Get Rich Before Going Woke: Why Modi Government Needs To Go Slow On Climate Activism

Prime Minister Narendra Modi got the United Nations Environment Program (UNEP) Champions of Earth award for Policy Leadership in 2018.

Presenting the award, the UN Secretary General António Guterres heaped unqualified praise on Modi stating that while many other world leaders also recognise, know and understand the enormous benefits of climate action, Modi ‘acts with enormous energy to make this change.’

Guterres commended Modi for his various initiatives - installing 300 million LED light bulbs, providing 40 million clean-burning cookstoves to poor Indian households, envisioning and executing the International Solar Alliance and vowing to eliminate single-use plastic in India by 2022.

Earlier this month, Modi received another award, this time from a US-based consulting firm the Cambridge Energy Research Associates, for ‘his commitment to sustainability in energy and the environment’.

Modi, his government and his policies are constantly under fire from majority of the global commentariat. But at least on the environment front, he gets plaudits from serious activists and even awards from international institutions like the UN.

Modi’s pro-environment credentials are perhaps the only political currency he has on the global stage. On everything else, he gets vilified and panned by the chattering classes.

Cleverly, Modi has projected the fight against climate change as something that’s driven by India’s own civilisational ethos rather than the compulsion of toeing the Western narrative. Strong commitment to climate action is rooted in the Vedas, Modi had told UN Secretary General Antonio Guterres.

It seems that Modi takes his image as a champion of the environment seriously and is intent on burnishing it further with concrete action and tangible deliverables. That is not necessarily a good news for the country despite the optics.

The Paris Climate Agreement (ratified by over 190 countries including India) came into force in November 2016. In less than five years, India is already on the cusp of meeting its Nationally Determined Commitments (NDCs - which were set differently for all nations as per their own comfort).

In a biennial update report (BUR-III), India has informed the United Nations Framework Convention on Climate Change (UNFCCC) that its emission intensity (per unit of GDP) reduced by 24 per cent between 2005 and 2016 thereby meeting ’its voluntary declaration to reduce the emission intensity of GDP by 20-25 per cent from 2005 levels by 2020.’

India has committed to reduce the emissions intensity of its GDP By 33-35 per cent by 2030 from 2005 level. This is now going to be met well ahead of the schedule. (Note: Share of non-fossils in India’s installed capacity for electricity has already reached 38 per cent - just shy of 40 per cent target it was supposed to achieve by 2030)

This could mean a number of things. India committed to emission cuts which it would’ve achieved anyway without taking concrete steps. Or India is punishing itself to achieve these targets.

It’s the second possibility that we need to be concerned about because a 30-35 per cent reduction in emission intensity per GDP is not a mean achievement in just 20 years. Moreover, there are various government actions before us to point fingers at which may have contributed significantly towards meeting these targets.

Auto industry has been at the receiving end of the government’s climate activism. The industry which contributes over seven per cent to India’s GDP (and half of its manufacturing sector GDP) and employs 40 million people (directly and indirectly) was forced to transition to BSVI emission norms in three years (to put this in perspective, even much advanced Europe took 10 years).

This transition came at a great pain and cost the industry thousands of crores. The prices of same vehicles (most of which are of sub standard quality) were jacked up which further impacted the already weak demand.

Of course, all this negatively impacts the growth of both the manufacturing sector and that of the country as a whole.

Apart from the usual shocks that have jolted all sectors - GST transition, demonetisation and Covid-19 pandemic - auto industry has been hammered by other policy decisions like being asked to move to BSVI norms.

The latest diktat to the sector is to comply with Corporate Average Fuel Efficiency (CAFE) standards by 2022. These norms aimed at improving fuel efficiency (hence lowering fuel consumption and emissions) are set to come in force from April next year and the government has made it clear that it is in no mood to relax the deadline despite pleas from the industry.

The automakers had barely finished complying with BSVI fuel efficiency norms that they now have to go further and magically become 30 per cent more fuel efficient from next year. Perhaps the easiest way would be for every player in the market to emulate leading car manufacturers using cheap materials to make light weight cars compromising safety.

At a time when Tata Motors is gaining ground due to its safety USP (its cars are heavier in comparison) as consumers move away from unsafe light cars (notoriously called tin ka dibbas), the incentives are tweaked to promote bad practices.

Surprisingly, the transport sector‘s contribution to greenhouse gas emissions and the government’s ire against it are totally unrelated.

Energy sector contributes more than 70 per cent of India’s total GHG emissions (in 2016, the share reached 75 per cent, up from 71 in 2010). In energy sector, half of the share is due to electricity and barely one-eighth due to transport.

Essentially, transport’s share is less than 10 per cent overall and it’s growing at much smaller pace than the growth in electricity or even manufacturing.

It would make sense for the government to direct energies in reducing carbon footprint of more emission intense sectors. The biggest bang for buck can be achieved by focusing on the electricity and manufacturing sectors.

While Modi government has focused on adding a lot of renewable energy (mostly solar and wind - 175 GW by 2022) to its overall share of electricity, it hasn’t paid much attention to nuclear power. India will need to invest in adding scores of nuclear reactors to its energy mix if it’s serious about eliminating Greenhouse Gas emissions at the source itself.

By punishing auto sector severely with strict regulations while achieving little in return, the government is being penny wise, pound foolish. Even if the auto sector transitions 100 per cent to Electric Vehicles in next 10-15 years, it won’t help if the batteries get electricity from same coal fired plants. The source - power sector - needs to be fixed first and foremost.

Modi government‘s policies such as LED light distribution, LPG connection to poor households, focus on solar energy are commendable and need to be appreciated. But the other part of the strategy which involves railroading sectors such as transportation and energy to toe regulations that hurt the economy aren’t wise. India needs to become rich before becoming woke.

Take a look at how the other countries who are part of Paris Agreement are putting their national economic interest first and not interested in meeting the targets they themselves agreed to. T

The United States, the biggest polluter in terms of per capita hardly did anything to move the needle during four years of Trump administration which ultimately pulled out of the agreement (one reason cited by pro-Trump analysts was that the regulations needed to achieve its NDC target would cost America $2.5 trillion in GDP by 2035).

Joe Biden made the country join again but who is to say it won’t back off again after four years.

Climate Action Tracker rates India as 2°C COMPATIBLE, the best performer among large countries. USA is rated Critically Insufficient. China, by far the world’s biggest polluter, is rated Highly Insufficient. European Union is rated Insufficient.

This begs the question: can India, which is not part of the problem become a part of the solution while those who are part of the problem don’t want to be a part of the solution themselves?

Should we end up as the sole suckers of the world? That’s not acceptable. Hopefully, PM Modi will pay attention to all this and direct his government to go slow on forcing whole sectors in the third world country to comply with first-world regulations.