Is It Time for India's Own Green New Deal? While India has already demonstrated remarkable national will through far-reaching sustainability focused policies, it is time to enact a catchall policy
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As we enter the second year of the 20s—the 2020s, that is—it's time to take a deep breath; we've been through a global disaster the likes of which none of us has experienced and while the pandemic is far from behind us, it's safe to say that the global zeitgeist currently looks towards hope.
The Indian economy is experiencing a recovery, even though the shape of said recovery may be up for debate. Still, regardless of whether the shape you're experiencing is a "U', "V' or "W' (a brief period of revenge spending followed by a brief lull, eventually leading to growth again), it is certainly a time for positivity.
So what have we learnt from this shared experience? I, for one, have realized that epic-scale disasters don't just happen in movies, they're very real and, well; I have some bad news.
The spectre of catastrophic climate disasters has become a frightening reality. This decade we will experience wildfires, severe storms, flooding, droughts, and other extreme weather events with increasing frequency, leading to incalculable losses of homes, livelihoods, infrastructure and life.
To put it another way, climate events will lead to more frequent and unplanned facility shutdowns, be it plants, mines or refineries. Expect commodity price variability and supply disruptions. The difficult business of industrial growth will be complicated further because of extreme supply chain uncertainties.
The other major lesson has been that life is terribly unfair; the pain caused by the pandemic was not equally distributed. The most vulnerable—migrant workers, daily wage earners and people who are "physically at risk"—have had to pay the highest price.
This is unfortunately also the case with climate change. While India has been responsible for only 3 per cent of cumulative global CO2 emissions between 1751 and 2017, we will be disproportionately impacted by rising global temperatures. In the coming decade we will have to brace ourselves for extreme weather, monsoon variability and resource scarcity, all linked to the realities of climate change.
While one could argue that regions which are historically responsible for the bulk of cumulative emissions like North America (25 per cent) and western Europe (22 per cent) should shoulder a proportionate share of the climate change burden, the reality is that India is on its own in this fight.
How do we ensure equitable, carbon-free growth for our nation in spite of the challenges presented by climate change?
While India has already demonstrated remarkable national will through far-reaching sustainability focused policies leading to the growth of the renewable energy sector, the adoption of clean cooking and large-scale distribution of energy efficient lighting, it is time for India to enact a catchall policy that mobilizes our nation towards sustainable and equitable growth, thereby making the pathway to emissions mitigation our key decision making filter for national policy and action. It is time for India's "green new deal'.
What does that mean for Budget 2021? The market penetration of home appliances for human comfort (like ACs ) is forecasted to grow 11-15 per cent CAGR until 2030, for example. The dual objectives of sustainability and equitable growth can be met by incentivizing consumers to purchase energy efficient appliances while also insuring that the value created by our internal demand stays within our country and contributes to our industrial growth.
I talk about policies that support the ESDM (electronics system design and manufacturing) sector and an idea to help promote the adoption of energy efficiency below.
To begin with, let us address challenges on the supply side. A common thread across industries this year has been the shortage of components and commodities. Semiconductors are possibly the most strategically important component across industries and India is 100 per cent dependent on imports in this field.
It's an open secret in the Indian EMS sector that during times of component scarcity companies will satisfy their national demand before servicing their export demand to India. The government must redouble their efforts to create semiconductor fab capacity within India.
Next, let's address skill development and R&D. The growth of the ESDM sector requires a skilled workforce. Further efforts and increased investment in skill development for electronics assembly should be made a priority along with a focus on training for upcoming energy services like rooftop solar, Energy efficiency retrofits for pumps, appliances and lighting.
Incentivize energy efficient (EE) appliance purchase behaviour.
Energy efficient appliances have the built-in benefit of reduced running costs, but have a higher upfront cost. The purchase of EE appliances should be incentivized through a tangible credit mechanism.
If, for example, a user purchases a 5-star rated AC they are likely to pay up to 50 per cent more than they would for a 3-star rated AC. Over its life, a 5-star AC will consume up to 10 per cent less energy than a 3-star AC, which translates to a substantial saving to DISCOMS (DISCOMs incur a loss of approximately INR 1 per unit of residential power) as well as to the central government by way of reduced fossil fuel subsidies and generation load.
Some of these savings should be passed on to the consumer as green credit that is added to an Aadhar-linked e-wallet. This green credit could then be used to offset government tax and levies like income tax, property tax, registration fees, etc.
India's climate future is in its own hands. Let's make the 2020's India's green decade!