India no longer needs international cooperation to decarbonise itself and needs to pressure countries to remain ambitious, including wealthier countries that need to act domestically and support developing countries in the transition to a green economy. Similarly, China today is the world’s largest issuer of green bonds, a new way to fund “green” projects.
So says Simon Zadek, co-Director with the UN Environment Programme’s (UNEP) Inquiry into the Design of a Sustainable Financial System. The Inquiry is an international platform for advancing national and international efforts to shift the trillions of dollars required for delivering an inclusive, green economy through the transformation of the global financial system.
With solar procurement bids in India now below the cost of coal, action in this and other areas no longer needs international cooperation to decarbonise, Zadek told IANS in an email interview. Similarly, within a few years, there will be massive deployment of battery technology and electric vehicles.
India must be concerned, however, that climate change is addressed for its own secure development and needs to pressure all countries to remain ambitious, including wealthier countries that need to act domestically and support developing countries in the transition, he said.
Zadek was replying to a question: With President Trump mulling a possible pull out of the 2015 Paris Agreement, do you think this will impede or demotivate developing countries like India and China to continue on its path to decarbonise?
Speaking at a UN energy forum in Vienna on May 11, Power Minister Piyush Goyal said: “The road from Paris to India today has been somewhat bumpy. We will have to sort that out. But I’d like to reassure each one of you here today that India stands committed to its commitments made at Paris irrespective of what happens in the rest of the world.”
According to Zadek, China has adopted literally hundreds of policy steps in encouraging the transition to a low-carbon and sustainable economy, many of which are reflected at a high-level in its 13th Five Year Plan.
“Of notable importance is massive policy and fiscal support for sustainable infrastructure (especially in the mobility and energy spaces but also water, sanitation, land use, etc.), the State Council adopted recommendations to green China’s financial system, and the countrywide carbon market.”
The UNEP expert, who has advised companies worldwide on sustainability issues, and until recently lived in China, believes there will be no successful “brown” economies in the 21st century. “So the transition is an imperative, and an early transition offers so many first mover advantages to China that catalysing it with fiscal and other policy support makes sense.” Zadek said funds from international frameworks like the Green Climate Fund (GCF) would not help transition in countries like India and China.
The GCF and other international public funds are far too small to play any significant role for India or China, except in catalytic and experimental roles such as encouraging the use of blockchain and other digital technologies to ease and lower the cost of international capital.
The GCF is a unique global initiative by the United Nations Framework Convention on Climate Change (UNFCCC) to respond to climate change by investing into low-emission and climate-resilient development.
On China’s investments in its green programmes, he said the People’s Bank of China estimates that $600 billion a year is needed to green the country’s economy. “Today the numbers are far from that but progress is being made with China’s levels of green credit having hit almost 10 per cent of total banking sector portfolios and China today being the world’s largest issuer of green bonds.”
On steps India could take to accelerate decarbonisation of its economy, he said: “Much more of what you are already doing, ramping up clean energy, including distributed solar for isolated, unconnected communities, shutting down your coal build pipeline for simple economic reasons and preparing India’s innovative entrepreneurs to move heavily into clean mobility.” He favoured transforming India’s domestic financial system to make it fit for the purpose and so enabling the country reduce dependency on expensive international capital.
India’s draft “Ten Year Electricity Plan” calls for a staggering 275 GW of renewable energy by 2027, in addition to 72 GW of hydro and 15 GW of nuclear energy.