Modi’s dream of 5 trillion Economy: Action on Climate Change is the Key

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We can forget COP 25 but not the Mega Opportunities. India can reach its goal of USD 5 trillion through the Low-Carbon economy.

By Rajendra Shende, Chairman TERRE Policy Centre, former Director UNEP and IIT Alumni.

The article also appeared in South Asia Monitor ( SAM) under the title: “Ambitious Climate Action can help India reach 5 trillion economy goal”

Many would prefer to forget the 25th Conference of Parties, called COP 25, of the United Nations Framework Convention on Climate Change started in Madrid. Started with a fiery backdrop and dire consequential warnings in the 2019 ‘Emission Gap Report’ of United Nations Environment Programme (UNEP) and 2018 report of Intergovernmental Panel on Climate Change (IPCC) 2018, it ended as the longest UN climate negotiation meeting with the minimal outcome.

The messages from these two reports are unambiguous. The current climate commitments pledged by the countries under the Paris Climate Agreement of 2015 are miserably inadequate to meet its goal. The rise in global temperatures with those commitments would be 3.2 deg C this century as against the Paris agreement target of 2 deg C. Report gave scorching observation that temperatures have already increased by 1.1°C, leaving families, homes, and communities in all the regions of the world from the Arctic to the Antarctic and from Amazon to Australia totally devastated.

IPCC report stated that global CO2 emissions must decline by about 25% by 2030 and reach net zero around 2070 to limit the temperature rise to 2 deg C above the pre-industrial level.

The resounding message was: countries, therefore, need to close the ‘commitment’ gap between what we say we will do and what we need to do to prevent dangerous levels of climate change. We cannot wait for the start of the action to shift to a decarbonization pathway now. The goals of limiting the temperatures are getting closer to the brink of becoming impossible.

Strangely a page from Paris Climate Agreement seems to be holding the world from proceeding. The most critical rulebook of a market mechanism known in the parlance of UNFCCC as ‘ Article 6’, was to be formulated in COP 25 so that its application starts from 1 January 2020 to kick-off implementation of the full Paris Climate Agreement. Rule-book of Article 6 was the only unresolved issue contained in the nine closely worded paragraphs in one page of the agreement that has now proved so contentious. COP 25 was unable to agree on that.

Even UNSG Antonio Guterres who normally scripts failures of UN meetings as ‘mixed successes’ tweeted at the end of the COP 25, ‘I am disappointed with the results of COP25. The international community lost an important opportunity to show increased ambition on mitigation, adaptation & finance to tackle the climate crisis’.

Is the world now on the impossible-edge? Hanging on the climate-cliff?

When I moved around in Madrid’s crowded conference halls there was no indication that nearly 30,000 participants, including about 14000 government delegates were showing the signs of being on the brink. They did complete discussion on other important issues like mechanism on compensation for loss and damage associated with Climate Change, guidance to funding bodies like Global Environment Facility (GEF), Green Climate Fund (GCF), Chile/Madrid Time for Action, capacity building, technology transfer carryover of the commitment by the developed countries from Kyoto Protocol, Adaptation Funds. But those routine outcomes were really inconsequential compared to the precipice that the world is standing against.

Except for the welcome announcement of carbon neutrality by 2050 by EU, hardly any country provided any concrete actions for raising ambitions over and above what they pledged in Paris Agreement. The finances provided till now under GEF, since its inception, are about USD 5 billion and GCF of about USD 18 billion ( of which 13 billion was co-financing and in-kind). These figures looked pittance against the promises given by developed countries of USD 10 billion annually since 2009, progressively increasing to USD 100 Billion annually from 2020. The conclusion was clear, there are not only decades of ‘emission gap’ and ‘funding gap’, but there is also a ‘trust gap’ between what is promised by the developed countries and what is performed by them.

Would resolving Article 6 brings us back from the brink?

Article 6, which has a combination of market and international cooperation mechanism is considered as innovation in selling the emission achievements by the country that has set up emission reducing mechanisms or beaten its Paris climate pledge to a nation that has fallen short against its own goals. This would be the new Sustainable Development Mechanism ( SDM) against CDM ( Clean Development Mechanism). Article 6 also includes grants and development aid as part of the climate cooperation mechanism. The challenges are the agreeing to the web of technical words each of which has a legacy of more than two decades of political connotations, that get intensely complicated due to the situation of small island countries and least developed African countries who have to depend on non-market mechanism.

Then there are opponents to market mechanisms who quote Albert Einstein, “We can’t solve problems by using the same kind of thinking we used when we created them”. Markets and their indiscriminate use to make profits at any cost are at the very bottom of the present climate crisis. How can we now hope to build on those market mechanisms to solve the climate crisis?

What are the implications for India?

India had a very organized approach. Prakash Javadekar, Minister of Environment, Forest and Climate Change ( MOEFCC) had skilfully got the prior-approval of the cabinet on its negotiating stand. India’s balanced strategy in COP 25 has been appreciated. The climate experts like Nobel Laureate Al Gore had praised India’s serious efforts in raising its solar energy target from 175 GW ( which India is well on the way to meet ) to 425 GW, accelerated start of implementation of the Electrical Vehicle ( EVs) targets, nation-wide

distribution of LPG gas for cooking and giving up the subsidies, creating LED revolution at literally ‘ lightning’ speed, incentivizing energy efficiency nationwide, setting up carbon tax and increasing the green-cover to create carbon-sink as reported by NASA. “ If India can do it why not the developed countries?’ roared Al Gore in Madrid from the podium in front of thousands of applauding audiences, where I was present in the front line. I heard the Minister of MOEFCC, ‘ India is walking the talk. Let us implement what is already agreed under the Paris Agreement and let developed countries fulfill their promises of financial assistance and meet the carry-over of the commitment from Kyoto’.

Are India’s actions on the climate crisis enough? No.

As per the UNFCCC report, only six countries are on track to meet their commitments under Paris agreement. India is leading the list. But considering India’s ancient and cultural DNA of living with nature and its soft-power for technology innovation and its internationally proven competence to forge the partnerships like International Solar Alliance, it is poised to do much more. Compliance with the Paris agreement cannot now be the goal. India has to go beyond compliance. Time has now come to undertake decarbonization of the Indian economy with the speed and scale as was done in case of demonetization.

India’s PM Modi, accoladed as ‘ Champion of Earth’ by United Nations and awarded at the hands of UNSG, has the courage to take such steps. Any wavering from the steps already taken, like the recent proposals of scrapping the coal tax to temporarily boost the economy would jeopardize India’s commitments for renewable energy and protecting the farmers as well as poor sections of the society in long term. PM Modi’s goal of 5 trillion economies by 2024 would be at risk unless the climate crisis is accounted for.

As per the 2018 report of the Global Commission on Economy and Climate, the world is the cusp of a new growth era, one where growth will be driven by the interaction between rapid technological innovation, low-carbon infrastructure investment and sustainable policies.

Ambitious climate action across key economic systems—energy, cities, food and land use, water and industry—can lead to higher productivity, more resilient economies and greater social inclusion. It will be the growth story of the 21st century.

It is also a USD 26 opportunity for the world, as per that report. A simple calculation shows that if India can take 10 percent of that share of opportunity and add to present GDP ( nominal) USD 5 trillion economy looks not far away.

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