Context
Earlier this week the Intergovernmental Panel on Climate Change (IPCC) reported on climate science, warning against the folly of a business-as-usual development model.
Past assessments have been disregarded as sensationalist. For attention to shift from a day of front-page news to a more strategic conversation, we must understand what the science says, what the politics delivers, and what the economy demands.
IPCC Reports
- Globally, average surface temperatures have already risen by 1.09°C between 1850-1900 and 2010-2019 thanks to anthropogenic emissions of greenhouse gases. What happens next depends on our development and technological choices.
- The IPCC document explores several scenarios based on shared socioeconomic pathways and different levels of radiative forcing (or the change in the energy balance in the atmosphere due to natural or human causes).
- If we followed high fossil fuel development (doubling emissions by 2050), temperatures would rise by 4.4°C (range of 3.3-5.7°C) by 2100.
- If a more sustainable pathway were pursued (with net-zero emissions by 2060 and negative emissions thereafter), average global temperature rise would be 1.4°C (range of 1.0-1.8°C).
Regardless, it is likely that average rise in temperatures will breach the 1.5°C barrier within the next two decades. If emissions are not mitigated rapidly, we are staring at rising climate risks and catastrophic impacts.
Science has become better at attributing warming to human influence and extreme events to a changing climate. Less than 0.1°C of the warming observed since the pre-industrial era is thanks to natural reasons. Human influence is very likely the main reason behind glacial retreat since the 1990s. Since observations began, glaciers have lost the maximum mass during 2010-19.
India is particularly vulnerable
- If warming exceeds 4°C, India could see about 40% increase in precipitation annually, leading to extreme rainfall events.
- Three-quarters of India’s districtsare now hotspots of extreme weather events.
- Since 1990, more than 300 such events have resulted in damages exceeding INR 5.6 lakh crore.
- Average rate of sea-level rise was 1.3 mm per year during 1901-71. This rate increased to 3.7 mm annually during 2006-18.
- Even with warming restricted to 1.5°C, we are still on course for more than 2 metres of sea-level rise beyond this century. We are bequeathing a very different world to future generations.
The world needs transformational change but countries have more myopic outlooks. The IPCC says that in order to stabilise rise in temperatures, two things have to happen: Anthropogenic emissions must become net-zero and in the interim cumulative emissions cannot exceed a global carbon budget.
To stay within the 1.5°C limit, starting in 2020 the remaining global carbon budget is 300-500 gigatonnes of carbon dioxide (GtCO2) (with a likelihood of 50%-83%).
But who will cut their emissions?
Of late, several large emitters have promised net-zero emission targets. But China and the United States have already emitted 129 GtCO2 and 344 GtCO2, respectively, between 1990 and 2010.
Despite their self-laudatory targets, China would consume 87% of the global carbon space (if it reached net-zero in 2060) and the US would eat up 26% (if it reached net-zero in 2050).
Clearly, mere announcements of net-zero targets do little to retard the “carbon grab” of the largest emitters.
In a pathbreaking study, CEEW researchers find that rich countries, as a whole, emitted ~25 gigatonnes of carbon dioxide equivalent (GtCO2eq)more than their estimated emission allowance during 2008-20, thanks to non-participation in pre-2020 climate agreements and misuse of accounting loopholes.
To put it in context, this is more than half the world’s greenhouse gas emissions in 2019, or nine years’ worth of India’s 2016 emissions. Climate justice demands that developed countries now take steps to free up carbon space for others.
If climate science is stark and climate politics has been unjust, how do we meet our development aspirations?
The claim on a fair share of the carbon budget is not a licence to pollute. India must adopt a more climate-friendly development pathway for its own sake. Its per capita incomes, energy consumption and carbon footprint are well below the global average but it must deliver high rates of economic growth within a shrinking carbon budget.
India has an energy revolution underway. This ranges from household electrification to smart meters, scaling up solar and wind to new ambitions in biofuels and hydrogen, energy efficiency to clean cooking for millions, electrification of railways to electric vehicles, first country with a cooling action plan to skilling thousands in green jobs.
Next, the discourse must shift from energy to the economy.
There are very few sunrise sectors that are not low-carbon. India must tap new technology frontiers (green hydrogen), new business models (distributed and digitalised services, for distributed energy, EV charging, cold chains), new construction materials (low-carbon cement, recycled plastic), new opportunities in the circular economy of minerals, municipal waste and agricultural residue, and new practices for sustainable agriculture and food systems. Many of these technologies and business models are proven but need policy and regulatory support.
Finally, it will become imperative to remove greenhouse gases from the atmosphere and repair the climate in critical regions, such as the poles. If those tipping points are breached, there will be disastrous consequences. This will require new levels of international cooperation.
Climate science is not sensationalism but gets plugged that way because of our short attention spans. The climate crisis is a strategic threat to our development prospects. It deserves sober, continuing analysis, deliberation and action. The headlines look bad; reality will get worse.
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Steve Ovett, the famous British middle-distance athlete, won the 800-metres gold medal at the Moscow Olympics of 1980. Just a few days later, he was about to win a 5,000-metres race at London’s Crystal Palace. Known for his burst of acceleration on the home stretch, he had supreme confidence in his ability to out-sprint rivals. With the final 100 metres remaining,
[wptelegram-join-channel link=”https://t.me/s/upsctree” text=”Join @upsctree on Telegram”]Ovett waved to the crowd and raised a hand in triumph. But he had celebrated a bit too early. At the finishing line, Ireland’s John Treacy edged past Ovett. For those few moments, Ovett had lost his sense of reality and ignored the possibility of a negative event.
This analogy works well for the India story and our policy failures , including during the ongoing covid pandemic. While we have never been as well prepared or had significant successes in terms of growth stability as Ovett did in his illustrious running career, we tend to celebrate too early. Indeed, we have done so many times before.
It is as if we’re convinced that India is destined for greater heights, come what may, and so we never run through the finish line. Do we and our policymakers suffer from a collective optimism bias, which, as the Nobel Prize winner Daniel Kahneman once wrote, “may well be the most significant of the cognitive biases”? The optimism bias arises from mistaken beliefs which form expectations that are better than the reality. It makes us underestimate chances of a negative outcome and ignore warnings repeatedly.
The Indian economy had a dream run for five years from 2003-04 to 2007-08, with an average annual growth rate of around 9%. Many believed that India was on its way to clocking consistent double-digit growth and comparisons with China were rife. It was conveniently overlooked that this output expansion had come mainly came from a few sectors: automobiles, telecom and business services.
Indians were made to believe that we could sprint without high-quality education, healthcare, infrastructure or banking sectors, which form the backbone of any stable economy. The plan was to build them as we went along, but then in the euphoria of short-term success, it got lost.
India’s exports of goods grew from $20 billion in 1990-91 to over $310 billion in 2019-20. Looking at these absolute figures it would seem as if India has arrived on the world stage. However, India’s share of global trade has moved up only marginally. Even now, the country accounts for less than 2% of the world’s goods exports.
More importantly, hidden behind this performance was the role played by one sector that should have never made it to India’s list of exports—refined petroleum. The share of refined petroleum exports in India’s goods exports increased from 1.4% in 1996-97 to over 18% in 2011-12.
An import-intensive sector with low labour intensity, exports of refined petroleum zoomed because of the then policy regime of a retail price ceiling on petroleum products in the domestic market. While we have done well in the export of services, our share is still less than 4% of world exports.
India seemed to emerge from the 2008 global financial crisis relatively unscathed. But, a temporary demand push had played a role in the revival—the incomes of many households, both rural and urban, had shot up. Fiscal stimulus to the rural economy and implementation of the Sixth Pay Commission scales had led to the salaries of around 20% of organized-sector employees jumping up. We celebrated, but once again, neither did we resolve the crisis brewing elsewhere in India’s banking sector, nor did we improve our capacity for healthcare or quality education.
Employment saw little economy-wide growth in our boom years. Manufacturing jobs, if anything, shrank. But we continued to celebrate. Youth flocked to low-productivity service-sector jobs, such as those in hotels and restaurants, security and other services. The dependence on such jobs on one hand and high-skilled services on the other was bound to make Indian society more unequal.
And then, there is agriculture, an elephant in the room. If and when farm-sector reforms get implemented, celebrations would once again be premature. The vast majority of India’s farmers have small plots of land, and though these farms are at least as productive as larger ones, net absolute incomes from small plots can only be meagre.
A further rise in farm productivity and consequent increase in supply, if not matched by a demand rise, especially with access to export markets, would result in downward pressure on market prices for farm produce and a further decline in the net incomes of small farmers.
We should learn from what John Treacy did right. He didn’t give up, and pushed for the finish line like it was his only chance at winning. Treacy had years of long-distance practice. The same goes for our economy. A long grind is required to build up its base before we can win and celebrate. And Ovett did not blame anyone for his loss. We play the blame game. Everyone else, right from China and the US to ‘greedy corporates’, seems to be responsible for our failures.
We have lowered absolute poverty levels and had technology-based successes like Aadhaar and digital access to public services. But there are no short cuts to good quality and adequate healthcare and education services. We must remain optimistic but stay firmly away from the optimism bias.
In the end, it is not about how we start, but how we finish. The disastrous second wave of covid and our inability to manage it is a ghastly reminder of this fact.