Being penny wise and pound foolish on climate change

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: The recent political drama surrounding the nuclear deal appeared even more spectacular by the lack of discourse on an issue of far more importance. On June 30, the prime minister unveiled the country’s National Action Plan on Climate Change (NAPCC). But the nuclear fracas allowed little else for discussion and India missed an opportunity to get started on forging a domestic consensus on climate change.

The world is in a race against climate change. The current agreement under the Kyoto Protocol extends emissions reductions targets for developed countries through 2012. Last December countries met in Bali and agreed on a two-year negotiation process designed to achieve longer term reductions. Starting August 21, two key working groups have been meeting in Accra, Ghana, as part of the negotiation process. This is the third such high profile meeting this year. A period of two years is hardly enough time to secure an international agreement of the scope that is required. But the parties to the discussion have thus far demonstrated a genuine sense of urgency.

India will be central to the negotiations process. The fate of an international agreement depends closely on emissions reduction action that large developing economies, India and China in particular, can offer. India is one of the largest and fastest growing emitters of greenhouse gases in the world. At the same time, its per-capita emission is one of the lowest in the world and only a fraction of that of developed countries.

India has argued that emissions reduction cannot come at the expense of its national development. Further, India suggests that because industrialised countries have been mainly responsible for the historic growth in emissions, they should have to bear the burden of reductions. Developed countries have argued that a solution to climate change cannot be complete, or may even be meaningless unless countries such as India and China actively participate in the reduction effort. This divide will be hard to bridge but the scientific evidence on climate change overwhelmingly suggests that an international response to climate change must be found quickly.

Despite a year in the making, the NAPCC was never expected to depart from India’s traditional position. Nevertheless, the international community had eagerly awaited its arrival and was promptly disappointed when the NAPCC failed to say much. At home, nobody seemed to notice anything.

The disappointments with NAPCC should not be on what it says or doesn’t say. The real disappointment with NAPCC is the silent domestic reception it received. Climate change, and India’s response to climate change, will fundamentally transform the way we live and alter our underlying social, economic and technological basis. Even if not now, then in the very near future we are going to have to take much more action than what is outlined in the NAPCC. It is important that the civil polity begins to engage immediately to at least begin the process of developing a political consensus. The transformation that will be required from us to respond to the challenges of climate change cannot occur without such a political consensus.

NAPCC’s silent reception also reflects the collective failure of our business community to appreciate the opportunities that climate change represents. We have been so consumed with the pursuit of carbon credits through the Clean Development Mechanism (CDM) that we have had little time to consider the broader context. CDM is a mechanism under the Kyoto Protocol, which allows emissions reduction projects in developing countries to earn credits that can then be sold in international carbon markets. Though CDM has been a success story in India, an appropriate carbon regime could offer far greater and lasting opportunities.

As with any other developing country, India’s struggle is the perceived trade-off between development imperatives and responding to climate change. The NAPCC proposes a directional shift to a development pathway that yields co-benefits for addressing climate change. This is an ambitious transformation and will also be expensive. If faced with competing priorities, it is clear that development priorities will prevail.

Achieving the directional shift to a sustainable development pathway cannot be the result of policy framework or government intervention alone. The perception of a trade-off between development and environmental sustainability must first be overcome. Businesses have an opportunity to help develop a vision where responding to climate change itself serves as the basis for development. For that, boardrooms must first recognise the opportunity that such a transformation represents.

Climate Group, an international NGO, reports that China is already over-taking developed economies in exploiting these economic opportunities, developing low-carbon technologies and adding green-collar jobs.

The climate change revolution could offer a better opportunity for development than the industrial revolution. Indian businesses must recognise these opportunities and support the government in securing an international climate change regime that offers such possibilities.