Can poor countries afford to go green?

TThe 27th United Nations Conference on Climate Change (COP27) ended on 20 November in Sharm el-Sheikh, Egypt. Nearly 200 countries have pledged to set up a ‘loss and damage fund’ to help vulnerable countries affected by climate change. Developing countries have welcomed this development, which has been a long-standing request. Developed nations, however, are not satisfied with the level of commitment poor countries have shown towards reducing greenhouse gas emissions and phasing out fossil fuels. In a discussion moderated by Prashanth Perumal J., Navroz Dubash And Tejal Kanitkar discuss issues related to the cost of ecology. Modified excerpts:

Q /
What is the likely economic cost of climate change? How can poor countries weigh the cost of climate change against the economic cost of reducing the use of fossil fuels?

a / Navroz K. Dubash: It is well known that the cost of the impact of climate change is considerable for economies. As temperatures rise, the cost of not addressing climate change is likely to increase. There is enough science to suggest that this cost is high. The issue of weighing the relative costs of trying to mitigate climate change versus the cost of climate change impacts is more complex. We must not think of mitigation as a distinct thing, but rather think about the kinds of transitions needed to accomplish the mitigation. For example, there is a shift towards low carbon energy systems around the world; this is a technological shift, and the cost of those technologies has come down to the point where they are now more or less competitive with coal-fired power plants. It makes economic sense to invest in these technologies. But the transition is difficult and will be costly. I think that’s how we should frame this, not if but how we’re going to get there, and also how those costs are incurred.

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a / Tejal Kanitkar: First, are the costs of fighting climate change high? Yes. The fight is long and it doesn’t just include mitigation costs. Often the focus is solely on estimates of the cost of mitigation. Many of these estimates are speculative and we can be wrong on either side. For example, even 15 years ago we could not have foreseen the sharp decline in solar energy prices that we are seeing today. However, what makes the fight against climate change much more difficult is that for developing countries much of our infrastructure has yet to be built. How is it possible to build this with only renewable energy technologies? There is talk of the opportunity offered by renewable energy that downplays the serious trade-offs that exist in moving away from known technology too soon.

Q /
Is it fair to expect developing countries to reach the per capita income levels of developed countries with the use of renewable energy?

a / Tejal Kanitkar: Even the basic minimum, in terms of universal welfare, would require much higher energy levels. Much of our infrastructure still needs to be built. We need roads, houses, hospitals, schools, industries, etc. Is all this possible with renewable energies? No, it’s difficult. We need other sources of energy, also fraught with other concerns. The developing world cannot afford the luxury of unlimited use of fossil fuels, as the developed world has had. Climate change is real; we will deal with the impact. Therefore, we must pursue a more deliberate, targeted and optimal use of fossil fuels that will enable us to move towards a low-carbon future. It won’t be easy, but it is necessary; the developing world is much more vulnerable to the impacts of climate change. We must use our fair share of carbon to build resilience and create the means to move to a non-fossil fuel future. It is important, however, that our efforts are not used by developed countries to take advantage of us and that the benefits of our efforts must flow back to us.

a / Navroz K. Dubash: We cannot afford the luxury of unlimited use of fossil fuels or high carbon energy trajectories. If we all chose a high-carbon development path, the impacts of climate change would make development much less sustainable and undermine the benefits we seek from development. Does this mean we are obligated to a maximum low-carbon path? no. This is where your belief in the renewable energy opportunities available becomes very relevant. If you think there aren’t many opportunities, you won’t deviate far from a high-carbon path. If you think there are opportunities, you could deviate quite a lot. The solution really lies in focusing on finding common ground between economic development and climate mitigation efforts.

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We need to look for opportunities in the space of renewable energy and sustainable urbanization. I give examples. We need to build our cities around public transport and, to some extent, walking and cycling, to reduce emissions. Studies have shown that if you internalize the healthcare costs of coal-fired power plants, about half of coal-fired power plants today are not economically viable. There are many reasons beyond climate change to accelerate this transition.

a / Tejal Kanitkar: These are development goals that we need to achieve and there is likely to be some overlap. Public transport is discounted. But if we frame the entire transition economy-wise in this way, we could end up in a situation where we only look for development options that also have mitigating side benefits. It would be dangerous because we have examples of serious compromises in agriculture, for example. Recommend restrictions on irrigation supply to farmers because it would mean more energy, more emissions, etc. it is a problem because irrigation leads to an increase in productivity, which improves the resilience of farmers. So, we have to be careful that the idea of ​​mitigation doesn’t obscure development.

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a / Navroz K. Dubash: I don’t think anyone is saying that mitigation should be the overriding goal of development policy. The question is, can you approach this as a multiple-goal problem where you are looking at development as encompassing many things including growth, distribution, air pollution, local environmental benefits, and a low-carbon future? Is it legitimate to include mitigation outcomes or a carbon reduction target as one of the many things you try to steer your policy around? I argue that it is. I agree that we need to look at both the opportunities and the trade-offs. Look at these opportunities clearly and objectively, with mitigation as one of a number of different goals. It may be weighted less, but we should keep an eye on it.

Q /
Given the carbon footprint of many green technologies, can they actually help reduce greenhouse gas emissions? And are there solutions to the climate crisis that address the root of the climate issue, which is that it is a common global problem?

a / Tejal Kanitkar: The analysis of the life cycle emissions of renewable energy sources has shown that they are lower than fossil fuels. But there are other factors such as battery materials, raw material extraction, etc. the impact of which we will only know later as the use of green energy increases. This is the nature of technology and we will need to innovate to address these issues. There are arguments for limiting demand, returning to traditional ways of doing things, etc. I think that while sustainable consumption must inform our choices, the celebration of traditional ways of doing things ignores the difficulties this poses for large sectors, especially women.

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Explained | Who should pay for climate damage?

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Yes, the carbon space needs to be thought of as an example of the global commons. Its equitable distribution must be the starting point of how we think about the use of these common goods. Policies to impose limits on emissions must be designed with this understanding. But no high-income or even upper-middle-income country has been able to achieve high levels of human development without exceeding their fair share of the carbon space. So just being within our carbon space is going to be a challenge for India.

a / Navroz K. Dubash: Fossil fuel use should go where it has the greatest welfare gains. Using a ton of fossil fuels offers much greater welfare gains in poor countries where use is lower. Poorer countries should also try to limit emissions not just for global reasons, but because they will have all these other associated development benefits. Let us not forget that capping emissions is likely to converge with the goal of India becoming a more competitive economy in the future. India has made the mistake of focusing on renewable energy deployment, not production, in the past. We now think more in terms of becoming competitive manufacturers in these new low-carbon technology spaces, which is good. It’s a good approach to claim a large carbon gap if we need it, but try as much as possible not to use that claim.

Q /
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As far as global commons are concerned, the climate crisis is a global collective action problem. As a political issue, it requires countries to agree to limit their emissions many decades into the future. Political systems work on cycles of three, five or seven years. Thus, we have a gap between the scientific and political understanding of the problem. At the end of the day, this will be dominated by political understanding. I don’t think we will reach a political agreement on the allocation of carbon budgets. What we will have is political agreement on the means of support to accelerate the transition to a low-carbon future. This is what India needs to focus on.

a / Navroz K. Dubash is a professor at the Center for Policy Research, New Delhi; Tejal Kanitkar is an associate professor at the National Institute of Advanced Studies, Bangalore

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