “tipping point”- popularized by the metric of a mean temperature increase of 2⁰C.

“Enormous costs and human suffering are inevitable unless adequate concessional finance drives mitigation aggressively and countries pull together to define a common strategy”

R. K. Pachauri Director General TERI and ex chair IPCC, November 27, 2015

The Conundrum

Collective action involving 196 sovereign nations is a gigantic task. Consider how porous the implementation of the Non Proliferation Treaty 1970, banning nuclear proliferation, has been even though it recognizes just five countries as Nuclear Weapon States.

At the heart of the problem of climate change compliance is the long disconnect between irresponsible behavior today and consequences occurring a century later. Corporate entities and nations rarely strategize beyond twenty years. This implies we should budget for crossing the tipping point. The inevitability of this scary scenario is what most nations – developed and developing – seem to be working towards.

Is there still time to do something?

Rapid economic growth in the developing economies is the best solution to even out the existing asymmetry between the capacity of the developed and the developing world to deal with climate change. But it also advances the “tipping point” by filling up the available carbon space. One-third of the world GDP today and nearly one half of incremental GDP added during the period 2000 to 2014 was contributed by low and middle income countries.

The OECD estimates that its trend growth till 2050 will be around 1¾ to 2¼ per cent per year. Compare this with expected growth in non-OECD countries of 7 per cent till 2020 declining to around 5 per cent in the 2030s and to about half that by the 2050s. Today’s developing countries will account for more than 60 per cent of the world’s GDP by 2030. This will still be less than their share of 85 per cent in the world population of 8.5 billion in that year, as assessed by UNDESA (UN Department of Economic and Social Affairs). But the continuing differential in economic growth will empower these new economies.

The Kyoto Protocol arrangements visualized a static world divided into Annex 1 (industrialized) and other countries, with only the former morally obliged to reduce emissions to “pay for the pollution” they had created. This argument – thin as it was even then – has proved impractical in the face of a dynamic and integrated world economy.

The developing world has copied the carbon-intensive path as it has grown richer. A bald per capita comparison of energy consumption across countries hides the fact that elites in developing countries – who are the domestic role models – are at least as energy profligate as people of a similar income level in the industrialized world. Moral outrage at the profligate West is mere rhetoric. But it is also true that the rich have not uniformly stepped up to the plate. In contrast, several “newly emerged economies”, like India, are pulling above their weight.

Interim strategies till 2030

Some more scientific clarity please

Much of the resistance to spending more on adaptation and mitigation relates to the uncertainty with respect to the timing and magnitude of the impact and the credibility of mitigation options. Diluting the uncertainties can greatly enhance the willingness to invest in green options for growth.

360⁰ strategy for sustainable development

Global climate concerns need to be built into local development strategies. Working bottom upwards rather than the more usual top down approach can pay rich dividends in resolving the presumed trade-off between development and the environment.

Take sea level rise – that most dramatic of adverse effects – which is expected to force people in small islands and low lands to migrate. A Climate Central Research Report estimates that a 3⁰C increase in temperature is expected to result in a rise in the sea level between 4.7 to 8.2 meters and induce displacement of between 255 to 597 million people based on 2010 population levels.

China has the most to lose from habitat disruptions followed by India, Bangladesh, Vietnam, Indonesia, Japan, the United States, Philippines, Egypt, Brazil, Thailand, Myanmar and the Netherlands, in descending order. Land use and building regulations can regulate further construction in the areas to adapt infrastructure to the likelihood of being inundated. But as the recent Chennai disaster shows, government and citizens are not sensitized to this threat.

Taxing land use appropriately can boost local government revenues whilst also optimizing land use, resulting in more energy efficient cities and villages. A 360⁰ approach to sustainable development, as embedded in the Sustainable Development Goals adopted earlier this year, is the way to go.

Compensate for the conservation of natural resources

Just as forests are a carbon sink, coal or oil reserves, left unexploited in the ground, are also voluntary economic sacrifices. Compensating the public or private owners could incentivize conservation. Of course there are political economy issues associated with compensatory transfers. Natural resource rich countries may be non-democratic and dictatorial. Some oil rich regimes in West Asia use oil wealth to indirectly support the political use of terror. Empowering such governments with fiscal transfers may cross humanitarian and security “red lines”. But the principle can be applied selectively to freeze the threat of incremental carbon emissions.

New institutional arrangements

Effective institutions raise the benefits of cooperative solutions or the costs of defection, to use game theoretic terms

Douglass C. North, Nobel Laureate and Institutional Economics Guru.

-Douglass_North

Institutional change imposes costs. But it can be the game changer for getting results by aligning incentives with outcomes. We would do well to recall this central thesis of Nobel Laureate Douglass C North, Institutional Economist, who passed on last month. Changing the institutional framework within which foreign aid works and international cooperation arrangements are structured can have similar outcomes.

Incentives for improving cooperation

Unless shifts in the international economic fundamentals are explicitly recognized and factored into the architecture for cooperation, useful outcomes become prisoners to the asymmetry between intent, capacity and authority of individual countries. Implementation of the long sought for reforms in the governance of multilateral institutions could be one option to signal the need for emerging economies to play a more substantive role.

Going beyond voluntary pledges of finance

Additional finance is critical for mitigation. The existing arrangements seek to funnel additional funds provided by developed countries into the Green Climate Fund. But only $10.2 billion has been pledged against the targeted annual receipt of $100 billion by 2020. Dwindling growth, ageing populations and a reducing share of the rich countries in the world GDP are unlikely to create the political economy drivers for making them more generous.

“India is pulling above its weight to contain climate change. But without similar additional effort from the legacy economic powerhouses, achieving the target of 2⁰C is tough. No developing country should be pushed into having to trade-off growth for environment.”

Ashok Lavasa, Secretary Environment. Government of India, November 27, 2015

Lavasa

A universal “carbon tax” is an alternative, straight forward approach. But it raises implacable issues of equity based on differential natural endowments and differential access to technology across countries.

Show me the money!

A better proxy of wealth to tax is cross-border investment. Imposing a tax on international capital flows, at a time when liquidity needs to be enhanced, does not make intuitive sense. But the distortionary impact can be minimized by keeping the tax at low levels making it too fractional to inhibit individual transactions.

The annual flow of cross-border private investments (debt, portfolio and foreign direct investments) has reduced significantly since the downturn of 2008 but the IMF still estimates it at US$ 4 trillion. Capital exporting countries also tend to be those which are growing well. Green bonds are already in the market. One driver of cross-border investments is the search for higher returns abroad or risk diversification. These drivers are unlikely to be diluted by a marginal tax on private capital outflow. The green tax could be a significant and buoyant source of green finance.

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Time is running out. The existing clunky climate arrangements are broken. A new institutional framework is needed to integrate growth, development and environmental preservation. Improving the science of climate change is critical for a nuanced least-cost assessment of the balance between mitigation and adaptation. “Value for money” must replace today’s environmental theology to make people willing to pay for change.

Adapted from the authors article in http://swarajyamag.com/world/beyond-the-paris-meet

Male bias: death by a thousand cuts

death

Photo credit: dangerFantastic.BlogSpot.com

To everyone’s relief, the Governing Council (GC) of TERI appointed a new Director General to replace Dr. R. K. Pachauri (RKP). Seemingly, it was moved to act in response to a lower court ruling staying the operation of the findings of the Internal Complaints Committee (ICC).

The law at work…and play

The Committee findings must have damned RKP, which is why he agitated the matter in court. The stay was based on the evidenced argument that principles of natural justice were not followed by the ICC, thereby disadvantaging the respondent (RKP). Hearings on the issue will continue. But the practical outcome was that RKP resumed work. He had voluntarily proceeded on leave, when the criminal complaint was lodged. There was no legal bar on his rejoining albeit, rather awkwardly, having to operate away from the Head Office and the Gwal Pahari campus, where the complainant works.

Corporate honchos call the shots

The GC which includes luminaries from the business word, academia and government had little choice but to end this Kafkaesque comedy by choosing a DG to take operational control of the institution. In doing so they wisely acted in compliance with the highest standards of corporate governance. No employee should even potentially be able to directly or indirectly use her position to compromise the due process of law.

A professional and a gentleman

Their choice of the new DG-Dr. Ajay Mathur, an ex-senior employee of TERI, is impeccable. A multi-talented engineer (like RKP) turned environmental and energy efficiency policy wonk, with a stellar track record- he has the advantage of straddling both the real world of green technology and the more rarified world of economics and global climate finance.

The ongoing case of sexual harassment against RKP will carry on. Given the convoluted judicial process we follow, the “truth” will likely emerge only in the mists of time, long after the media has lost interest. But four home truths bear attention in the meantime.

Shoddy, knee-jerk laws

First, even our most recent laws lack a comprehensive world view. The 2013 amendments to the Indian Penal Code and the new act extending protection from sexual harassment in the workplace, only protect women. As a first step this is unremarkable in a world dominated by men in powerful executive positions.

But powerful men sexually harassing male subordinates is not breaking news. Why a similar avenue for redress in the workplace should not be available for harassed men is unclear. It shows a tendency for legislators to react to populist vigilantism and not from deep conviction that sexual harassment is an infringement of the workplace rights of any employee.

Bad laws result in perverse incentives

Second, draconian laws do not a more caring or equal society make. On the contrary, draconian laws to protect human rights coupled with a judicial process which lacks the advantage of speed and suffers from an excess of procedural compliance, is a sure recipe for gaming.

In such institutional environments- like the US- the advantage is invariably with the unscrupulous; the rich and the wily. The outcome is a high incidence of miscarriage of justice. This is also the argument against irreparable damage imposed by the State, as in the case of the death penalty. India would do well to abolish such arrogant assumptions of judicial infallibility.

That we need to do much more to protect basic human rights, including the specific case of women, goes without saying. But nuance, granularity, comprehensiveness and proportionate disincentives are the corner stones of good law.

Pious intentions but perverse outcomes

Third, bad laws lead to perverse outcomes. Take for instance the outcome of the 2013 laws. Male Chief Executives now implicitly discriminate against hiring women to work in their personal office to guard against inadvertent transgressions of the law. This discrimination can be neutralized if there was similar protection for male subordinates from a harassing boss. The gender preference for male executive assistants would narrow once the risk of inadvertent sexual illegality is equalized. But a narrow legislative view on the sexual harassment of only women, never created the space for such balancing mechanisms.

Advancing gender parity in the real world

Fourth, is it time that India prescribes quotas for women in power? Moving to a more gender equal world should be a priority.

(A) All government quotas for jobs, promotion or education should have a gender component. This will address the incentive for discriminatory resource allocation to males per the traditional gender roles within the family.

(B) Political parties should be legally bound to field an equal number of women candidates for elections as men.

(C) Government budgets should be gender responsive.

(D) All state owned enterprises and banks; Public Private Partnerships and companies in which the government is a significant (26%) shareholder should be required to publish a gender breakdown of employees by levels/grades with the intention of reaching gender parity, unless special circumstances apply.

(E) The July 6, 2015 judgement of Supreme Court Justices Vikramjit Sen and Abhay Mohan Sapre amends Christian personal law to allow an unwed mother to be the guardian of her child and thereby “legalize” the child’s parentage. The SC Justices based their decision on the generalized principle that in a secular country, religious practices can be divorced from law if they transgress human rights.

Similar progressive changes must be made in the personal law of communities to erode the legal dis-advantages women face in exercising their right to family property, inheritance and maintenance.

The legislative approach to gender parity is no more than a flag, signifying that India is responsive to international trends. We need to detox formal and informal Institutions which perpetuate gender discrimination. Death by a thousand cuts is the way to go.

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The Pachauri saga: why did the dog not bark?

pachauri

(photo credit: article.wn.com)

The case of Dr R. K. Pachauri, Director General, TERI and IPCC Chair, is curious, precisely because the dog never barked.

Odd, because the alleged, continuous, sometimes physical, invasion of privacy with sexual overtones, apparently happened near continuously since 2013 in the heart of the India Habitat Center, one of the public buildings designed by Joseph Stein, the well-known German Architect and India lover just before he died in 2001. This is a popular, cultural hub and hangout for artists, the literati, social activists, gourmets and retired folk, which attracts over 30,000 visitors every month and where TERI, the NGO Pachauri heads, is housed in a five story high standalone office. TERI and Sunita Narain’s Center for Science and Environment are the two premier Delhi think tanks on energy and the environment.

“Quiet” some-times, partly consensual, sexual alliances of varying degrees are not unknown between powerful chief executives and compliant assistants. Indeed, the worst sexual assaults happen within the home away from public scrutiny.

What is strange is that such alleged behavior was possible in TERI over a period of two years (2013 to 2015) with none the wiser. TERI has a staff of 1200 of which around 35% are women. Women are at the helm in 30% of the high level professional positions.

That so many women, including those in high level, authority, positions, either did not know of the plight of the assistant or chose to ignore it sounds odd. Why didn’t some dog bark?

One strand of thinking credits RKP, as Pachauri is known, with Machiavellian might and control over his entire staff. Pachauri has a larger than life persona which feeds this perception. He is also the author of a salacious novel – an act of bravado he will surely come to regret. He is a charismatic figure, who has as many friends as he has enemies. The reason is obvious.

There are two kinds of highly successful people. Those who are content to enjoy their success privately and retain a “humble”, low key, exterior. Pachauri is not one of those.

He conforms more closely to the braggart, Richard Branson variety, He is over-the-top- in his choice of headgear (he wears a toupee); in his selection of ties and cravats and in the flamboyant style of his clothes although abstemious in his habits; a workaholic who needs little sleep and travels constantly as TERIs main outreach resource. He is also a fanatic for workplace ethics; expects total devotion to work from staffers and leads by example.

TERI’s Delhi Sustainable Development Summit (DSDS), just concluded on February 7 was attended by international luminaries, heads of multilateral development institutions and the leading lights in domestic natural resources management, business and government. A fitting tribute to the convening power of TERI, a child that Pachauri grew over 40 long years since 1974, from a one room outfit in Mumbai to an international network of committed professionals with a common concern for sustainable development.

The aggrieved staffer first approached the TERI internal committee for sexual grievances on February 9, the first working day after DSDS ended, in a sequence of events paralleling the earlier Tejpal case in Goa. What is it about huge, international conferences which either emboldens hitherto compliant assistants into “coming out” or conversely, aggravates the ferocity of the pursuit by the aggressor?

The complainant next filed a complaint with the police of February 13, following which the police acted rapidly and impounded what could be “incriminating” evidence” like computers and other communication equipment from Pachauri’s office.

The fear, voiced most vociferously in social media, is that Pachauri, a part of India’s privileged elite, will get away with his alleged indiscretion. This shows how slowly public perception changes. Escaping the law may have been possible till 2013. Among the many legislative initiatives the previous Congress government launched was amendment of the criminal laws to explicitly criminalise sexual harassment; voyeurism and stalking and impose heavily punitive sanctions including imprisonment.

Like all laws seeking to change behavior – in this case the behavior of men versus women- the law is draconian in the belief that it should scare sexual offender off and should be “stringent” enough to extract “judicially intermediated just-deserts” for such offenders.

The machinery of law is already at work. Pachauri is fearful enough of arrest to have sought anticipatory bail which he now has till February 26. The police are investigating and gathering evidence in the meantime and will file a “charge sheet” in court if a prima-facie case is made out. If this happens Pachauri will have to fight the case in court which is likely to be a long haul. RKP is stuck in this imbroglio for now.

The real issue is can TERI survive without its “Banyan tree”? Over the past four decades, RKP and TERI have spawned a large number of professionals, who today, are either in high level positions in TERI; business; multilateral and bilateral entities; NGOs and government. Will this band of professionals pull the “mother ship” out of stormy waters? Or will it be a case of studied silence and hands off a sinking ship? Watch this blog.

(Disclosure: This writer worked in the energy practice of TERI for five years from 1995 to 2000).

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