 "<b>Montek S Ahluwalia:</b> Towards a strategy for climate change talks")
Many developed countries have already submitted INDCs that indicate absolute reductions in their total emissions from some base date. Developing countries are not expected to indicate absolute reductions, since their pursuit of development means higher energy use, which also entails higher emissions. However, they are expected to indicate what they will do to contain the growth of emissions compared with the business-as-usual projection. China, the world's largest emitter today, has indicated that its emissions will continue to rise, but will peak by 2030. The announcement of a peaking date has been widely applauded as demonstrating China's willingness to act as a responsible major player.
Should we announce something similar to what China has done? Some will say we should not be pressured into any hasty announcement and a comparison with China is unwarranted in any case because it is far ahead of us in development. However, we are also now seen as a growing economic power, and lagging behind China does not mean we should not set targets: only that our targets must reflect the difference in our situations.
As far as peaking of emissions is concerned, we could consider the date when our gross domestic product (GDP) per capita reaches what China's will be in 2030. China's per-capita GDP is estimated to be 2.2 times India's in 2015. If China's per-capita GDP grows at say 5.5 per cent a year between 2015 and 2030 and our per-capita GDP grows at seven per cent a year from 2015 onwards (the corresponding growth rates for GDP are 5.8 and eight per cent respectively), it is only in 2040 that we will reach where China is projected to be in 2030. On this basis, 2040 is a reasonable peaking date for India comparable with 2030 for China. If our growth rate is lower, the peaking date would be correspondingly later.
A similar aggregate target could be defined for reducing the emissions intensity of GDP. The 12th Plan targeted a reduction in emissions intensity by 2020 of 20-25 per cent below the 2005 level. This could be extended to aim at a 50 per cent reduction below 2005, to be achieved by 2030. This does not imply a cap on total emissions: total emissions in 2030 would be 3.4 times higher than in 2005 because, even though emissions intensity is halved, total GDP will be almost seven times larger than in 2005.
These options should be explored and examined by the newly formed National Institution for Transforming India, or NITI, Aayog. They have prepared a revised version of the Energy Security Calculator developed by the erstwhile Planning Commission and recently put it in the public domain for comment. It could work out the implications of different energy options and come up with reasonable aggregative targets regarding the total emissions trajectory up to 2030, as also the decline in emission intensity. These targets could then be considered by the Prime Minister's Advisory Council on Climate Change and approved by the Cabinet. This would help define an informed approach to what we offer as part of our INDCs.
We know that about two-thirds of what is needed to reduce emissions significantly would have to come from improved energy efficiency and the rest from a shift to greener fuels. We should highlight what we plan to do, on both counts. Energy prices are critical for energy efficiency since they incentivise energy efficient choices. We can legitimately highlight the fact that petrol, diesel and cooking gas are now sold at trade parity prices, and these prices will be adjusted as world prices change. For kerosene, an announcement to shift to cash subsidy, as with cooking gas, would complete the process.
We should also highlight the Perform, Achieve and Trade experiment for containing energy use in major energy-intensive industries. The first round is over and we could announce that the second round will start soon with a wider coverage of industries and also tighter energy-efficiency parameters. The reform and modernisation of the railways, which is currently being discussed, can also yield large energy savings, by reversing the trend of an increasing share of freight being moved by roads. Urban metro transport is another important component. Accelerating the shift to Bharat-VI standards for fuel is yet another.
The shift towards renewable energy should also be highlighted. The new target of 100 gigawatts of solar energy by 2022 has been well received internationally. We could project it forward to 2030 and indicate a correspondingly higher target and also the policy framework for incentivising it. We should also add ambitious targets for wind energy, nuclear energy and hydro-electric generation by 2030.
Publicising a target peaking date, whether it is included in the INDCs or not, will certainly put a stop to our being portrayed as a mechanical "naysayer". Climate change activists will, of course, immediately point out the limitations of peaking dates, which neither indicate the level at which emissions will peak nor the trajectory up to then, when those are the key parameters that determine how much carbon will be added into the atmosphere. If the issue is raised, we should concede that peaking dates are not the most important issue for negotiations on climate change. These should focus instead on (a) what is the available carbon budget for the world if the total stock is to be limited to a desired level and (b) how this budget should be distributed across different countries in a fair and equitable manner. No international agreement can be reached without agreement on this issue and it has thus far been systematically ignored.
Linking mitigation obligations to per-capita GDP is a radical departure from the traditional United Nations Framework Convention on Climate Change classification of countries into two groups: Annex 1 (developed) and non-Annex 1 (developing). That classification, which dates from 1992, suggested that all developing countries will have the same dispensation as far as limiting emissions is concerned. This puts China, the world's largest emitter today, on the same basis as sub-Saharan Africa - which stretches credibility. It is time to consider some other basis for differentiation, and per-capita GDP is perhaps the most logical. All countries below some cut-off level of per-capita GDP representing a peaking point could be allowed to expand total emissions, while all those above must reduce them in absolute terms. The pace of reduction must depend on the size of the global carbon budget by the time the agreement is reached and the extent of the adjustment should obviously be greater for richer countries.
An unresolved issue in the run-up to Paris is how to deal with the expectation of many developing countries that their mitigation action should be supported by additional financial flows. There is very little appetite for providing financial support additional to what already exists. It is not clear how this will affect the negotiating position of developing countries. It could lead developing countries submitting two levels of INDCs, an unconditional level of what they will do anyway and a second tranche of conditional INDCs, which would come into effect if additional financing is provided on a reasonable scale. That would at least tell world leaders what extra effort could be triggered if financing were made available.
The writer was deputy chairman of the Planning Commission