India-US Climate Cooperation- Reading the Tea Leaves

Dr. Raj V. Rajan

Dr. Raj V. Rajan

Dr. Raj V. Rajan serves on the Board of Directors of non-profits Climate Generation, Fresh Energy, and Environmental Initiative and is a Fellow of the Institute on the Environment, University of Minnesota. Views expressed are his own.

In his opening COP21 comments in Paris, former President Obama noted that “the USA not only recognizes our role in creating this problem, we embrace our responsibility to do something about it.”

Of course, he got labeled the apologizer-in-chief for this and other historically accurate statements that got into ‘why the US should lead efforts to mitigate climate change’. Fast forward to yesterday, when President Biden addressed the Leaders Summit on Climate that he hosted virtually. The eternal political pragmatist, President Biden began his comments with “When people talk about climate, I think jobs.  Within our climate response lies an extraordinary engine of job creation and economic opportunity ready to be fired up.” He is past the point of asking or answering the ‘Why?’. Instead, he immediately went to the ‘What,’ particularly what it means to the average American.

Indian Prime Minister Modi’s opening COP21 remarks in Paris included- “It is not just a question of historical responsibility, they [developed countries] also have the most room to make the cuts and make the strongest impact. And climate justice demands that with the little carbon space we still have, developing countries have enough room to grow”. Contrary to being the “it’s your fault” stance, this sounded like a reasonable “let’s look at the current situation” stance.  While high-income countries still own about half of the historic responsibility for cumulative GHG emissions, medium and low-income countries are projected to bear the brunt of most of climate change’s adverse impacts.

Fast forward to this week. At the Climate Summit, Prime Minister Modi said, “We in India are doing our part… As a climate-responsible developing country, India welcomes partners to create templates of sustainable development in India. These can also help other developing countries, who need affordable access to green finance and clean technologies.” And then he announced the India-US Climate and Clean Energy Agenda 2030 Partnership.

President Biden announced a new target for the US to achieve a 50-52 percent reduction in economy-wide carbon emissions from 2005 levels by 2030, expected to translate to a formal Nationally Determined Contributions (NDC) commitment at COP26 this November in Glasgow. Meanwhile, India appears to be on track to meeting its formal NDC of 33-35% reduction in economy-wide carbon intensity from 2005-2030, normalized to GDP. And achieve non-fossil power generation capacity of 40% by 2030. India’s current NDCs are one of only six national targets rated as ‘2°C compatible’, while the US’ NDC under the 2015 Paris Agreement [26-28% below 2005 levels by 2025] is rated as ‘critically insufficient’ and more in line with a +4°C world. As a result of COVID-19 [and primarily because of that], the US appears to be on track to meeting this ‘critically insufficient’ NDC target! Much will depend on how we invest in the COVID recovery plan.

The politics of numbers are always interesting. Moving the baseline year to 2005 makes US 2030 targets look more ambitious than EU 2030 targets [52% -vs- 51%]. If we go back to the 1990 baseline from the Kyoto Protocol, the same EU 2030 targets look more aggressive [43% -vs- 55%]. We can already hear the push-back from across the aisle in the US: “Why should we be more aggressive than the EU? We will lose competitive advantage.” Hence the importance of President Biden framing all of this in the “jobs” context.

Since Kyoto, we have heard the constant drumbeat of “What about India and China?” from mainstream media and from climate experts and negotiating officials in all US administrations. And we will continue to do so, as India’s current targets are much more modest than the revised US targets. Yes, they are. And rightfully so. After all, nature and the Earth do not care about 2005 or 1990 baselines. What matters is cumulative net carbon emissions from all human activity- industrial, agricultural, deforestation and all else. There, the US still leads the pack and still holds over 25% of the bag, followed by the EU at around 20%. Yes, a billion more privileged humans still own half the climate change bag. And India, with about 1.4 billion people, still owns less than 3% of it. And before someone takes off on China’s current cumulative share of around 13%, let’s not forget that a lot of this came from the offshoring of carbon-intensive manufacturing from the US and Europe. India and China continue to have consumption-based emissions less than production-based territorial emissions, while the US and Europe have just the opposite. Bottom line, we in the West still own a big chunk of China’s emissions, thanks to the Walmarts and Amazons of the world.

It does not help if we continue to downplay our role in being part of the problem. Yesterday, President Biden made it a point to say: “But the truth is, America represents less than 15 percent of the world’s emissions.” Thankfully, he also included this: “I see the potential for a more prosperous and equitable future.” Let us hope that this equity extends to humans beyond our national borders.

A lot will depend on the details buried in the India-US Climate and Clean Energy Agenda 2030 Partnership and the broader U.S. International Climate Finance Plan. By 2024, the US intends to double annual public climate finance to developing countries, relative to the average level during the second half of the Obama-Biden Administration (FY 2013-2016). The OECD reported that public climate financing from developed to developing countries was steadily rising during the same period, averaging around $50 Bn/yr globally. To put this in context, this was about the same amount of US foreign aid in 2016 [including military].

So, let’s assume this goes to $100 Bn/Yr- a very good start. For another context, US-India two-way trade in goods and services in 2019 was $146 Bn, with a $29 Bn deficit in India’s favor [$87 Bn import from and $59 Bn export to India]. It should be noted that unlike foreign aid, over 90% of the multilateral climate financing was in the form of loans, not grants. Unless this changes, one can already see a new breed of debtor nations, carrying climate debt that future generations in low and middle-income countries will have to pay back to international financing organizations.

Organizations specifically identified to implement the proposed international climate strategy include the U.S. Agency for International Development (USAID), U.S. International Development Finance Corporation (DFC), Millennium Challenge Corporation (MCC), the Export-Import Bank of the United States (EXIM), and Multilateral Development Banks (MDBs). Again, details are what will matter. For example, despite its 60-year humanitarian track record, the USAID has been criticized for aligning its food aid shipments more with the size of US crops and less with recipient needs.

One has to wonder what strings will be attached to the climate financing and aid efforts. Will US nuclear power technology [which has very little traction right here at home] regain momentum following the 2005 nuclear handshake between President Bush and PM Manmohan Singh? While this might be in the interests of US companies, is this the right thing for India? Radiation, tsunamis [think Fukushima], and lack of emergency response infrastructure [think Bhopal] aside, keep in mind that nuclear power might be carbon-free, but is not cooling-water free. Water is a shrinking precious resource in India, which has seen many thermoelectric plants cease operations due to lack of cooling water. Do centralized and large power plants even make sense, considering the scale of transmission infrastructure in densely populated India, or is leapfrogging to distributed generation the right solution [like they did with cell phones]?

There is no question that India needs to do what it can to move away from fossil fuels. To improve air quality and water availability, while also delivering on the added benefit of mitigating climate change. The same goes for China. But historic emission imbalances and ongoing embedded-carbon trade imbalances mean that a significant chunk of this should be funded by western taxpayers and consumers, directly or indirectly. Question is, will this be done keeping the recipients’ interests primary, or will we just create a new crop of debtor nations and a new generation of dependencies?

Related posts