New Delhi was like the world’ climate change capital last week. The city was the centrestage for giving an impetus to the global fight against climate change with Indian business leaders playing a prominent role. The United Nations secretary-general, Ban Ki-moon, discussed climate change with a group of Indian CEOs in an early breakfast meeting. TERI organised a World CEO Forum to discuss growth and prosperity in a carbon constrained world. The European Delegation held a meeting with Indian businesses on the challenges of climate change. French businesses and industry chamber Ficci met to discuss innovative climate solutions. Cleantech Finland brought companies from the country to court Indian business. The CII-ITC Centre for Sustainable Development and Australia India Council organised talks by the chair of the Copenhagen Climate Council to discuss business leadership in climate change.
Most global CEOs, ministerial delegations, diplomats and officials from UN and multilateral institutions had descended in the capital to attend the Delhi Sustainable Development Summit 2009, but they made it a point to meet up with Indian CEOs as part of the conference as well as independent of it to explore the scope of cooperation and trade on climate related issues. Businesses are increasingly being recognised as part of the climate change solutions than the problem.
These meetings were not isolated side events, but parts of a consensus that is emerging worldwide on crafting a global green deal, which promises to be the mother of all deals. The proposed green deal seeks to galvansie the global economy by pushing for a case to channel fiscal stimuli packages or parts of it worldwide in natural infrastructure and clean technologies, thereby setting the stage for fighting the economic slowdown as well as climate change.
The initiative aims to take off from valuing and mainstreaming natural capital, formulating policies and undertaking initiatives to catalyse the switch over to a green economy, and generating clean jobs.
Prescribed as the best antidote to the two biggest challenges of all timeseconomic slowdown and climate changeby the UNEP in its Green Economy Initiative launched late last year, it has started to roll with a few governments biting the bullet. US president Barack Obama has earmarked $150-billion as part of his $825-billion economic stimulus plan to ensure his countrys energy and climate security and generate five million green jobs in the process. The plan includes having one million plug-in hybrid cars on the road with the help of tax breaks to buyers, generating 10% of electricity from renewables by 2012, and 25% by 2025, and operationalising a cap-and-trade programme to reduce 80% emission of greenhouse gases by 2050. Not everybody is impressed, though. Says Jeffrey Sachs, special adviser to the UN secretary general, “It’s yet to be seen how the deal is rolled out. Ill cross my fingers. He is not sure if its a viable strategy, given fiscal deficit in the US.”
But some country leaders, apart from the US, see a green deal as a way out of the current economic and climate turmoil. British prime minister Gordon Brown is talking about generating 100,000 new jobs, mostly through green initiatives. His plan may also include an investment of 4.5-billion in high speed rail network. Even the opposition party of Conservatives is proposing public sector funding of 600,000 for every 150,000 private investment in clean technology. Similarly, South Korea has announced an investment of $38 billion in low-carbon and climate change adaptation projects to generate 1,40,000 jobs this year and 9,60,000 new jobs in the next four years. A leader in green technologies, Japan aims to make the business segment worth $1 trillion and employ 2.2 million people before 2020.
The momentum for the green economy is building up in other quarters, too. The World Economic Forum has called for an investment of $ 515 billion per annum in clean energy over the next 20 years to fight energy and climate insecurity in its recent report, Green Investing: Towards a Clean Energy Infrastructure. The report emphasises the need to multi-task the money to fight the global financial crisis as well as create a sustainable low-carbon economy. The report points out that investment in clean energy offers better returns than in conventional economy, even including during the economic slowdown. For example, an index of the 90 clean energy majors has surpassed the worlds major stock indices to show a five-year compounded annualised return of 10%.
Country-specific initiatives are expected to pick up further next week with the launch of the Green Economy Initiatives report on the global green deal at the Global Ministerial Environment Forum in Nairobi. “The report builds a case for investing in green economy rather than brown economy. It cautions countries against throwing good money after bad money. For example, it doesn’t help in the longer run to put more money into failing car companies,” says Pavan Sukhdev, Deutsche Bank’s managing director of global markets business in India, who has been seconded to head UNEP’s Green Economy initiative.
Logging on to the green economy makes as much sense for India as for the rest of the world, if India has to take on the challenges of economic slowdown and climate change at the same time. Says Assocham president Sajjan Jindal, “India should have its own deal to create green infrastructure and jobs. It calls for budgetary allocation as well as industry participation. A green economy is going to guide market access as well as exports in the future.”
Ficci president Rajeev Chandrasekhar also sees the potential of a national green deal, but he has reservations about the countrys affordability at this stage. “Having a green deal could be an effective way to fight economic slowdown since it involves investments in projects, which create jobs. But we are fiscally too stretched to think about it. Currently, the focus is on reviving the economy and the government blueprint for the revival, including the various so-called packages, does not have anything green about it both metaphorically and really.” Indian government has announced two stimulus packages and a third is expected soon.
The green strategy for joining the global fight against slowdown and climate change may not be appealing enough for all at this stage, but the global business opportunity is. Says Naina Lal Kidwai, HSBC’s India group general manager and CEO. “Even if we don’t have our own green deal, linking up with the global green economy is an excellent business opportunity for India.” A green thrust at the national level increases Indias potential to tap into the environmental products and services worth $1.37 trillion per year. The figure is estimated to double to $2.74 trillion by 2020, according to a UNEP report. The green industry can also help India create 900,000 jobs by 2025 in the biogas segment, adds Green Jobs: Towards Decent work in a Sustainable, Low-Carbon World. It would include 3,00,000 jobs for manufacturing stoves and 6,00,000 jobs for making briquettes, pellets etc.
In fact, India has already in place a national roadmap for linking up with a global green economy. The National Action Plan on Climate Change (NAPCC) lays down policies and programmes on climate change in the larger context of pursuing the countrys development objectives. The NAPCC calls for focusing on areas like renewables, green infrastructure, sustainable agriculture and forestry. Businesses are already exploring avenues for partnership in mutual interest, as stated in the Corporate Action Plan on Climate Change. Launched last week by TERI-BCSD (business council for sustainable development), it highlights the key aspects of the business role in implementing the NAPCC.
Says BT India chairman Arun Seth, “Clarity and close co-operation are essential if the government and industry are going to deliver the right results. Businesses can play an important role by taking the initiative to develop greener solutions, but they can go much further with supportive regulation, tax breaks, incentives and alternative power.”
Empahsising upon the need to have public-private partnerships (PPP), the corporate plan underlines opportunities in undertaking research and development in next generation technologies to scale up renewables fast and make them more affordable. In the transport sector, the corporate opportunity is in undertaking efficiency improvement in current vehicle technologies and conducting research in eco-friendly vehicle technologies of tomorrow. Promotion of non-fossil fuels and deploying ICTs for efficient traffic management are also highlighted. Companies can also support biotechnology research to develop drought and salinity resistant crops and devise innovative insurance products for farmers.
The corporate plan prefers multi-stakeholder partnerships to undertake afforestation, commercial plantation in degraded forest areas and farmer-industry linkages in farm forestry. Its in favour of PPP to sustain the Himalayan ecosystem, including setting up a conservation fund with the help of a cess or corporate donations and research and development in the area of sustainable technologies for local deployment.
If the government aim to fight climate change without compromising the countrys development imperatives is understandable, so is the corporate intent to join the fight. The business case for joining the fight against climate change is driven by enlightened self-interest. Explains Yvo de Boer, executive secretary, UN Framework Convention on Climate Change, “The business role in the fight against climate change is imperative because they want clarity and predictability in government policies and plans to secure their present survival and future growth. In the process, it also helps both to fight the economic slowdown and climate change at the same time and prepare the country for an emerging low-carbon economy.”
Source: The Financial Express
Published on 12 Feb 2009