After making great strides in promoting renewable energy, India is once again singled out as a country lagging behind when it comes to global climate. Its negotiators blocked the deal to curb emissions at the G-20 meeting in Naples earlier this year, posting a catchy dissent calling on the group to focus on reducing high emissions per capita in rich countries . India then skipped a ministerial meeting meant to prepare for the next global climate change summit – the only one of 51 invited to do so. Its leaders are clearly feeling the pressure to set a date to reduce net carbon emissions to zero, as rival China has done.
The West’s emphasis on India’s lack of a net zero target, however, may be misplaced. He risks missing a potentially major change underway in the country.
While Prime Minister Narendra Modi has always taken climate change seriously, he has generally not highlighted it as part of his domestic policy agenda. His recent Independence Day speech was different. Modi uses the speech, delivered from the ramparts of Delhi’s Mughal-era Red Fort, to describe his government’s major upcoming policy initiatives. Previous speeches kicked off its ‘Make in India’ manufacturing push and program to improve India’s sanitation and hygiene.
This year, Modi focused on climate change. He adapted the call to his hyper-nationalist image, presenting the energy transition as an issue of “environmental security”, as crucial as defending against countries like China and Pakistan. He called for more autonomy, warning against India’s dependence on imported oil.
Modi spoke of a new “national hydrogen mission” to develop green hydrogen and fuel cells, and the electrification of India’s massive rail system. He could also have mentioned the new government subsidy for electric vehicles, which could make electric two-wheelers, in particular, attractive to India’s vast population of scooters and motorcycles.
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I doubt the Indian government has shifted so strongly to greener rhetoric due to pressure from foreign diplomats and climate activists. Modi is more likely to appreciate India’s need for a compelling new growth story.
India’s growth engines had cooled even before the Covid-19 pandemic struck. Modi’s great manufacturing push hadn’t really paid off; private investment was at historically low levels. In the early 2000s, confidence that India would be the next China, the world’s new factory, collapsed after two decades of disappointment.
Indeed, there is no longer a story of growth in the Indian economy that can excite both voters and investors. This is what Modi hopes to recoup with his new story on green growth.
Fortunately, the focus on greener growth could also work. In recent decades, excessively low domestic prices for raw materials such as iron ore and coal have contributed to high growth rates. This boom collapsed amid accusations of corruption and cronyism, as well as objections from many people living in heavily polluted mining and industrial areas. Politically, Modi must find a less extractive growth model.
Focusing on green opportunities also offers a possible solution to the problem of private investment in India. No one expects the cash-strapped Indian government on its own to create new networks for urban mobility, new housing and energy-efficient factories. He’s going to need help from the private sector. If Modi’s government can reduce the risk of investing in these greener sectors and activities, by making investment proposals attractive to global and domestic capital, it may well reverse its dismal economic record.
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Perhaps the rest of the world should stop expecting India to fit into its own climate action parameters and instead focus on pursuing these new ambitions. While we should always make commitments on the new green agreements with a lot of skepticism, on this occasion, I am a little more optimistic. In other countries, “green growth” is typically a heavy-handed attempt to reconcile the divergent priorities of employment-focused politicians and climate-focused activists. In India, this is the only game left in town, because we may have lost in all the others.