Navigating the ‘mid-transition’ period of the low-carbon shift: The critical role of finance ministries

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Navigating the ‘mid-transition’ period of the low-carbon shift: The critical role of finance ministries
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Reflections from Binsar

Content from the Brookings Institution India Center is now archived. After seven years of an impactful partnership, as of September 11, 2020, Brookings India is now the Centre for Social and Economic Progress, an independent public policy institution based in India.

Talent, money and policy must be harnessed to search for the optimal development-environment balance

The tragedy in Uttarakhand cannot be overstated. It is a tragedy of monumental proportions. For me, there is a personal dimension. I have a home in the forest sanctuary of Binsar which is 40 miles north of Almora. Binsar has been saved the physical and human ravages that have devastated the Kedarnath valley, but it has to have been severely scarred. For, after all, it could be said that there but for the protection of the forests would have gone its natural and unremitting beauty. The human fallout in even the most adverse of circumstances would have been limited because there are only five houses and and a few villages in the sanctuary. The resident population is not large.

The cause of the tragedy is nature. It has occurred for reasons beyond proximate human control. But who knows whether human intervention past or in the near present exacerbated its ferocity? Might it be that this is another graphic reminder of what lies in store if we continue to intervene in the natural state of being? To my mind, this tragedy brings into stark relief the now somewhat muted subject of global warming and its consequences. It also refocuses attention on two essential questions. What is the optimal balance between development and the environment? What must India do to mitigate the consequences of climate change ?

Three verities need to be re-emphasised.

One, the earth is warming. The concentration of greenhouse gases in the atmosphere has moved the temperature trajectory to dangerous levels. Scientists differ on the details, but there is now no doubt that if temperatures continue to rise, the consequential warming will do irremediable damage to the planet, and in particular to countries like India with its diverse topography.Two, the world does not have the leisure of time to reverse global warming. Five years ago the IPCC conveyed that message. Their fourth report reported that global temperatures were, on average, 0.7 per cent higher than the temperatures prevailing in the preindustrial period. It stated that the concentration level of greenhouse gases (GHG) was 375 parts per million (ppm). But the tipping point was 450 ppm, and if levels exceeded this point, the sea level would rise dangerously, severe drought conditions would alternate with flash floods, agricultural productivity would decline, and much of the planet would be caught in a spiral of economic, social, physical and ecological decline. The report warned that at prevailing rates of emissions, the world had between 10 and 20 years to arrest and stabilise concentration levels at or below the tipping point. It did not have, in other words, the luxury of waiting upon technological breakthroughs. It could not look to develop first and clean up later.

Third, all governments, whether of developed or developing countries, agree that there is but one pathway to follow. It is the one that will lead to the tightening of standards and codes for energy usage in power, industry, transport and buildings. These four sectors account for a disproportionate quantum of GHG emissions. It is the one that will look to market forces to stimulate efficiencies, demand conservation and water management. It will trigger a quantum jump in investment in renewables, “smart” infrastructure and clean technology. It will emphasise reforestation and the protection of natural habitats. There are, of course, major differences in the pace at which to proceed and the supportive means and mechanisms. For instance, there is no consensus on whether carbon should be taxed, traded or both. There is debate on whether the market should be the arbiter of resource allocation or whether governments and/ or multilateral organisations like the World Bank should manage the investments required. And, of course, there is a bitter divide on who should pick up the tab. The developed world is the reason we are in the current mess. The developing world and, in particular, China and India, are now the reasons the situation is getting worse.One should add a fourth point. Most would consider it a verity but it is not an immutable fact like the other three. “Politics as usual” will define the dialogue between nations. Global warming is a problem that does not recognise boundaries. It is a problem that cannot be durably addressed without collaboration and cooperation. And yet, the responses that emanate from governments are strongly “bordered”. They are defined by national imperatives. Multilateral agreements are consequently difficult to negotiate. Those that have been negotiated have not been comprehensive. They are narrow and all too often reflect the lowest common denominator of consensus.

What then of the two questions, the optimum balance between development and environment and the contours of the domestic policy required to weaken the link between economic growth and environmental degradation? What should be the answers?

I know that every time I go to Binsar I am compelled to reflect on the first question. This is because the villagers who live in the sanctuary are not happy. They do not appreciate the fact that development has passed them by because they live in a protected area. They see the benefits that tarred roads, electricity, mobile telephony has brought to their brethren, who have left the sanctuary to reside in Almora and the nearby villages outside the sanctuary connected to the market. They have better and more secure jobs. They do not have to trudge long distances on foot to get firewood for heating, lighting and cooking or simply to reach home. I hear, and sometimes see, but I cannot say I share their frustration. I visit my home once or twice a year. I am always saddened by the scars of development and the detritus of materialism that I see on the journey. And I am thrilled to enter the dense foliage of the sanctuary. I know this is a selfish response, but I cannot imagine a sadder outcome than if Binsar were denuded of its pristine natural splendour. So I do not know the answer to the above question. I do not know what might be the optimum balance. But what I do know is that an answer must be found. Else we will face the worst of all worlds.The second question is easier to answer. For there can only be one response. India must take immediate and vigorous steps to mitigate the consequences of global warming, deforestation and ecological distortion. It cannot and must not wait upon the rest of the world to decide whether to follow suit. It cannot be sidetracked by the noise of politics and the cut and thrust of multilateralism. It has to appreciate that whilst the tragedy of Uttarkhand may have been the result of the hand of nature, it could be repeated with greater ferocity if the hand of man does not heed the underlying lessons. India must, therefore, reduce its consumption of fossil fuels, invest in renewables and clean energy technology, reforest denuded plains and hillsides and in general embed the idea of sustainable development through talent, money and policy.

This post was originally found here on www.indianexpress.com