Equity after Durban

The Financial Express (New Delhi) , Friday, March 16, 2012
Correspondent : Uday Abhyankar
Anyone hoping for a planet-changing climate agreement at Durban was no doubt disappointed. But now that a couple of months have passed, we can take a cooler look at the outcome. First let’s see how we got there.

During much of 2011, we reiterated our ‘orthodox’ position—equity and historical responsibility—calling for legally binding obligations for developed countries, but only voluntary action for developing ones. We also added proposals on intellectual property rights and ‘green taxes’. The problems that this approach ran into at Durban were not unexpected. Among developed countries, only the EU was willing to consider making new commitments under Kyoto and only within an agreed roadmap for a comprehensive agreement to reduce emissions that covered all countries. Worse, developing countries were badly split with many Least Developed Countries and Small Island Developing States (SIDS) keen on a new agreement that they saw in their interests and so supported the EU position.

In the event at Durban, India showed flexibility and was widely recognised as a key and constructive player. The resulting Durban Package includes a mandate for a protocol, legal instrument or agreed outcome with 'legal force', imposing obligations on all countries, and an agreement on a second Kyoto commitment period. There was also progress on other issues, notably the launching of the Green Climate Fund to provide financing.

A key fear about India’s accepting emission reduction obligations has been that it will limit our economic growth and our ability to reduce poverty. Yet, India uses fossil fuels very inefficiently. Even the US, with its gas-guzzling cars, produces four times as much GDP per unit CO2 emissions as does India, while the EU produces over six times as much. If, over the next two decades, we can improve our fossil efficiency only to present American standards, we could quadruple India's GDP without increasing our CO2 emissions significantly.

Neo-Malthusian fears on limits to growth have always overlooked technological advances. Today’s fossil-fuelled power plants are far more efficient than those of 20 years ago, as are other manufacturing and industrial processes. In the coming years, these efficiencies will grow. India’s gross capital formation is now about 35 per cent of GDP, which will allow us to renew our capital stock every few years with more energy efficient plants and equipment. In fact, in our own interest, we must substantially improve our fossil fuel efficiency. Otherwise we will find it difficult to compete internationally or to finance our rapidly growing oil and coal imports. Energy inefficiency, rather than limited carbon space, is more likely to slow our development.

The key role India played in Durban places us in a good position to shape the outcome of the negotiations for the new agreement that is to start this year, finish in 2015 and will be implemented in 2020. What should our priorities be? Historical responsibility is a backward-looking concept and finds few takers among developed country negotiators. Equity, on the other hand, is a forward-looking concept that we should stress, not in terms of refusing obligations but in their time-profile. Today's developed countries have had a century or more of capital accumulation and thus have extensive infrastructure and technology. Developing countries generally have very patchy infrastructure and weak technology. For them, to reduce carbon emissions is far more difficult than for developed countries that already have high per capita emissions. Treating unequals equally is not equitable!

So, the peaking date, when absolute emissions reach their maximum, should vary among countries. For developed countries, it should be within the next few years, but we should not accept a date much before 2030 (China should have a much earlier date). Regarding carbon intensity, we have already pledged to reduce it by 20-25 per cent by 2020 compared to 2005 and according to CII estimates we are on track to achieve that. During the 2020s, we could have progressively more ambitious targets with a view to improving our fossil fuel efficiency towards current US standards by 2030. Thus, equity should mean early ambitious targets for developed countries and targets for emerging (and other developing) countries that build up dynamically over time.

On financing, while India is not likely to receive any official development assistance (ODA) funding for climate change, we should certainly support the efforts of the poorest countries to gain adequate financing for mitigation and adaptation. On the other hand, an enhanced CDM will generate significant finance for Indian entities and should be one of our priorities. Technology transfer is important, but the most advanced green technology is held by private corporations and is usually embedded in plants and equipment. So, the priority should be on the financing of technology transfers, especially to the poorest countries. We should also insist that the Durban process must bar the unilateral imposition of ‘green tariffs’.

Durban could be a turning point in the effort to reach a meaningful international regime to tackle climate change. Perhaps equally importantly, it should give a thrust to our own efforts to enhance fossil fuel efficiency to make our economy competitive and ecologically sustainable. And Durban has enhanced India’s credibility as a serious player on global issues. For all this, our negotiators there deserve at least two cheers, if not three! Now we should build on the pivotal position India gained at Durban to work realistically to shape a climate regime that responds to our needs and capabilities as a major economy.

 
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