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Book Chapter

Climate change and India’s developmentTwo narratives: Building future competitiveness

Arunabha Ghosh
April 2017 | Technology, Finance & Trade

Suggested citation: Ghosh Arunabha. 2017. “Climate Change and India’s Development: Two Narratives” in India: Building Future Competitiveness, pp. 46-58. New Delhi: Confederation of Indian Industry.

Overview

This book chapter highlights that the climate risk assessments need to account for high impact events and outcomes even if they have only low probabilities today. It discusses the global energy revolution, including the renewable energy revolution in India. It points out that, going forward, the most important national security aspect for India’s manufacturing sector is resource efficiency. India needs to invest in R&D to stay in the race with the rest of the world. It also outlines the role of international trade and critical minerals in India’s climate-friendly development and the jobs’ potential in the renewables sector. Further, it provides concrete recommendations to energise India and for building India’s future competitiveness.

Key Lessons

  • Delhi, Ahmedabad, Bangalore, Mumbai, and Kolkata are projected to experience the highest absolute increase in heat-related morality this century.
  • The incidence of extreme drought affecting cropland could increase by 50 per cent in South Asia, on a high emissions pathway.
  • The once-in-30 years flooding could increase six-fold in the Ganga basin over the course of the century.
  • Cumulative emissions during 2011 to 2030 from China, the EU, and the US would be 218, 68 and 96 Gt-CO2 respectively.
  • By 2030, China, the EU, and the US will occupy 95 per cent of the word’s nearly century-long carbon space.
  • The fall in energy prices might provide temporary relief to corporate bottom lines. However, the issues such as low R&D spending, low technology penetration and innovation, and dependence on overseas inputs remain the bane of the Indian manufacturing industry.
  • Broad-based technology areas such as biotechnology, nanotechnology, micro- and nano electronics, advanced minerals and photonics, have disruptive potential to enable rapid innovation cycles.
  • Nanotechnology has applications in products that contribute up to 85 per cent of the manufacturing sector value add.
  • Photonics can leverage nearly 20 per cent of the gross value add (GVA) contributed by the entire manufacturing sector in India and 40 per cent of GVA in the service sector.
  • Biotechnology could impact 14.5 per cent of industrial GVA, but industrial biotechnology remains in infancy in India, compared to pharmaceutical biotechnology.
  • India needs to become part of a global supply chain and maximise resources available at home
  • India is import-dependent for seven of the 12 minerals critical for the Make in India initiative.
  • Deploying 100 GW of solar energy and 60 GW of wind power will create 183,000 jobs in wind 100 GW of solar energy and 60 GW of wind power will create 1.1 million jobs in solar and 183,000 jobs in wind

Key Recommendations

  • Initiate regular climate risk assessments by identifying the biggest risks, considering the full range of probabilities, and using the best available information.
  • Broaden the participation in climate risk assessment process to include political and business leaders, scientists, and experts in politics, national security, economics, insurance, technology, and public health.
  • De-risk investments in renewable energy by standardising power purchase agreements, inserting clauses for deemed generation, and ensuring state guarantees to reduce counterparty risk, large land banks, and innovatinve financial instruments.
  • Deepen the (green) bond market in India by establishng green investment guidelines and setting portfolio-level mandates, such as sub-categories within the priority sector lending targets for bands and social and infrastructure investments by insurers.
  • Establish a futures commission to assess new patterns of economic development, drivers and disrupters of strategic and emerging technologies, India’s strengths and weaknesses, and identify opportunities for creating value in a new climate-resilient country.
  • Participate actively in negotiations on environmental goods and services.
  • Identify critical minerals for India’s manufacturing future. This will need institutional coordination between the Geological Survey of India and the Indian Bureau of Mines, increased domestic exploration and R&D in mining and mineral processing technologies, and diplomatic and trade agreements to seek overseas mining assets.
  • Invest in lifelong learning in skilling programmes. Renewable energy training clusters could be located near ongoing projects. Also, focus on semi-skilled jobs in construction, commissioning and operations, as there are greater opportunities in longer-term — and transferable — employment via semi-skilled jobs.
  • Reaffirm commitment to the Paris Agreement and the International Solar Alliance.
We must treat climate change as a threat to our national (and global) security, not because it is a problem the military can solve, but because a focus solely on what we prefer to happen would be dangerously complacent.

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