Big reforms needed even for moderate emission cuts
Given how India has been one of world’s bigger emitters of greenhouse gases (GHG) over the past few years—though its per capita emission has been very low—it has done well to commit to a reasonable target to rein in emissions. By 2030, while India has not committed to reducing emission levels, it has committed to reducing the emission intensity—emissions per unit of GDP—by 33-35% at a cost of a whopping $2.5 trillion at today’s prices. This does pale in comparison with other countries like Brazil and China, but there are many advanced economies like Australia, Canada and South Korea and developing economies like Russia and South Africa which have not proposed any significant action. Also, as India has pointed out, while it has lowered its energy intensity by 12% in 2005-10, no country in the world has been able to achieve a Human Development Index of 0.9 or more without an energy intensity of at least 4 tonnes of oil equivalent compared to India’s 0.6 right now.
China, the world’s top emitter of GHGs, has committed to a peak emission deadline of 2030 and promises to generate a fifth of its power needs in 2030 from zero-emission sources such as solar, wind, hydropower and nuclear; that means it needs to set up more of renewable capacity than its existing coal-fired capacity. Brazil has committed to a 43% cut in overall emissions by 2030 from its 2005 levels, and unlike India, Brazil says its commitments are not contingent upon financial and technological support from the developed nations.
Of course, promising a top-down target is one thing, delivering quite another—India’s 38-page plan suggests, however, that some amount of bottom-up sectoral planning has been done. So, for instance, there is a 100 GW solar power commitment by 2022, along with a 60 GW wind energy one. There is a plan to have more freight moving via railways, to increase its share from 36% right now to 45%, so as to reduce emissions from diesel-fired trucks; the dedicated freight corridors alone are expected to cut carbon dioxide emissions by 457 million tonnes over 30 years while a metro like the Delhi one can cut carbon dioxide emissions by 0.6 million tonnes each year. There is also talk of increased carbon taxes to discourage use of fossil fuels.
All of this, however, needs serious reforms. Ambitious renewable energy production targets will go nowhere unless state electricity boards, the largest buyers, are solvent and unless consumers start paying market tariffs; indeed, without market-based tariffs, it is difficult to see farmers moving to solar-based power for instance. The share of railways in freight is not going to rise unless huge passenger subsidies are not reduced since these are cross-subsidised by overcharging on freight. Nor is it going to be possible to reduce dependence on dirty coal unless prices are raised for cleaner coal technologies or for natural gas—the latter has not moved an inch since the NDA came to power—and paying user charges is critical for this. There has been, similarly, no move at all on agriculture reform, though this is a vital part of the emission control strategy. Indeed, even if India gets some part of the financial assistance it needs, the $2.5 trillion at 2014-15 prices will require substantial hikes in user charges. Even fulfilling the modest emission intensity target that India has made will require substantial reforms, reforms the country has barely begun on as yet. And, as the deadline for the Paris talks nears, it is reasonably certain the pressure to make more meaningful cuts will increase.