Climate Change and India's Booming Economy

N Munal Meitei *

The whole world is looking towards the consequences of climate change and India's economic growth. We feel that there is no positive impact of climate change on economies (environmental, equity or ecology) anywhere in the world. Climate is dynamic. Natural climate changes took for millions of years. But we do not think that the climate change that is taking place today may bring 2°C global temperature by 2050 and if our system goes on, then we may face for another increase of 5.8°C by 2100.

It is a change not only in precipitation but complete season, not in temperature variation but complete energy cycle, not in air flow but complete biodiversity pattern, and not only water bodies but new political maps. The National Security advisor, Mr. Sivasanker Menon on the eve of the 14th Asian Security Conference held on the 13th February 2012 said, the biggest challenges of the day are the energy, water and the natural disaster.

Indian companies focus when there are profits to be made, and are only slowly tuning in to the emissions debate. So a stronger regulatory environment is required for real progress to be made, says Damandeep Singh. Industry in India tends to act fast where it sees opportunities to gain revenue and drag its feet where there is no money to be made. At present, there are no regulations on greenhouse gas emissions in the country, although financial incentives to invest in emissions reduction do exist.

According to Dr Albrecht Kaupp of the Indo-German Energy Programme, who advises the Indian government's Bureau of Energy Efficiency, the market potential in energy efficiency, energy conservation and management is over $2 billion a year. Barely a fifth of this potential is currently exploited. Several reports, including the latest one by the Intergovernmental Panel on Climate Change, note that India will be among the countries worst affected by rising temperatures. Lehman Brothers have estimated India will suffer an estimated 5% loss of GDP due to climate change. This is twice the cost to the European Union, the biggest OECD loser, and more than one percentage point higher than the cost to Africa.

India has around 700 million rural populations depending on climate sensitive economic sectors like agriculture, forests and fisheries for food and livelihoods. Agriculture is nature based economic activity. It will incur loss in the presence of changing rainfall and season pattern. According to Rosenzweig & party (1994) production in the developed world benefited from climate change, where as production in developing nations like India declined. India will incur maximum negative impact on yield (Nelson et al, 2009).

Crops would be able to sustain such huge change. It will lead to acute food shortages and higher prices. That may result in further change in land use pattern which may lead to replacement of agriculture with some other industry. Hence, they have to mitigate to the urban places to work as labourers on their own land. It would be economic cum social-status loss for farm owners.

Climate change will have most visible impact on sea level rise and change in our under water resources. Under- resourced and developing countries have the lowest capacity to respond to climate change (Hough-Guldberg, 2007). They found that climate change will exert danger on people, infrastructure and mangroves due to growing wave and storm impacts.

There be lost of Asian coral reefs which are home of around one-fourth of the annual fish catch and food to about 1 billion people. India has more than seven thousand kilometers coastline which supports millions' food and business requirements. Climate change can have drastic impact on the population and species survival. It can take livings of the thousand innocents just to compensate the development taking place somewhere else.

Climate impact assessment using BIOME-3 model and climate projection for the year 2085 shows a shift towards wetter forests in the north-eastern region including Manipur and drier forest types in the north-western region in the absence of human influence. Any change in the pattern of Indian forests is an alarm for both government and people because it cost money in relocation or rehabilitation of people and lead to loss of traditional knowledge and culture. Even, Indian economist plan for forestation to reduce the carbon emission.

Investment for Healthy Economy: Education, Energy and Ecology

Healthy economy can be understood as cycle use of limited resource like blood circulation in our body through heart. As Jannie M. Benyus discussed that we have long list of industries working as arteries but there are huge gap for veins to complete the circulation. The knowledge and adoption of circulation of used products and services only can reduce the problems of scarcity resources and their efficient use.

Healthy economy requires investment in education, energy and ecology. According to David Orr, education can make people sensitive and caring towards their environment. Indian educational institutions require investment to develop new discipline and to take sustainability education at ground level especially in urban areas. Even if we adopt renewable resources to refine and develop the technology we have to re-examine our curriculum and research agendas.

Rapid growth

Energy is the soul of economies. It helps them to grow, produce and continue the cycle. Largely Indian economy runs on electricity or other non-renewable sources of energy. Meanwhile, from the early 1990s, India has experienced one of the fastest economic growth rates in the world, reaching over 9% last year. The contribution of India to global carbon dioxide emissions is around 4%, but it is growing fast as the country develops new power plants. —to be contd

According to the 17th Electricity Power Survey of the Indian Government, India's peak electricity demand was 75,756 MW in 2003, and will more than double to 152,746 MW by this financial year. And managing the environmental impact of growth is increasingly under the spotlight in India. A recent World Bank report, "Strengthening Institutions for Sustainable Growth: Country Environmental Analysis for India", has identified environmental sustainability as the next great challenge that India faces along in its path to development. To mitigate the impact of climate change, we need to switch to renewable sources of energy like solar, hydro, wind or thermal. Being developing economy, we lack green technologies.

And, every time we have to look towards the western nations on high consultation costs. Again role of education and research is being emphasized to develop green technologies according to local Indian conditions. We need take some bold decision like Germany to shift energy demand towards green and clean energy alternatives. To mitigate climate impact we need to invest in ecology. It will help to monitor the amount of resources consumed or degraded to fuel the economy as well as to understand the complexities of climate change or agriculture, fisheries and forest ecology for developing economies. And India is going to be from developing status to developed, sooner or later.

Clean development leader

According to the report, only half of Indian industries monitored complied with government pollution standards. And these monitoring programmes do not cover many small and medium enterprises, which are less able to afford clean technology and pollution controls. Traditionally, Indian industry has been slow in adopting environmental standards in comparison to its speedy economic growth.

But in contrast to industry's generally poor environmental records, India is the world leader in Clean Development Mechanism projects. The Clean Development Mechanism (CDM), proposed under the Kyoto Protocol, is an instrument to promote foreign investment in greenhouse gas emissions reduction projects in developing countries. The latest figures put out by the Indian Ministry of Environment and Forests talk of an investment of 499 billion rupees in 591 CDM projects generating over 379 million carbon credits. But, is Indian industry doing anything at all except churning out project proposals on Clean Development Mechanisms?

Leading light

Some far-sighted corporates have taken unilateral action. Leaders like ITC and Tata Steel have shown foresight and taken steps to address their greenhouse gas emissions. ITC is one of India's largest private sector companies with interests in cigarettes, hotels, agri-business and information technology, and beyond. Company chairman Y C Deveshwar announced in 2006 that ITC had become "carbon positive". It has done so on the back of energy conservation measures, using low carbon fuels and creating carbon sinks in its large-scale agro-forestry programmes.

Tata Steel, which recently acquired Corus Steel, has also taken steps to stabilise and reduce its energy consumption. Some attempts have been made to drum up popular support for tackling climate change. Greenpeace has joined with CNN-IBN, the television news network, launching a campaign to replace incandescent light bulbs with energy saving lamps.

Shareholder pressure

There is now increased pressure from global investors for Indian companies to act on climate change. For the first time this year, the top 100 companies listed on the Bombay Stock Exchange completed questionnaires about their greenhouse gas emissions and preparedness to tackle climate change. The Carbon Disclosure Project, representing a group of 284 global institutional investors with assets of $41 trillion under management, has asked companies to evaluate the risks and opportunities facing them due to a changing environment.

Calls for better transparency on emissions and the evaluation of risk from rising temperatures are encouraging Indian companies to address the issue of climate change. Without Government incentives or regulations to reduce emissions, however, the majority of Indian business may continue stalling.

The Indian Government's position remains that global warming needs to be addressed through "common but differentiated responsibilities" and that the industrialised countries must bear the burden of their historical emissions. Until such time, it refuses to take on any green house gas reduction targets.

Indian authorities have started taking small steps by outlining new regulations promoting energy efficiency of appliances and developing green building codes. However, it seems larger and more comprehensive measures will have to wait until a post-Kyoto agreement takes shape.