Open Forum

New Delhi, 21 April 2021

Environmental Outlook

RECOVERY PACKAGE CRITICAL

By Dhurjati Mukherjee

Last year was meant to be a landmark year in climate ambition with around nine years left for Agenda 2030, Instead it turned out to be the year of Covid-19. International climate governance was stalled as several governments started announcing emergency stimulus packages to rescue their economies. Besides, the United Nations Climate Change Conference, which was supposed to give a practical shape to the Paris agreement, got deferred.

Last month, American President Joe Biden announced the hosting of 40 world leaders, including Narendra Modi at a virtual summit on April 22 (World Earth Day). The changed approach of the US, to return to the Paris Agreement, is no doubt a welcome change, as it is the world’s biggest emitter. The Summit will underscore the urgency – and the economic benefits – of stronger climate action, says the US. Moreso, as in recent years, scientists have underscored the need to limit planetary warming to 1.5 degrees Celsius in order to stave off the worst impacts of climate change.

The Summit, is expected to highlight examples of how enhanced climate ambition will create good paying jobs, advance innovative technologies, and help vulnerable countries adapt to climate impacts. By the time of the Summit,the US will announce an ambitious 2030 emissions target as its new Nationally Determined Contribution under the Paris Agreement and Biden has urged leaders to use the Summit as an opportunity to outline how their countries also will contribute to stronger climate ambition.

Perhaps, the pandemic offered an opportunity to plan sustainable pathways in the run-up to Agenda 2030. Obviously, sustainability needs adequate attention at this juncture. An ecological transition is necessary and the process has already started by a shift from fossils to renewables for faster economic recovery. However, recovery packages calls for mobilising funds for achieving sustainable pathways. In this context, the COP26, now scheduled to take place in November in Glasgow, is crucial.

Though the US has taken interest on environmental issues, after Biden came to power, environmental groups and scientistsare calling on him to set a target that would cut US greenhouse gas emissions by at least 50 per cent below 2005 levels by 2030.While there is a big question mark on whether Biden will oblige, the Summit has on its agenda to highlight examples of how enhanced climate ambition will create good paying jobs, advance innovative technologies, and help vulnerable countries adapt to climate impacts in the backdrop that the global outlook doesn’t look quite encouraging. The US and China are top two emitters. while India is placed in the fourth position and this is unlikely to change in the coming two-three years.

However, it is encouraging to note a framework adopted by the UN Statistical Commission would ensure that ‘natural capital’ – forests, wetlands and other ecosystems – are counted in reporting wealth of countries. A school of economists has for sometime argued that environmental capital be considered a factor of production just like labour and capital. They said if environmental degradation is measured, the ‘real growth’ of a country would be apparent.

Though India, China, UK, France, Germany and many other European countries have already made some progress in implementing the System of Environmental Economic Accounting (SEEA), the adoption of new framework will push the others, including the US, towards figuring out worth of their natural ecosystem and including it in accounting process.

The new framework goes beyond the commonly used statistics of GDP in economic reporting. It means the countries’ wealth will reflect dependence of the economy on nature or its impact on it, such as the deterioration of water quality or the loss of a forest. Similarly, restoration or conservation may be a ‘credit’ that lessens the loss of GDP.

India has already taken a step towards measuring values of nature when it figured out economic valuation of 16 tiger reserves as part of a conservation plan in two phases in 2013-19. The study indicated that the monetary value of flow benefits from the selected 10 tiger reserves range from Rs 5094 to Rs 16,202 crore annually.

As regards carbon footprint, India has been consistently increasing in sync with its development needs but the country will eventually exceed what it had voluntarily pledged to the UN climate body with respect to its pre-2020 commitments. In its third biennial update report (BUR-III), submitted to the UN Framework Convention on Climate Change (UNFCC) recently, India declared that its emission intensity (per unit of GDP) had reduced by 24 per cent between 2005 and 2016. Therefore, it was on track to meet its voluntary declaration to reduce the emission intensity of GDP by 20-25 per cent from 2005 levels by 2020. But experts are of the opinion that this may not be enough to tackle global warming.

Though there has been some decline in the agriculture sector, it remains the main source of methane (CH4) and nitrous oxide (N2O) emissions. Methane emissions occur from this sector mainly due to livestock rearing (enteric fermentation and manure management) and paddy cultivation while N2O is principally emitted due to the application of fertilizers to agricultural soils. In the energy sector, electricity production was the single largest source, accounting for about 40 per cent of national GHG emissions in 2016 while manufacturing industries and construction together emitted over 18% of total emissions.

Seven family conglomerates – Reliance, Adani, Tate, Aditya Birla, Mahindra, Jindal and Vedanta – are responsible for emitting at least 539 million tonnes of CO2 annually. This is equivalent to 22 per cent of India’s total CO2 emissions. In 2019-20, these seven groups operated 25 per cent of India’s coal based power plants (50,000 MW), produced 39 per cent of India’s steel (43 million tonnes), 27% of India’s cement (91 million tonnes) and 22 per cent of India’s passenger and commercial vehicles (0.92 million).

To avert a crisis like climate change, forward thinking and long term planning is required, for which the value of committed visionary leadership cannot be underestimated. As family conglomerates are organised around visionaries, if they sincerely act on the climate crisis, which appears quite doubtful. the climate situation may not improve to the desired extent. 

Meanwhile, the global picture is somewhat confusing with rich people the worldover still enjoying 79 per cent of their energy from fossil fuels. However, it needs to be pointed out that climate policies harm the developing world. As recently pointed out by President of the Copenhagen Consensus Center: “The Paris Agreement will force more people into poverty by 2030 than otherwise would’ve happened”. If we aim for 20 C or 1.50 C, a recent peer reviewed study showed it will mean 80 million more poor and 180 million more starving by mid-century. But warming may be more and thus more poor people are expected to be affected in various ways, specially through cyclones, floods, heat waves etc.

While experts have rightly suggested targets must be enforced, India need not panic and yield to world pressure as it has already met its pre-2020 voluntary targets. Moreover, with a per capita income of just Rs 2000, the country should follow a conservative approach in any climate negotiations as it would be risky to place big bets on clean tech. As recently pointed out by the country’s environment minister, the rich nations should first fulfill the targets which they had promised and also help demerging economies with financial and technological support to meet their mitigation and adaptation goals. Indeed, set an example they should.---INFA

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