‘We need a business case for clean tech transfer’

Font Size

Print

Feedback

Email

Discuss

Related Articles

Gold the most preferred investment

: Yvo de Boer heads the United Nations Framework Convention on Climate Change (UNFCCC) at a very crucial time. There is an unprecedented spotlight on the climate change issue today. The formal negotiations on the successor regime to the Kyoto treaty on reducing carbon emissions began at the UN Climate Change Conference in Bali late last year. The executive secretary was in Delhi recently to speak at Teri’s Delhi Sustainable Development Summit 2008. FE’s Rajiv Tikoo spoke to him to get an insight into the role of the private sector in the climate change negotiations. Excerpts:

You attended a CEOs’ forum at the Teri summit. You had a meeting with business leaders at the climate change conference in Bali, too. How productive is your engagement with the private sector?

We have got quite a lot of inputs from the private sector. The sector is giving us two messages. First, the governments need to provide a clear sense of direction and right policy frameworks. Secondly, there is a need for mechanisms for financial and technical cooperation that will push into the market technologies that can’t make it on their own. So, the private sector has a very important role to play in designing frameworks from their point of view. The International Energy Agency has calculated that about $20 trillion will be required over the next 20 years to meet growing energy demands. And 86% of the investment is expected to come from the private sector. So, you need the private sector to tell you what would work and what wouldn’t.

What is your impression about the Indian private sector’s position on the issue?

I have the feeling that Indian industry is only beginning to see the possibilities of benefits that international cooperation can offer. With so many small and medium enterprises, the country should have a big interest in reducing its energy bill, and at the same time limiting emissions in this sector. We should be focusing more on this target group.

Most of the carbon credit trade takes place among developed countries. How can the share of developing countries increase?

First of all, if industrialised countries take on more ambitious targets, the size of the clean development mechanism (CDM) pie will increase significantly. What we can do in the next round of talks is to simplify the CDM procedures. The market is important, but we also need to have government to government cooperation. The market will always seek the cheapest options out there and not automatically follow policy directions. If the Indian government decides to improve the energy efficiency of all the cement kilns in the country by a certain percentage, you will need some government to government cooperation to get it going. You can’t rely on the market alone. Similarly, if India were to increase the share of the renewable energy, it’s more logical for the government to step in. It could still be done through mechanisms that create a carbon value, but the market is not going to do all of it by itself.

Finally, when will clean technology transfer from rich countries to developing countries take place?

You see, technology is mostly owned by the private sector. The private sector will invest only if there is a market. It’s a matter of creating the market that will move the technology. I don’t think there are very many technologies in the public domain that governments can just give to other governments. There has to be a business case for it. Secondly, in countries like India where you have so many small and medium enterprises, you need very targeted mechanisms, almost on company to company basis, to tell people what can be done to improve energy efficiency, and then the appropriate technology can follow.

The Adaptation Fund got a shot in the arm in Bali. What are your expectations from it?

As you know, it relies on a levy on CDM and we have not begun to auction those emission rights as yet. There are 2,000 projects in the CDM pipeline right now. Though I expect the resources for CDM to grow, we are going to need a lot more.

Where will the money come from?

In the case of small and medium enterprises, a part of the money will come from the companies themselves because it will lower their energy bills. Secondly, a part of the money can come from the carbon market because that will be a way of generating carbon dioxide credits. Thirdly, I see the potential in the government to government cooperation in the future.

How soon do you think all this is likely to happen?

I don’t see that happening until we complete the next climate change conference in Copenhagen.

What do you think of the new climate change fund set up by the US? Are they getting serious about addressing the issue?

I think they genuinely mean it. What really struck me is that the treasury officials, while announcing this fund, said it’s in America’s national interest to help developing countries acquire the technology they require. I see this sign as a fundamental shift in their mood. Today the discussions focus on tapping the opportunity of exporting clean coal American technologies to China, which is a win-win deal for both the countries.

Getting the US to join the Bali negotiations was the easier part. How optimistic are you that they will take on emission cuts?

I think it’s a matter of picking your topics carefully and then taking up the right topic at the right time. I think the idea of internationally agreed targets is not something you can usefully discuss with this administration because they are not interested in it. On the other hand, you can have a useful discussion on what type of long-term goals we should be having. You can have useful discussion on sectoral approaches rather than focusing on national goals. You can talk usefully on financial mechanisms about adaptation and the transfer of technology. There are many useful discussions you can have with this administration now. Some of the political things may need to be left out as of now.

The US led the recent meeting of the major economies on climate change in Hawaii. Do such parallel initiatives supplement or detract from the official negotiations?

They absolutely help. We need every opportunity that we can get to explore issues informally apart from the negotiated process. For example, the major economies’ process is important because this particular group of countries contributes 80% of the global carbon emissions. If they can develop a better understanding of the way forward, I think it’s a very useful contribution to the process.

The last year saw the mid-term review of the millennium development goals (MDGs), reports from the Intergovernmental Panel on Climate Change, Nobel Prize for advocacy on climate change, and finally the Bali meet? Will the fatigue cause a bit of lull now?