Interview

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With Jairam Ramesh, Minister of State, Ministry of Environment and Forests, Government of India.

 

M.K. Venu: There was no substantive deal at Copenhagen. Who do you think is responsible?

Jairam Ramesh: Well, clearly the Danes could have managed the situation better. Though the process was quite transparent, it still left a lot to be desired. Negotiations collapsed for two days on account of certain differences between the G77 and the developed countries, which could have easily been bridged. There was a small cabal of developed countries who were hell-bent on trying to achieve a particular end result and I think that game was seen through right in the beginning. So, if I were to blame any one single force, it would simply be the intellectual and managerial deficiency on the part of the host government, which is basically the president of CoP.

 

There is also a feeling that Kyoto and the UNFCCC framework are no longer valid, or at least in the future will not be valid, as the United States is inclined to negotiate directly with the BASIC (Brazil,South Africa, India, China) nations.

No, that is not correct, although it is true that the accord which was agreed to by 29 countries in Copenhagen was made possible because of the negotiations between President Obama and the four BASIC heads of state. But having said that, the UNFCCC remains the fundamental anchor of all climate change negotiations. The Kyoto Protocol is the only legally binding instrument that has been negotiated in the international arena. It is now in intensive care. The US has not ratified the Kyoto Protocol and many countries, including Japan, want to opt out. China too is not part of the Kyoto Protocol. So, the Europeans are saying, why should we take on responsibilities as part of the Kyoto Protocol while the Americans are not a party. The Americans are saying how can we be part of the Kyoto Protocol when China is not part of it.

The fundamental problem in today’s context is that the two countries that account for 45% of greenhouse gas emissions – the US which accounts for 22% did not ratify the Kyoto Protocol and China, which is the no. 1 emitter at 23%, is not obligated to be a member of the Kyoto Protocol. So, while the Kyoto Protocol has certain inherent limitations, the fact is that it remains the only legally binding instrument that has been negotiated. It is in intensive care but has got a fresh lease of life since at Copenhagen the mandate was for continuing negotiations for the second commitment period, which means that post-2012 the UNFCCC remains the anchor for negotiations.

One of the problems in all these agreements is the absence of economic criteria. There is, for example, no reference to per capita income anywhere in any of these agreements. The notion that as countries progress up the economic ladder and their per capita income increases, they take on increasing levels of responsibility is not true. So, the fundamental lacuna in this intellectual edifice of climate change negotiations has been a lack of graduation criteria based on economic parameters of which the per capita income is the most important and widely accepted. We need to address it, but it is too late in the game unless we redesign the architecture, which does not seem to be on the horizon.

 

Who can redesign the architecture?

All 194 countries have to come together for a new architecture, but I don’t think that is going to happen.

 

Did you feel that if per capita income becomes a criterion then it would be easier to apportion the future carbon space?

Absolutely. It is a fundamental principle. Graduation is a fundamental principle. Unfortunately, we see the world as divided into developed countries and developing countries, but the world reality is more complex than that. It is a very binary sort of a distinction that has been drawn though for example, within the G77 there are now 43 countries who belong to the AOSIS group, the Association of the Small Island States, who want India and China to take on much more ambitious mitigation commitments. I would have liked to see a formal place for graduation based on per capita income so that as countries move up the economic ladder, as they become richer and pollute more in terms of greenhouse gases, they also assume greater responsibilities for reducing them.

 

Are you suggesting that in the absence of an economic criterion and with little hope that it can evolve, these negotiations are unlikely to go anywhere in the future?

I don’t see graduation coming in at this late stage. I see negotiations as being difficult, frankly because the Chinese would be under pressure not to take on legally binding commitments, and the Americans clearly don’t want to be part of an internationally legally binding regime. Further, their commitments are pretty modest. They are very aggressive for the year 2050, talking of 80% reduction, but by 2050 we will all be dead. The proof of the pudding is what commitments one is making for 2020. And there I am afraid the US has been quite modest because, translated to a 1990 reference level, they are talking of only a 3-4% reduction in emissions. True, it increases, it ramps up as you go to 2030 and 2050, but the mid-term target for 2020 on the part of the US is very small. The Europeans are proposing a 20% reduction on the 1990 reference levels, and the developing countries have said that it should be between 25% to 40% reduction. So we are nowhere close to what our requirement is as far as the mid-term target is concerned.

 

India’s voluntary commitment in regard to reduction of emission intensity of GDP up to 25% seems to take us much closer to the Chinese position. But there is also a feeling that the Chinese may move away from this very soon. Once they become a fully developed country with a higher per capita income, what will India do at that stage?

China is undoubtedly under great pressure because today it is the no.1 emitter at 23% of world’s greenhouse gas emissions, and that will increase if it is to sustain these levels of economic growth rates. But it has started thinking of peaking years; there is a Chinese think tank which issued a report that talks of a peaking year of 2025 to 2030 on the outside. Though not an official Chinese government report, it has a certain importance. Similarly, the South Africans too have talked about peaking. Peaking means they will start going down. Whether China will ever agree to internationally legally binding commitments, I am not sure, though they have announced a 40-45% cut.

 

Do you think India will also follow a similar strategy and have its own voluntary peaking commitment?

No, but you see India is in a different ball game because we are today at about 5% of world greenhouse gas emissions, and by 2020 we could reach about 8-9%. So, we will be world no. 3 after China and the USA. The EU as a group too will be no. 3, but if one takes individual countries it would be China, America and India. But the gap between China and America and India would be large. In other words, nos. 1 and 2 will be close at around 25% and the third will be at about 8-9%. So, there will be a large gap. In per capita terms, of course, we will be low; by 2020 we will not exceed 2-2.5 tons per capita at most. So, while in per capita terms we will be low, in terms of absolute numbers we would still be no. 3 in the world.

Our target of 20-25% reduction in emissions intensity (not emissions) by the year 2020, on 2005 reference level, is in my view easily achievable. In fact, we will do better than this. I am more than convinced that if we continue on our trajectory of super critical power generation and move to the next stage of ultra super critical power generation, IGCC becomes a reality, the energy efficiency norms, the national mission on energy efficiency, the market based mechanism which is on the anvil, and so on, I have absolutely no doubt that this is a target that we will easily achieve. I also want to emphasize that the reduction in emission intensity has many collateral benefits. It is not just greenhouse gas emissions, it makes our economy cleaner, we cut fewer forests, which is good for all-round ecological security. So, one should not look at emission intensity targets only from a narrow point of view of greenhouse gas emissions, but also the many collateral co-benefits which affect ecology and environment, and thereby public health, and a variety of other issues as well.

 

The prime minister, before he went to Copenhagen, made specific statements that as part of the differentiated responsibility clause in the UNFCCC, we would expect the developed countries to transfer technology on easier terms. Now you are saying that China or the US may not even agree to a legally binding deal; so where do things stand? Is it reasonable for us to expect that there will be technology transfers?

Let us be realistic. Nobody will give us money in large quantities, nobody is going to transfer. There is no such thing as technology transfer in today’s world.

 

If the governments don’t transfer, is it the private sector which transfers?

Yes, this peculiar notion in our country that there is a thing called technology that is transferred is a completely wrong notion. Technology is a commodity, which is acquired, which is purchased, which is negotiated, which is stolen in some cases; it is never just transferred out of some altruistic motive or guilt for past sins. India must get out of this ‘technology transfer’ setminds and get into the mindset of technology development, technology partnerships and technology collaborations. And one more thing – there is a wholly wooly debate in this country on the IPR issue. The IPR issue in pharmaceuticals which has conditioned our thinking is of an entirely different nature and dimension than in the climate change area where IPR is really not the fundamentally binding constraint as it is in the case of drugs, for instance.

 

Or transfer can happen through normal trade route?

It may be a trade route, investment route, there are various routes; that is why I never use the word technology transfer. Nobody is going to transfer technology. But one will have technology transactions like BHEL and Alstom have a technology agreement for super critical turbines; BHEL has an agreement with Siemens for super critical boilers. That is not technology transfer.

 

In this context Gordon Brown recently wrote a piece in ‘Newsweek’ saying that 33 trillion dollars worth of green investments in energy and infrastructure is potentially possible by 2030. Do you think that a lot of this could arise in China and India?

There was a McKinsey report, which broadly I agree with, that 80% of the infrastructure that India requires for the year 2030 remains to be built. So, this gives us a phenomenal opportunity to leapfrog, for introducing new technology which is green technology, and I would say that this green technology is a phenomenal leadership opportunity for Indian business. You know what we have done in IT we can do in GT, in green technology. GT (not Grand Trunk!) should be the next frontier to be conquered by Indian entrepreneurship. Suzlon is already the world’s 5th largest wind energy company. Today, when you look at the top 10 solar companies in the world, four happen to be from China. Clearly, the Chinese have sensed a business opportunity and are taking a strategic gamble that by the year 2020 they will be the world’s leading supplier of green technology. We too have the entrepreneurship, we have the skills.

 

Is India also looking at it as a strategic opportunity?

We are not fully. We sometimes see this as a threat. Some of our industry associations are still stuck in the old mindset; they don’t see this as a business opportunity.

 

But they say that the US is using this to leverage their future trade. Since the West is in decline, they think that green investments are now their only hope.

We have collaborative partnerships with the US – I don’t subscribe to a view that writes an epitaph for the US. The US remains the mightiest innovation engine the world has ever seen and it will continue to remain at the frontiers of technological innovation. It has the best scientific talent, the best technological environment and so, will continue to be a major player. If we can have creative partnerships with US companies, our companies too can emerge as world leaders, just like we have shown in IT and mobile telephony. We really can because we have a large enough domestic market to be able to position ourselves internationally as well.

 

But one criticism is that while China is investing hugely in green technologies, India has done little and we are not thinking long-term.

We don’t because our entire thinking on climate change is being overly influenced by international negotiations. We don’t have a full strategic domestic agenda.

 

So, there is no indigenous thinking?

Not so far. Everything has been oriented to whether we are mandated to do this by the Kyoto Protocol, or the UNFCCC. This is a wrong approach. International negotiations are only one aspect, but the more important issue is the domestic strategic agenda and how to implement it with a sense of purpose and seriousness, both in the public as well as in the private sector.

 

Why has that not happened?

We need people who can think differently, who can think out of the box. We are still more worried about square brackets, semi-colons; we are really fighting over is and was, and could and should, and will and shall. The domestic issue, an important domestic strategic agenda to enable India to build this new green infrastructure and also acquire a global leadership role, is neglected.

 

What about the road map for a low growth carbon strategy?

The Planning Commission has set up a working group with Kirit Parikh as chairman. It has a lot of think tanks, economists, engineers, policy-wonks who are looking at the 12th five year plan. We are committed to a low growth development strategy for the 12th and the 13th plans and they have prepared a sector road map for power, industry, transport, agriculture, buildings, forests – these types of areas.

 

Do you think we will compromise our strategic thinking at the domestic level by giving the US an assurance that we will consult them on our national plan?

Consultations and analysis are a part of our development activity. We have trade policy consultations with the WTO – that has not eroded our sovereignty. Consultations and analysis are different from scrutiny.

 

Some American senators made a statement in the US saying that they can challenge India if she fails to meet commitments...

Not senators, David Axelrod made it and I immediately contradicted it saying that David Axelrod is the Arun Jaitley for Obama, their professor of rotational medicine, i.e., spin doctor. We have Article IV consultations with the IMF every year on fiscal and monetary policy. Has that eroded our sovereignty? We have a transparent system, whatever we do is done openly, it is available in the public domain. If we think that we can do something secretly, then we are living in a fool’s paradise. We have nothing to hide and whatever we do will be put in the public domain and whoever wants to talk to us, can. If you think that the documents that we produce are not subject to analysis by investment banks and international institutions you are grossly mistaken. So, there is nothing wrong in consultations and analysis. We should welcome it; we should welcome new ideas and we have said so in Copenhagen.

 

There is a difference between taken note of and adopted.

If it (the Copenhagen Accord) had been adopted, all 194 countries would have been on board, whereas taken note of means that only 29 countries were party to it, other countries saw it, but did not necessarily agree to it in full. Most countries did not have objections to the substance of the Copenhagen Accord but had problems with its process. The manner in which the accord was arrived at is what caused most problems and headaches to many countries. The substance was not really disputed.

 

Your comments on the Brazilian press reports on the manner in which Obama’s team came into the room on the last day where the BASIC countries were sitting and negotiating. What exactly happened?

I have explained this at length in Parliament. On the 18th, when the talks had broken down, the four BASIC countries’ heads of state were meeting and trying to see how they would mount a counter-strategy in order not to be painted as the villains because the Europeans and the Americans were trying to portray them as the cause of the breakdown at Copenhagen. We did not want that impression to gain ground, so we were meeting to see how we could have a strategy for that. Obama wanted to meet Wen Jiabao, who told him that he would meet only with his BASIC colleagues. We were meeting at round 6 o’clock on the 18th and Obama, obviously in search of Wen Jiabao, was pleasantly surprised to find him with the BASIC heads of state, and we started negotiations that lasted for about 75 minutes and we got our way on most issues.

On the first issue, for example, Obama said that he wanted a global goal of a 50% reduction in emissions by the year 2050. We said no, that we will not agree to a global goal in terms of percentage reductions but will only restrict it to a temperature increase of 2°C. Because if the world is going to come down by 50% and the since developed countries have announced that they will come down by 80%, that automatically determines how much carbon space is available for developing countries. We did not want that since it restricts our space and said that we will only go along with temperature increase. He agreed, which was a victory for BASIC.

The second issue was around four words to ensure transparency. Should it be verify, or review, or scrutiny, or assess. Finally, we settled on consultation and analysis. So, here I think we got, say 60% marks, Obama got 40%; in the first, we got 100 and Obama got zero. The third issue he raised was that the Europeans wanted to make this agreement legally binding. We said no. We will not have a legally binding agreement; the only legally binding agreement we recognize is the Kyoto Protocol. He said fine. So, we got 100 marks on the third issue. These are the three issues. The BASIC group got, I would say, 2.6 out of 3, which is virtually 90%.

 

Going forward do you think that Basic unity will remain?

We are calling a BASIC meeting on the night of 23 and 24 January; the four ministers are meeting in Delhi. Zen Hua, the Chinese minister concerned, the Brazilian minister for environment, the South African minister for environment, and me – all of us who met regularly in Copenhagen. We will take stock of Copenhagen, review where we are, what is to be done in future and then, we will take it from there.

 

You just said that the Chinese would never sign a legally binding agreement. Therefore, since they are part of the BASIC grouping, it follows that India will also not.

We are not interested in signing any legally binding agreement. I have said that India will reflect its domestic commitments internationally. Mark my words, India will reflect its domestic commitments internationally, but not in a legally binding framework. We are prepared to reflect our domestic commitments internationally in any form except a legally binding framework and I stick by that commitment. Got that?

 

In your meeting with the other BASIC countries, will you try to push for an economic criterion in some form or the other?

It is too late, we cannot do it now. By the way, the French have floated a proposal based on per capita income; it is called a plan for climate justice.

 

How have India and China responded to that?

I responded very positively. I don’t know the Chinese reaction, but I can tell you that the French proposal is a very innovative one.

 

Did it come after the conference?

It came two days before Copenhagen so it could not be taken up seriously. But it is a very interesting proposal.

 

Given that India and China will be the biggest emitters in the decades ahead, if they don’t give a legally binding agreement, what happens to the overall objective of limiting warming under 2°C temperature?

We are committed to limiting this 2°C; also science is evolving. Look at this whole controversy over the Himalayan glaciers for example. Science is complex. People often speak with a great deal of certainty on such matters when they claim ‘science has shown’, ‘science has established’… that is not true. There is a great deal of probability associated with this. So, I think one has to be a little cautious, a little careful, but at the same time we have to recognize that global warming is a reality, that climate change is a threat to us and we have to mount a creative, intelligent, innovative response which is rooted in our interest, not as a response to international negotiations.

 

Do you think the coming budget will also reflect some of our Copenhagen commitments?

Not the budget; fiscal policy for a green economy I think is a very important issue. What type of fiscal instruments, tax breaks, accelerated depreciation, and so on. By the way, the reason why we have 8000 mw of wind-based capacity in India is because of tax breaks, accelerated depreciation and fiscal incentives that were given. So, fiscal policy has an important role to play; procurement has an important role to play as does regulation, for example electricity regulation; tariff policy too has an important role to play in pushing the use of solar energy. So, these are issues that we have to look at. Kirit Parikh’s 25-member group would examine the issues over the next year or so. They will give us a report in time for the 12th five year plan.

 

Realistically, do you feel that by 2030 India will continue to produce nearly 50 per cent of its electricity through coal-fired plants?

We need to add about 13,000 mw of capacity every year and I would say realistically that 6,500 to 7,000 mw would continue to come from coal even after the gas discovery. Up to 2030 I can’t see otherwise. There is no running away from it. Hydel has severe environmental impacts; nuclear has yet to ramp up and gestation periods are very long; and even if we use all the 80 million cubic metres of gas, we are not going to get more than 15,000-20,000 mw of power. So, it is really coal that has to be the thing. But better coal, cleaner coal; that is why I said super critical, ultra super critical, IGCC, there are so many options in coal.

 

Why is the West so paranoid about coal fired energy in India?

Not the US; there is a commonality between the US, China and India. We are the three largest coal users. Poland, for example, does not want to give up on coal – France wants to give up on coal but is sitting in a pretty position because 75% of its electricity comes from nuclear power. So, it all depends. The Scandinavians, small regions, small populations, they can afford to run on gas and renewables. But if we are talking of the year 2040, we will be a population of almost 1.6 billion people. We are talking of adding 500 million people in the next 30 years. So, for a nation of 1.6-1.7 billion, to think that only renewables will provide an answer is being romantic. But I think we have to be aggressive on nuclear. That is one thing that is clear. Nuclear is good from a greenhouse gas point of view, it is a clean technology, and we need to be much more aggressive. In nuclear we have to reduce gestation periods and hopefully we will make a success of our fast breeder technology. Once the fast breeder technology comes then I think we can realistically hope to have 25% of our power generation coming from nuclear by the year 2050, up from the present level of about 4%.

 

Do you think India’s political economy will realistically allow initiatives which result in costlier energy for the larger masses?

No, it is not true. The larger masses are not polluters – their per capita consumption is so low that they will not be adding to the stock of greenhouse gases. So, by fulfilling the electricity needs of 400 million people, our basic requirements for electricity can be very well met in this framework of 20-25% reduction in emission intensity. That is no argument for not reducing our emissions.

 

Solar is nearly four times costlier than thermal. Isn’t it a contradiction that you are selling solar to the poor people?

No. There are about 25,000 villages in India where you cannot extend grid electricity, where solar will have to be looked at. Ladakh, for example, has to be solar, many parts of Rajasthan will be on solar. So it depends on the load – solar is going to be load specific and location specific.

 

I am raising a larger question of this huge opportunity you talked about relating to green investments and green trading. That can happen only if the costs are affordable, isn’t that so?

There is no doubt in my mind that in the next 15 years, costs will dramatically come down in renewables. With the level of investments that the Americans are making it has to come down; otherwise how will America fulfil its target of reducing emissions by 80% by the year 2050. The only way they can is by improved technology. Technology will drive costs down.

 

In the years ahead will our position remain close to that of China and the BASIC group? After all, India is about 15 years behind China in development indices.

It is a negotiating strategy. After all, we are not in the same boat with China as far as emissions are concerned. But negotiating wise, the collective strength of these four countries is that when we negotiate we are a voice. Obama came to see us, we did not go to see Obama. When Brazil, South Africa, India and China get together and their positions converge, people listen. But this is not to say that there are no differences between India, South Africa, China. For example, South Africa has announced a peaking year. China, as I said, has suggested a peaking year and they are the world’s largest emitter. Brazil’s approach to climate change is conditioned heavily by deforestation. So, each of us is different but at the same time we have a certain commonality of interest. Politics is driving us to come together and I think 1+1+1+1 has become 5, not 4. Also I want to say that cooperation between India and China in climate change is part of a larger strategic gameplan to reduce the trust deficit between the two countries that has ballooned over the past year.

 

Realistically, do you think the overall objective of confining global temperature under 2°C can be achieved without the West actually reducing its consumption?

Lifestyles have to change; there is no doubt about it.

 

Do you think the West will be able to do that?

Emissions in the West are ‘lifestyle emissions’. By and large emissions in countries like India are ‘developmental emissions’. One should not overdo this. We also have a high emission segment in our society, but by and large India is a development emission whereas the United States and Europe are lifestyle emissions. Whether it is food habits, transportation habits or habitat, lifestyles will have to change. For example, buildings in America ten years from now will be dramatically different than the buildings of today. Smart grids for example, the use of geothermal energy for air conditioning – these are all new ideas and the innovation engine of America will undoubtedly come up with some real discontinuities which will drive down costs.

 

What shall be India’s autonomous research strategy on mitigation?

Well, this whole Himalayan glaciers episode has shown that we need to have our own scientific capacity, a scientific capacity that is networked globally and able to collaborate with the best institutions. But we need a critical mass of our own people looking at the impacts of climate change, both in terms of sectors and regions, and also designing appropriate interventions to deal with it. We should be at the cutting edge of research on coal based power generation, we should be on critical, super critical, on ultra super critical. When I was Minister for Power I launched an IGCC programme. I laid the foundation stone for India’s first 182 mw IGCC plant, integrated gasification combined cycle in Vijayawada with BHEL. I launched India’s first supercritical test facility in Trichy. These are things that we need to do. We should be at the cutting edge of research on coal based technology. Companies like Moser Baer are making big investments in solar. Reliance should be at the cutting edge of research on solar. Similarly, companies like Suzlon have to be at the cutting edge of research on wind.

So, I think we need an indigenous research capacity. We have the talent and the resources. One of the most important initiatives I have taken is to set up an Indian network for comprehensive climate change assessment. It was launched on 14 October – 127 research institutions across the country, over 250 scientists, engineers and technologists will be part of this national network. It will be like an Indian IPCC and they will provide the impetus for science and technology in this area. Technology is going to be key to adaptation and mitigation.

 

Are Indian businesses ready for what you are saying?

I think so. You talk to Jamshed Irani of the Tatas. The Tatas have told me that as corporate strategy they have decided to be carbon neutral by some particular year. Similarly, Jamshed Godrej, Yogi Deveshwar and Hari Bhartia, and other corporate leaders, see climate change as an opportunity. They have to be at the cutting edge.

 

Do you subscribe to the view that India should use tax policy to drive a fundamentally different pattern of consumption?

Fiscal policy has an important role to play, as I said, in technological behaviour. Standards will play an important role in determining what type of technologies will be used. For example, we should have mandatory fuel efficiency standards. This will automatically ensure that the transportation sector, which today accounts for only about 7-8% of greenhouse gas emissions but, the way it is growing, could by the year 2020 or 2030 account for anywhere between 15-20%. You need better auto fuel quality and you also need mandatory fuel efficiency standards. It is the standards that will determine the technology. The government should not choose technologies. It is the standards that will determine the technologies that will be adopted. So, I think there is a phenomenal business opportunity here and many businessmen, the smart ones, are already thinking ahead.

 

Do you think India can afford the western pattern of consumption?

No, I don’t think so. That will be a recipe for suicide. If for example, the Chinese are selling one million cars a month, we are selling one million cars a year. If we sell one million cars a month, we are doomed, frankly. The Chinese have in some ways decided to replicate the western pattern of a consumer society and if India were also to do it, then I think we are going to have a serious problem.

 

Aren’t the Chinese conscious of this pitfall?

I don’t know. When you have a 9% growth, you will have aspiration levels. For example, I think last year we sold one million cars, next year we are going to sell two million cars, the Chinese are doing this in one month. I think we need massive improvements in public transport, we have not invested enough; our railways sector has been consistently starved of modern technology, and frankly, if we are going to depend on private transport as the engine of growth, it will be a recipe for suicide. Of course, as aspiration levels increase, people will demand more two-wheelers and cars and so on – unless we bring about a dramatic increase in investment in public transport and the railways.

 

This means that our obsession with a 10 per cent GDP growth by itself need not have any virtue?

You can have a 9% GDP growth with public transport; they are not mutually exclusive. Public transport does not mean a 3% rate of growth. We also had lousy public transport at 3% rate of growth.

 

By 31 January 2010, reports are to be given both on mitigation action by developing countries and commitments by the other side. Are we prepared for it?

Wait and see.

 

* Interview conducted by M.K. Venu, Managing Editor, ‘The Financial Express’, on 21 January 2010, in Delhi.

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