Mission-mode to sustainability and growth

Now that the elections are over, it is easy to forget “green” promises made in manifestos because environmental sustainability and economic development are often considered antithetical. Here are four ideas that confront environmental risks but also aim to reduce economic costs and/or drive new opportunities for investment and growth.


Climate De-Risking Mission: Climate risks are non-linear and will increase exponentially with temperature rise. Record heatwaves, more frequent coastal floods, droughts impacting agricultural output signal the confluence of stresses of heat, water, crop loss, and degradation of fragile ecosystems. Climate risks compound economic and national security risks. As with any critical risk, we must prepare for worst-case scenarios, rather than keep fingers crossed for less damaging outcomes. A Climate De-Risking Mission should aim to reduce India’s overall climate risk by a significant margin within a decade.


First, we need to develop a climate risk atlas for India with a focus on critical vulnerabilities: coasts, urban heat stress, water stress, crop loss, and biodiversity collapse. Next, a national Climate Risk Index should be developed by mid-2020 (with annual updates and improvements in methods). Insurance companies must be involved because investments in urban and coastal infrastructure would come to nought if insurance providers did not adequately prepare for more frequent extreme weather events.


The national exercise should be complemented by state-specific indices. States must update their action plans on climate change with a deeper understanding of climate risks. To begin with, climate de-risking strategies should be drawn up at the national level and for five most vulnerable states. This would allow for the Climate Risk Index to be linked to disaster risk reduction plans under the national and state disaster management authorities.


India Emissions Trading Scheme: India demonstrated climate leadership by promoting the International Solar Alliance. But foreign investment into climate-friendly programmes in emerging economies remains limited. At a time when climate action is slowing in many advanced economies, India can cement its leadership by announcing its intention to establish an Indian Emissions Trading Scheme (IETS).


The IETS would have many benefits. It would give long-term, credible policy direction to industry and trigger innovation. Moreover, it would create derivative jobs in designing, implementing and monitoring a trusted greenhouse gas emissions trading market. It would also create a new source of government revenue while meeting specific emissions reduction targets. A pilot IETS covering a few states and major urban centres could be launched by 2022 with the aim of a nationwide IETS by 2025.


The IETS could leverage the administrative structure of India’s existing energy efficiency trading architecture (i.e. the perform, achieve and trade scheme). It would also subsume other shadow carbon markets, including for Renewable Energy Certificates, into one scheme to increase transparency and efficiency. Designed well, the IETS could have co-benefits for other schemes to promote renewable energy, electric mobility, energy storage, or climate-resilient agriculture. Once functional with robust monitoring and verification protocols, the IETS could potentially align with emissions trading schemes in other countries/regions to increase flows of international climate finance.


Plastic Hataao: In 2018, India announced its intention to eliminate single-use plastic by 2022. Mere bans will not suffice, however. There is an economic opportunity in promoting the development and commercialisation of alternatives, which should be a key part of a new green industrial policy.


Plastics pervade our lives. Technological alternatives will not emerge unless the people demand them. As communicator-in-chief, the Prime Minister should spearhead a #PlasticGhataaoPlasticHataao (#Reduce PlasticRemovePlastic) campaign.


Then come incentives to scale production and use of sustainable alternatives to plastic, which are commercially available. Venture investment, with public co-funding to partially underwrite risks, would help lab-ready alternatives to be tested in markets to reach commercial scale. Finally, targeted support — an “UnPlastic Prize” — could support R&D for alternative packaging materials, business models for recycling, and kickstarting a circular economy for plastic reuse.


National Airshed Management Authority: The recently launched document for the National Clean Air Programme outlines extensive actions, with implementing agencies identified at the national or state level. But an overarching authority is missing, which could assist, coordinate and regulate NCAP implementation. The government should establish a National Airshed Management Authority (NAMA) with statutory powers by end-2019.


A focus on airsheds is necessary to cut across urban-rural and inter-state divides and would give the NAMA the authority to coordinate with urban local bodies as well as gram panchayats. Regional interventions under the NCAP will fail without active involvement of state governments. Similarly, sectoral interventions will not succeed unless a scientific, airshed-based approach is followed. The NAMA should be given the mandate to drive action across relevant agencies and actors.


Enforcement capacity to deal with air pollution is severely lacking. The NAMA could have specific responsibility to assess and help build enforcement capacity at state level, both in numbers and in technical capability. Structured this way, the NAMA would involve government, private sector and technical/civil society representation. This would be effective only if its statutory powers were backed with real resources. Combatting air pollution could significantly lower public health costs, make our cities more liveable and attract more investment.


So long as we consider environmental action as only a cost, people, industry and government will game the system or avoid acting. Environmental externalities are no one’s responsibility until public policy makes it someone’s business. Incentives can be structured, markets can be created, individual and collective behaviour can be nudged in pursuit of environment sustainability and economic development.


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