Global transformation is affecting the planet. But there is no uniform transformation across the world. Global temperature increased sharply only after 1981 with little contribution from the developing countries as their industrialisation and urbanisation had yet to begin.
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In 2015, at the UN General Assembly when the Sustainable Development Agenda 2030 was adopted and at the Paris Conference, Prime Minister stressed a reframing of climate change to climate justice, arguing that just when countries such as India were becoming major industrial and middle class nations, they should not pay the price for the pollution caused by the West. The Paris Agreement, explicitly recognises that peaking will take longer for such countries and is to be achieved in the context of “sustainable development and efforts to eradicate poverty”.
This balance is now being upset for a common target and timetable, with non-governmental organisations (mostly foreign funded) in support and negotiators (mostly public servants) opposing the pressure. India will meet its Paris Agreement target for 2030, its per-capita emissions are a third of the global average, and it will in future remain within its share of ecological space. The pressure arises from the way the agenda has been set.
Treaty’s inequity
First, inequity is built into the Climate Treaty. Annual emissions make India the fourth largest emitter, even though climate is impacted by cumulative emissions, with India contributing a mere 3% compared with 26% for the United States and 13% for China.
According to the United Nations, while the richest 1% of the global population emits more than two times the emissions of the bottom 50%, India has just half its population in the middle class and per capita emissions are an eighth of those in the U.S. and less than a third of those of China.
Second, the diplomatic history of climate negotiations shows that longer term goals without the strategy to achieve them, as in the case of finance and technology transfer, solve a political problem and not the problem itself. The focus on physical quantities, emissions of carbon dioxide and increase in global temperature, measures impacts on nature whereas solutions require an analysis of drivers, trends and patterns of resource use. The current framework considers symptoms, emissions of carbon dioxide, and was forced onto developing countries to keep the discussion away from the causes of the problem , the earlier excessive use of energy for high levels of well-being.
Third, models on which global policy recommendations for developing countries are based consider achieving ‘reasonable’ not ‘comparable’ levels of well-being to show that early capping of energy use will not affect their growth ignoring costs on the poor. The different means to achieve the goals are not on the agenda because the rising prosperity of the world’s poor does not endanger the planet and the challenge is to change wasteful behaviour in the West.
Role of infrastructure
The vaguely worded ‘net zero’ emissions, balancing emissions and removals, could be disastrous for development latecomers like India because the current frame fails to recognise that more than half the global cumulative emissions arose from infrastructure, essential for urban well-being.
First, infrastructure has a defining role in human well-being both because of the services it provides outside the market and the way it shapes demand distinct from manufacturing (production) and lifestyles (consumption), which alone are captured in model projections.
Second, the global trend is that in an urbanised world, two thirds of emissions arise from the demand of the middle class for infrastructure, mobility, buildings and diet. There is no substitute to cement, steel and construction material, and worldwide they will need half the available carbon space before comparable levels are reached around 2050, while developed countries use most of the rest. For developed countries, peaking of emissions came some 20 years after infrastructure saturation levels were reached and net-zero emissions are being considered some two decades even later to take advantage of aging populations and technology.
Third, because of its young population and late development, much of the future emissions in India will come from infrastructure, buildings and industry, and we cannot shift the trajectory much to reach comparable levels of well-being with major economies. For example, China’s emissions increased three times in the period 2000-2015, driven largely by infrastructure.
New framework
A global goal-shaping national strategy requires a new understanding. India must highlight unique national circumstances with respect to the food, energy and transportation systems that have to change. For example, consumption of meat contributes to a third of global emissions. Indians eat just 4 kg a year compared with around 68 kg per person for the European Union and twice that in the U.S. where a third of the food is wasted by households. Transport emissions account for a quarter of global emissions, are the fastest growing emissions worldwide and have surpassed emissions from generation of electricity in the U.S., but are not on the global agenda.
Coal use
Coal accounts for a quarter of global energy use, powered colonialism, and rising Asia uses three-quarters of it as coal drives industry and supports the renewable energy push into cities. India with abundant reserves and per-capita electricity use that is a tenth that of the U.S. is under pressure to stop using coal, even though the U.S. currently uses more coal. India wants to eliminate the use of oil instead with renewable energy and hydrogen as a fuel for electrification, whose acceleration requires international cooperation around technology development and transfer.
In the Paris Agreement, ‘climate justice’ was relegated to the preamble as a political, not policy, statement. It needs to be fleshed out with a set of ‘big ideas’. The first is a reframing of the global concern in terms of sustainable development for countries with per capita emissions below the global average, in line with the Paris Agreement. Second, the verifiable measure should be well-being within ecological limits. Third, international cooperation should centre on sharing technology of electric vehicles and hydrogen as a fuel, as they are the most effective response to climate change.
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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.