Climate funds & tech challenges for India

India will stay within the Paris climate accord despite US President Donald Trump's declared intent to pull America from the pact, but faces a tougher pathway to the finance and technology it needs to meet its goals, officials and experts have cautioned.

By G.S. Mudur and Charu Sudan Kasturi
  • Published 3.06.17
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Donald Trump

New Delhi, June 2: India will stay within the Paris climate accord despite US President Donald Trump's declared intent to pull America from the pact, but faces a tougher pathway to the finance and technology it needs to meet its goals, officials and experts have cautioned.

America's withdrawal also means that India and the other signatories would need to do more to cap global warming to below 2°C, a goal experts say is impossible without participation of the US, the second-largest emitter of Earth-warming greenhouse gases after China.

India's commitments in Paris to control its emissions were conditional on financial aid and technology support from developed countries to help it shift from fossil fuels to clean energy.

The Narendra Modi government, which ratified India's promises last October, estimated in its formal list of commitments at the 2015 Paris summit that India would need $2.5 trillion to achieve its goals by 2030.

Trump's refusal to allow American contributions to this effort reduces the pool of resources India and other developing nations can turn to, and may seed doubts that nudge other developed countries to tighten their purse strings, the officials and analysts said.

But growing domestic concerns about fossil fuel-linked air pollution and erratic and extreme weather patterns associated with global warming, and a diplomatic desire to not appear to renege on a global commitment, are keeping India from considering a pullout.

"India will be a responsible nation with regard to climate change," Modi said at a St Petersburg economic forum today, hours after Trump's announcement.

"The cultural heritage of India is dedicated to nature, to the study of environment. The exploitation of nature is a crime."

Indian environment minister Harsh Vardhan said the country remained committed to the Paris pact despite Trump's decision. "Our government is committed irrespective of the stand of anyone, anywhere in the world," he said.

The immediate implications of America's withdrawal from the Paris accord on India's funding requirements for its climate goals are limited, although not negligible.

Washington has committed only $3 billion and transferred $1 billion for a UN-monitored Green Climate Fund aimed at financing the transition of developing nations from fossil fuels to clean energy. The Paris agreement envisaged a $100-billion kitty a year with the Green Climate Fund by 2020. It currently has $ 10.3 billion in commitments.

Much of the funding that India and the other developing nations are eying is expected to come from industry and in the form of commercial deals - loans, not grants - unaffected directly by Trump's decision.

"Most of the funding we're talking about is in the form of investments, not grants," Pradipto Ghosh, former environment secretary and ex-climate negotiator for India, told The Telegraph .

But the partnership India had built with the US to combat climate change under Trump's predecessor Barack Obama is the most detailed New Delhi has with any capital. India was counting on using it as a template for other relations.

Through a special partnership, the governments of India and the US had between 2009 and 2016 mobilised $2.5 billion from the American private sector for clean energy investments in India.

Last June, when Modi visited Obama in Washington, the two leaders had announced two additional initiatives estimated to raise an extra $1.4 billion for Indian solar energy projects.

Under another agreement, the two governments have over the past two years jointly funded research in renewable energy technology. And the US Export Import Bank agreed under Obama to offer India concessional loans to buy American renewable energy technology.

The fate of those agreements and promises is now unclear.

Most analysts believe that the US pullout would lead to uncertainty over the future pace of collective action to combat climate change. Some fear that the US move may slow down momentum in other countries, although others believe the roll towards clean energy is unstoppable.

"There may be a domino effect of inaction," said Thiagarajan Jayaraman, a climate policy analyst at the Tata Institute of Social Sciences, Mumbai. "There is a fear (that) this attitude may cascade: other countries, perhaps the UK, Russia and Japan, might choose to remain within the Paris agreement but will slow down their commitments."

Washington's pullout "is a very bad signal, not only for climate policy but also for the willingness of the US to participate in solving global problems", said Ottmar Edenhofer, chief economist at the Potsdam Institute for Climate Impact Research in Germany.

Edenhofer argued, however, that America's withdrawal did not mean the world's efforts to reduce emissions would necessarily collapse. "At the (recent) G7 summit, we saw that the remaining six countries continued to stand up for climate protection and that the Trump administration was very much isolated," he said.

Sunita Narain, director-general of the New Delhi-based non-government Centre for Science and Environment, was less confident. Trump's decision, she said, has "sounded the death knell" for the Paris agreement.

But for India, violating its commitments under the Paris pact is not a realistic option at the moment, the officials and experts said.

Climate scientists and policy makers believe that India needs to continue to curb the growth of its emissions and expand its use of renewable energy to achieve cleaner air and reduce its dependence on imported fossil fuels.

Diplomatically, India prides itself on an unblemished record when it comes to adherence to international commitments. India cites that record in part to argue for positions at the global high table - whether at export control regimes like the Nuclear Suppliers Group or at the UN Security Council.

That record is also what India uses to draw contrasts with Pakistan - over its denial of consular access to former Indian naval officer Kulbhushan Jadhav whom it accuses of being a spy - and China, over its refusal to accept an international tribunal's order rejecting some of Beijing's maritime claims.

"India is a law-abiding nation," foreign ministry spokesperson Gopal Baglay had said in May, after the international court of justice at The Hague ordered a stay on Jadhav's execution by Pakistan. "We follow international laws."

Modi asserted India's commitment to the Paris pact during his current visits to Germany and Spain. In Berlin, he even nudged German Chancellor Angela Merkel to prod other developed nations to speed up climate finance to developing nations - almost acknowledging her as India's preferred leader of the global order.

America's withdrawal may also carry a silver lining, some analysts said. "India becomes an even more attractive investment destination for private capital in renewable energy," said Arunabha Ghosh, head of the non-government Council on Energy Environment and Water in New Delhi.

India received an estimated $20 billion over the past two years for the renewable energy sector primarily through private investments, he said.

But that funding for India is unlikely to fully mitigate the impact of America's withdrawal, even though some experts are hopeful that India and China can partly counteract the effects of Trump's pullout through their steps.

Even if individual countries stick to their commitments, the ambitious global goal that 194 nations decided on in Paris hangs on America.

"It will not be possible to meet the 2°C target without the US," Edenhofer said. "We will probably be able to bear four years of Trump as US President. Eight years would certainly be a disaster."