With Narendra Modi leading in the polls in India, fueled by the economic success of his home state of Gujarat, many wonder how he would govern if elected. His economic successes occurred, in part, from delivering high quality reliable energy in Gujarat at a fair price, including virtually 100% household-level supply of electricity in rural areas. With national rural electrification rates approaching 70%, this is no mean feat. He also has billed himself as a climate change activist. He created a state-level ministry for climate, and published a book in 2010 called ‘Convenient Action: Gujarat’s Response to Challenges of Climate Change,’ touting low-carbon investments. He also touted his achievements on climate change when I interviewed him for my book in 2012.
If polls are right, and he is in fact elected prime minister, would he deliver for India on both goals? Given India’s huge energy demands and the domestic availability and low cost of coal, are the two goals compatible?
|Energy Reform||• Streamline government agencies
||• Build state capacity for price reform and fee collection
|Climate Action||• Promote renewables, natural gas, nuclear
||• Create state-level action officers (either high in energy ministries or as free standing)
Energy and Federalism
Modi must decide if he is going to fix Delhi’s Central government while also empowering states to mimic his Gujarat successes. In theory, he can do both. Either alone would be a Herculean task, consuming huge political capital. Both will require enormous effort.
To provide abundant and affordable power, Modi could wrestle with the half dozen different central ministries that manage energy – from coal, to oil and gas, to power (generation and distribution), to nuclear, to renewables. They need desperately to be streamlined and coordinated. But that means fighting corporate and vested interests invested in each organization, and the more vested lack of interest among the bureaucracy. As prime minister, he would personally have to convince bureaucrats to get to Yes, as opposed to holding back reform.
Alternatively or in concert, he could empower states to supplant central plans and regulations, as he did in Gujarat on solar installations, oil and gas pricing, and coal allocation. But that means investing significantly in state capacity. In Gujarat, he personally oversaw the staffing, rule-making, and implementation of reform. Otherwise, decentralization leads to inefficiencies, corruption and power-grabs. India’s thirty-odd states range widely in their administrative capacities. Reforming states is the right thing to do in the long-term, but will not provide immediate economic results.
And then there’s climate change. Modi’s professed interest and commitment were high on rhetoric, which is always more convenient than actual actions. According to Indian press reports, his much publicized climate ministry is now defunct, and its long-overdue Climate Change Action Plan was “junked.”
Again, he faces a choice. An overhaul of central government ministries, with an emphasis on climate, would favor nuclear, renewables, natural gas, and a major investment in smart grid technologies. That may not provide the cheap and easy reliance on coal and petroleum that fueled Gujarat’s growth.
Or, he could demand that the states take on this challenge. In exchange for central resources, they would have to complete their state action plans for climate change – few of which have been completed. That would mean demanding the climate action that may have proven to be less-than-convenient in Gujarat.
On energy and climate change, if Modi is in fact elected, he will face hard choices. It will not only be interesting to see which he chooses – it will be vital. India’s growth and the world’s climate hang in the balance.
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