The country has the scope and space to be a global climate action leader.
As we mark the fifth anniversary of the signing of the Paris Agreement on 12 December, reports released by the UN organisations show that the planet is hurtling towards a climate catastrophe.
The 'State of the Global Climate 2020' report, published by the World Meteorological Organisation (WMO), shows that with the average global temperature reaching 1.2°C above the pre-industrial level, the year 2020 is on track to be one of three warmest years on record and 2011-2020 will be the warmest decade on record. Despite the novel coronavirus disease (COVID-19) lockdown, atmospheric concentrations of carbon dioxide (CO2) have continued to rise and exceeded 410 parts per million (ppm) in 2020. The last time the Earth experienced a comparable concentration of CO2 was 3-5 million years ago when the temperature was 2-3°C warmer, and sea level was 10-20 metres higher than now. The report also records increasing wildfires, new extreme temperatures on the land, sea and especially in the Arctic, and a record number of hurricanes in the Atlantic.
The 'Production Gap Report 2020', a major UN-backed analysis, found that instead of reducing fossil fuels' production, countries are actually increasing coal, oil, and gas production. The report finds that countries plan to produce more than double the amount of fossil fuels in 2030 than would be consistent with a 1.5°C temperature limit. In fact, G20 countries have committed over $230 billion in fossil fuel industry to revive the economy in 2020 compared to $150 billion in clean energy. Australia, Canada, India, Russia, and the US, are currently pursuing major expansions in fossil fuel supply.
The 'Emission Gap Report 2020' released by the UN Environment Programme (UNEP), projects that despite a 7 per cent decline in CO2 emissions due to COVID-19 in 2020 compared to 2019, the current policies of the countries would put the planet on a path to a 3.2°C temperature increase this century. A three-degree world will have devastating consequences on communities, economies and ecosystems, especially in the developing countries. The 2020 report shows that G20 nations, who account for 80 per cent of global greenhouse gas (GHG) emissions, are collectively not on track to meet their Paris Agreement commitments. Countries like Australia, the US, and Canada are falling short of achieving their targets, while India, China, the EU, and Japan are on track to meet their Nationally Determined Contributions (NDC). But the report concludes that the current NDCs of all countries are highly inadequate. Countries must at least triple the level of ambition of their current NDCs to have a chance of keeping the global temperature rise under 2°C; to keep temperature rise to 1.5°C, they must increase their ambitions five-fold.
From the above reports, it is quite clear that the world is facing a climate crisis. So, why is it that five years after the signing of the "historic" Paris Agreement, the global efforts to fight climate change is failing? What has been the role of India in the framing of the Paris negotiations? And, what role can India play to turn the tide and galvanise global action on climate change? These are some of the questions that this article attempts to address.
The Paris Agreement
Article 2 of the Paris Agreement requires countries to limit warming to below 2.0°C (measured between the years 1750 and 2100) and "pursue efforts" to limit warming to 1.5°C. In contrast with the Kyoto Protocol, it places the obligation to reduce emissions on all countries, not just developed ones. By allowing countries to set their own national targets - NDCs, it enables them to self-differentiate their efforts based on their contribution to the problem and capacity to limit emissions.
In an ideal world, considering the climate emergency, countries would have followed the letter and spirit of the Agreement. They would have completed the 'Paris Rulebook' to operationalise the Agreement and agreed to limit warming to 1.5°C after the dire warning of the Intergovernmental Panel on Climate Change (IPCC) in 2018. Developed countries would have taken the lead in cutting emissions and supported developing countries through finance and technology, and developing countries would have announced ambitious emissions reduction plans and adaptation strategies.
But we do not live in an ideal world. In the last five years, the US has withdrawn from the Agreement, the differences between the developed and developing countries have deepened, and countries have refused to enhance their emissions reduction ambition, apart from the token announcements of reaching net-zero emissions by the middle of the century. Let's look at each of these issues one by one.
The role of the US
Within six months of coming into office, Donald Trump announced the US's withdrawal from the Agreement. It is essential to recognise that the Agreement was designed to facilitate US participation in the Paris Agreement. The US had walked away from the Kyoto Protocol, saying that countries such as China and India were not reducing emissions and hence, it would not participate in a "flawed" treaty. So, for the first time, all 194 countries pledged emissions reduction, even when most of these countries had not contributed to climate change. As the Obama administration faced stiff resistance from the Republican-dominated Congress and Senate, the Agreement was made non-legally binding and non-punitive. So much so that the Paris Agreement's four-year withdrawal process was synchronised with the US election cycle. So, on 4 November 2020, the US has formally withdrawn from the Agreement, and Joe Biden has announced his intentions to re-join the Agreement in January 2021.
Therefore, the US role has been extremely damaging to the 'goodwill' factor of the Paris Agreement. Besides, while on its way out, the Trump nominees, along with other big polluters, have fatally weakened the Paris Rulebook. Going ahead, this US-centric nature of the Paris Agreement will have to be marginalised. The world can't afford the domestic politics of one country, even though the most powerful one, to hijack the planet's future.
Developed vs. Developing
Though the principle of equity and "common but differentiated responsibilities and respective capabilities (CBDRRC)" has been significantly weakened under the Paris Agreement, developed countries still have to take the lead based on the principles of 'self-differentiation', and they have also agreed to support the developing countries with finance and technology.
But developed countries did not deliver on their targets under the Kyoto Protocol. Many of them, especially the US, have also reneged on the pledges they made at the 2010 Climate Change Conference in Cancun. In fact, the US is projected to achieve its Cancun Pledge only when the expected impact of COVID-19 is considered. Also, at Paris, developed countries committed to raise $100 billion per year in climate finance for developing countries by the year 2020; the latest available estimate of annual finance raised is $38 billion. The developed countries' failure to meet their past commitments has deepened the divisions between the developed and the developing countries. It has also hampered the development of the Paris Rulebook.
In 2018, IPCC released a report on Global Warming of 1.5°C, which made it clear that the world has to decarbonise drastically by the year 2050. This raised pressure on governments to enhance NDCs and announce mid-century decarbonisation targets (often referred to as 'net-zero' targets).
Several countries have responded, including several developed countries, which now target net-zero by 2050. Most significantly, China this year set a decarbonisation deadline for the year 2060, and Joe Biden has promised to set a 2050 net-zero deadline for the US. India has not set a net-zero target so far and is facing pressure to do so.
While net-zero pledges are required, short-and-medium-term climate ambition (in the form of regular updates to NDCs) is more important. The cumulative effect of current NDCs has us on track for more than 3.2°C of warming. The UNEP estimates that global emissions have to fall nearly 8 per cent each year between now and 2030. Large economies need to scale up their NDCs significantly in 2021, but the signals from the EU, the US, and China on verifiable quicker ambition increases are very tentative. If the developed countries fail to significantly upgrade their NDCs in 2021, it will further weaken the Paris Agreement.
Overall, the Paris Agreement continues to suffer due to the differences between the developed and developing countries, the US-centric nature of the Agreement, and the very weakness in its architecture.
The commitments under the Paris Agreement are voluntary. If countries want to upgrade their NDCs, they can. If they don't, no one can question them. The Agreement is, therefore, based on goodwill and moral persuasion. The assumption is that goodwill will prevail, countries will enhance their targets, and the collective action would meet the climate goals. But herein lies the mismatch. Since the beginning, countries have viewed climate negotiations as economic and not as environmental negotiations. So, instead of cooperation, competition is the foundation of these negotiations. Thus, every country considers its own narrow interest and is committing to do as little as possible. This is the Achilles heel of the Paris Agreement. Today, the UNFCCC is simply a platform to collect, synthesise, and disseminate information. It doesn't have the tools to drive global collective action to combat climate change. This is the reason why the Agreement will not be able to limit warming below 2.0°C. Therefore, the world needs a Paris Agreement plus strategy to stimulate actions from the government, private sector, and civil society to put the world on track to the 1.5°C goal. This would mean engagement at multiple multilateral, regional, and sectoral platforms to drive transformation and concrete actions from citizens (especially the wealthiest 1per cent who account for more than twice the emissions of the poorest 50 per cent) and the private sector to reduce emissions.
India's role and position
Historically, India is responsible for 3 per cent of cumulative emissions between 1750 and today, which is minuscule compared to its population and development needs. The US is responsible for 25 per cent, and the EU is responsible for 22 per cent (Europe is 33 per cent). China, on the back of rampant coal power plant building since 2000, now accounts for nearly 13 per cent of cumulative emissions. For this reason, in 2015, India was reluctant to agree to the Agreement's requirement that all countries set national targets. The US was a major backer of that Agreement, joined (surprisingly, to some extent) by China. Ironically, India is today the only major economy whose NDC has been rated as 2.0°C-compatible (possibly even 1.5°C-compatible, if the economic effects of COVID-19 persist). The NDCs of the US, Germany and China are all on track to take the globe toward 4.0°C of warming. It is in this background that one needs to assess India's role in the framing of the Paris Agreement and its rule book.
India's role in the Paris Rulebook has been constructive, with one critical exception. In GHG emissions reporting, it has been constructive enough to accept reporting requirements on par with developed countries. In finance, it has been consistent that certain kinds of finance cannot be counted within developed countries' reports and that the obligation to provide finance cannot be extended to large developing countries.
The exception is in the area of carbon markets, where there is continuing controversy regarding the 2.5 billion odd credits still pending from the Kyoto Protocol. The bulk of these credits is with India, China, and Brazil, who anticipated a stronger Kyoto carbon market, which never materialised, and are insisting on transitioning these credits to the new Paris market. This has drawn opposition from climate-vulnerable island states because transitioning that amount of credits en masse will wipe out tangible emissions reduction.
India's strongest suit is its NDC, which is the most ambitious for any large economy (barring maybe the UK). It is on track to achieve two of the three key targets, with performance on the forestry target lagging.
However, on updating NDCs in 2020/21, India has followed its traditional playbook – referencing developed countries' failure to meet their commitments. These are principled points, but India is using them to lay the ground for not updating its NDC in 2021. This could backfire.
As long as Trump was president, this was a somewhat viable stance. With the political change there, even modest action by the US will be used to ramp up the pressure on India. Unless negotiators and ministers anticipate this, they will be caught in the same public-relations trap that India fell into at Paris.
Therefore, India should use the principle strategically, not as an endpoint, but as a starting point to secure its national interests at climate summits. And it is in India's interest that every country is cutting its emissions ambitiously.
The fact is that India is already doing more than its NDC. The NDC requires 40 per cent of electricity to be from non-fossil sources by 2030. Prime Minister Narendra Modi has already announced a national renewable energy target – 450 GW by 2030 – far more ambitious than what India has committed internationally.
This is based on a Central Electricity Authority projection, which suggests that it is in India's interest to add such renewable energy capacity by 2030. Based on this shift, India is also on track to exceed the emissions-intensity-of-GDP target. There is, therefore, no doubt that an energy transition is already underway.
This has been made possible by the acceleration of certain trends that were still nascent five years ago. When the National Solar Mission was set up in 2010, solar PV cost was Rs.17 per unit ($0.23/unit). Bids are now regularly coming in at under Rs.2.5 per unit ($0.033/unit). By 2030, costs are projected to fall under Rs.2 per unit (0.025/unit). The price of lithium-ion batteries in India has fallen from $280 to $110 per kilowatt-hour between 2014 and today, making electric vehicles cost-competitive with internal combustion vehicles, and renewables-plus-storage competitive with coal power.
These trends are reflected in India's national targets. The National Mission on Transformative Mobility and Battery Storage (initiated in 2019) is estimated to commit $4.6 billion in incentives to domestic battery manufacturing by 2030, which will dovetail with an earlier target for EVs to constitute 30 per cent of Indian vehicles by the same year.
Why is India willing to set such national targets? For one, they have direct positive economic impacts. The renewable industry accounted for over 0.7 million jobs nationally in 2018, and the investment it attracts is critical to the government's intent to create a $5 trillion economy. A transition to EVs could save Rs.1.2 lakh crore ($16.5 billion) in fuel imports and generate up to 10 million jobs over the coming decade.
An equally important push is the national politics around air pollution. The pollution levels in the national capital are an annual embarrassment. According to a recent Lancet study, the nationwide air quality crisis claimed 1.24 million Indian lives in a year. This the reason why state governments want to replace solid fuel cookstoves, a major source of indoor air pollution, with electric or solar cookers.
This would suggest that upgrading India's national targets to international ones is in the national interest. That is true, but India should use it strategically. The key is to leverage leadership in climate ambition into leadership in the coming green economy. This will require action on two prongs – leadership at international fora and building an internationally competitive Indian green industry.
Leadership at Paris Agreement
At Paris, despite decades of championing the interests of the developing world, India allowed itself to be painted as a climate laggard. The Obama administration's overtures to China and smaller developing countries (especially island states) shifted the ground beneath India's feet, and it was slow to respond. Similarly, despite having the most ambitious NDC for any large economy by a margin, India will likely face similar pressure over the coming year.
India should, therefore, announce a net-zero target and also upgrade its NDCs. But it should use these targets to pressure developed countries, China, and other big polluters to deliver quicker and verifiable emissions cuts. This will not be achieved by only making the point at climate conferences and to western audiences. It will require a diplomatic effort aimed at vulnerable developing countries. These countries are inherently sympathetic to the idea that developed economies should cut emissions first, but they are uncertain whether India considers itself primarily a large economy or a developing country. This brings the second prong of the strategy.
An internationally competitive green industry
The competition to corner the low carbon economy is intense. China's state support for the export-led industry has drastically reduced the cost of solar power internationally but has also depressed the prospects for the indigenous solar manufacturing industry (in India and even economies like the EU and US). Indian manufacturing of batteries and electric vehicles face a similar challenge.
These large economies are currently also the largest markets for renewable products. However, this will change, given the enormous untapped renewable energy potential in Africa and Asia. In these regions, China's Belt and Road Initiative has poured finance into large infrastructure projects, which provide dubious benefits for target economies (high indebtedness and displacement of local labour) along with a high carbon impact.
India's economic involvement with Africa and Asia is much more modest in financial terms, focusing on joint capacity development. There is an ongoing national debate on whether this is the best possible model of engagement with these emerging economies. The tough choice is whether to scale up financial commitments without expecting immediate economic returns (as China does).
The closest India has come to such increased commitment is through the International Solar Alliance, which is deepening India-Africa energy cooperation. However, most finance for the ISA comes from France, and India's progress on leveraging this finance has been slow. Besides, the ISA is trying to stitch together economies as disparate as Guinea Bissau, Saudi Arabia, and Australia, which confuses the strategic purpose.
The need is for India-led, India-financed regional platforms targeted at developing countries of Asia and Africa. Beyond solar power, these should finance scientific and technological cooperation on areas such as low-carbon transport, sustainable building material, low-carbon cement and steel and low-emissions cooling – all technologies in which India is making advances and needs access to global markets.
Most critically, these should avoid the mistakes of neo-liberal as well as Chinese approaches by prioritising joint over one-sided development. They should also send a clear signal about the future of the green economy by excluding coal power, which China and developed economies continue to finance abroad. If backed with finance, this clarity will not only boost the Indian industry but also bolster India's position at climate negotiations. But this strategy should also be reflected at home.
India is currently pursuing an 'all-of-the-above' energy strategy, reflecting its need to scale up energy access. However, even within this strategy, India needs to set priorities. While coal power generation will continue to rise over the next 5-10 years, India cannot afford to keep paying for old, polluting coal plants. These must be shutdown.
The recent privatisation of coal mining is another confusing signal. This may improve the coal sector's efficiency and reduce coal imports, but it is not going to reverse the trend of renewables becoming cheaper than coal. In India's coal heartland Jharkhand, 50 per cent of mines are closed, and half of the operational mines are unprofitable.
It is not enough to support renewables as well as coal without making clear what the intended future direction is. This will result in politicised competition at taxpayers’expense, which will hurt the transition in the long term. The need is for a clear and just transition policy, which sets deadlines for coal phase-out or divestment while planning investment into communities and areas dependent on the coal economy.
Five years since the Paris Agreement, we are at an inflection point. Delay and prevarication is not an option; the world needs a bold vision and leadership to turn the tide. For India, ambitious global climate action is necessary considering the looming economic and social costs of the crisis. India is the fifth most vulnerable country to climate change impacts, as per the Global Climate Change Risk Index 2020. It is in India's interest that the global emissions are reduced significantly, and serious effort is made globally to meet the 1.5°C goal. For this, India will have to take a leadership role in climate negotiations. From being a reactive party, India should be a proactive party and use its NDCs and domestic targets to push ambition in other countries. Most importantly, it should align its interests with vulnerable countries of the global South. The good news is that the energy transition underway in the country provides scope and space for India to take leadership in Paris Agreement as well as in developing a globally-competitive green economy.
Disclaimer: This article was prepared with the support of the Heinrich Böll Stiftung India. The views and analysis contained in the publication are those of the author and do not necessarily represent the views of the Heinrich Böll Stiftung.