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The pricing solution PDF Print E-mail
Tuesday, 04 November 2014 00:00
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Subsidised energy contributes to global warming

 

Given the scepticism over previous IPCC reports and how global warming has been lower than what has been predicted, it is not certain if the latest report will be taken any more seriously. More so since, at a time when large parts of the world are still wallowing in slow growth/recession, any solutions will require a considerable amount of spending on new technologies. The latest report calls for a 40-70% cut in emission levels by 2050 and to near-zero or below in 2100 if the increase in global temperatures is to be kept below 2 degrees Celsius over pre-industrial times. Expectedly, the debate in countries such as India remains stuck on the issue of who will bear the cost—the rich countries caused the problem, the argument goes, so why should poor countries such as India bear the expensive climate-mitigation costs? Whatever the validity of the question, the reason why countries such as India need to do something is simple, they will be the most vulnerable, whether in terms of floods and cyclones or in terms of the impact of rising temperatures on yields of crops such as wheat and maize. The impact of extreme weather events, in fact, is evident even today when, according to the climate-change sceptics, the earth is not heating up as fast as the IPCC scientists project.

While it is a good thing countries such as India are trying to increase the pressure on the OECD nations in order to get technical and financial help, there is a lot that can be done—indeed, that must be done—even given the resources India has. Encouraging more research on genetically-modified seeds, to get flood- and heat-resistant varieties, for instance, is hardly a costly solution. Similarly, increasing the use of natural gas to world levels—Prime Minister Modi is a great proponent of gas grids—will reduce emission levels while, it so happens, not increasing costs (natural gas is, for instance, cheaper than the oil-based LPG India currently uses for cooking). And though it is true that India cannot afford costly carbon capture and sequestration at the moment, just pricing fuels right will be an important first step. Not pricing electricity right, for instance, means that little attention is paid to using energy-efficient pumpsets in rural areas; not pricing energy right also means the adoption of non-conventional energy sources such as solar power look unattractive. Equally important, if India does not adopt solutions to lower energy intensity, as its growth picks up, it will find that it simply does not have the energy resources to fund the growth. Slice it anyway you like, there’s no getting away from the fact that India needs to get its global warming act together, regardless of whether it were the OECD countries that originally caused the problem.

 

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