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Srinath Sridharan

Independent markets commentator. Media columnist. Board member. Corporate & Startup Advisor / Mentor. CEO coach. Strategic counsel for 25 years, with leading corporates across diverse sectors including automobile, e-commerce, advertising, consumer and financial services. Works with leaders in enabling transformation of organisations which have complexities of rapid-scale-up, talent-culture conflict, generational-change of promoters / key leadership, M&A cultural issues, issues of business scale & size. Understands & ideates on intersection of BFSI, digital, ‘contextual-finance’, consumer, mobility, GEMZ (Gig Economy, Millennials, gen Z), ESG. Well-versed with contours of governance, board-level strategic expectations, regulations & nuances across BFSI & associated stakeholder value-chain, challenges of organisational redesign and related business, culture & communication imperatives.

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Hello West: “Finance Is The Fuel For Fossil-fuel Challenge”

Financial resources and sound investments are needed to address climate change, to both reduce emissions, promote adaptation to the impacts that are already occurring, and to build resilience

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The richer nations have developed and even over-saturated any more potential development. A look at human history shows that economic development typically brings physical comfort to humans. Be it simply the gadgets in the kitchen or farms, vehicles for transportation of people, cattle and cargo, refrigerators - air conditioning -cold chains, roads - airports - etc, and offices and homes. Or be it larger science and technology that aid in development across various spheres that help societies. For decades, the developed nations have been using these what we colloquially think as - creature comforts. They now need what’s replacement-stock or upgraded versions of these infrastructuralcomforts. But with a difference. They just need to support the clean energy base.

Whereas, the other developing and poor nations don’t have these infrastructure - either in total or for many, even in part. Their aspiration to support economic development is also to improve quality of living for their citizens as well as the ability to provide these socio-civic infrastructure. This delta of growth aspiration from current low base cannot be met by currently available zero-carbon ideas. They would need conventional emissions based growth in the short term, before aspiring that they can meet the growth challenges by replacing fossil fuels with zero carbon. Unfortunately, the push toward zero has been interpreted as a full ban on fossil fuel energy. This is economically unviable, and unfair to expect for developing and poor nations.

Given all the global studies, research data, governmental negotiations - it is a accepted premise that nations need finance and latest commercially deployable technology towards climate transition and climate mitigation, and that it is important to understand the challenges of developing nations. Also many of the global minerals for clean energy are controlled by a few nations -here is another roadblock that developing countries need help with. They cannot wait endlessly for any roles by the controlling-state, or they cannot afford to pay access-premium. A covid lockdown as well as the current RussianUkraine war has shown how mighty nations have become protectionist for their domestic needs and politics. No doubt, some of them have behaved overzealously as hoarders of all things they need, just to fight their own inflationary concerns as well as appeasing to the trade & strategic partnernations they deal with.

Calling it a spade
Over the last weekend, India threw a surprise card at the developed nations. It mooted the idea that all nations should phase down all fossils fuels, and just not coal. With this, few geopolitical lines will clearly be drawn out. There would be pushback that India, until last year’s discussions, kept the entire focus was on coal alone. This new stand would upset much of the oil and gas rich nations, including its allies in the Arabian region. Indian delegation, no doubt would have arguments to counter the worries that this new pitch would make it harder to track the reduction across fossil fuel in general, and that might complicate or delay the process.

The criticism that India relies on coal power and emits 3rd largest amount of carbon dioxide will be there, for the developed nations need arguing points. With nearly 1/6th of global population, and especially younger demographics at that, India has the responsibility of driving constant social and economic growth. It cannot afford to slack in its internal efforts of growth, especially when it does not have 1/6th of world’s wealth. India has cited the latest IPCC reports to drive home the point that to meet the 1.5 or 2 degree Celsius temperature targets, the world will need phasing-down of all fossil fuels and not just phase out coal. India also called out the developed countries, for selectively ‘greening’ few energy, when it actually has no scientific basis in doing so. The basis for this has been European Parliament’s recent decision to classify some uses of gas as “green”. Can’t this be called greenwashing ? Last week, India, backed by some other countries, has also blocked the introduction of a proposal by developed nations to focus on a new mitigation work programme on the Top 20 emitters of greenhouse gases. The rationale for the Indian action is clear - that there many developing countries among the Top 20 emitters with no historical obligations to reduce their emissions. The argument for Indian action is that of these developing nation - that any new mitigation work programme must not result in the revising the Paris Agreement (climate commitments of countries have to be nationally determined).

Energy needs & sources
Currently, India sources 55 per cent of its energy needs from coal-based power. This has actually reduced with its gigantic push to renewable energy mode. India has been upfront that in keeping with its increasing energy needs, it would be forced to depend on coal as a major source of power generation for next 3-4 decades. It is also understood that new new coalbased power plants won’t be developed.

At the last year’s COP26, India had announced its - ‘ panchamrit’ strategy for going green - rather Net Zero by 2070. The strategy included sourcing 50 per cent of its energy requirements from renewables by 2030, creating 500 GW of non-fossil power generation capacity by 2030, cutting carbon emissions by 1 billion tonnes per year by the same target year and reducing the carbon intensity of its GDP by 45 per cent from 2005 levels by 2030.

There has been substantial progress in executing these target commitments. For example, the latest NEP (National Electricity Plan) aims to achieve 57% renewable capacity by 2027 and 68% by 2032. It also plans for a 24% increase in solar power production targets for 2027 compared to the previous plan.

India submitted its updated "nationally determined contributions" (NDCs) to the U.N. Framework Convention on Climate Change (UNFCC) in august this year. Under the terms of climate treaties signed by the COP nations, every country must submit its own goals for reducing emissions and explain those targets would be met, and importantly, every year the nations are expected to demonstrate progress. With India's new NDCs, it has pledged to reduce the intensity of the emissions from its national economic output by 45% by 2030, compared to its 2005 level. (The previous target was was 30%. ). In addition, India has also pledged to create a "carbon sink," to absorb the equivalent of 2.5 to 3 billion metric tons of carbon dioxide by 2030, through mass-tree planting.

Finance is the key

A report by the New York-based Asia Society Policy Institute estimated that India would need $10.1 trillion in investments to achieve its pledge of complete carbon neutrality by 2070. At the last year's COP26 in Glasgow, Prime Minister Narendra Modi sought $1 trillion in climate finance for India, to help meet its 2030 targets.

A research report, released ahead of talks on climate change finance at the COP27 summit in Egypt, commissioned by the current and previous climate summit hosts, Egypt and Britain, explains that funding is required to cut emissions, boost resilience, deal with damage from climate change and restore nature and land. It further articulates that Developing countries need to work with investors, rich countries and development banks to secure $1 trillion every year, in external financing for climate action by the end of the decade and to match that with their own funds. Isn’t this report yet another reiteration for the previous COP meets ? Developed nations have broken their promise made at COP15 - that they would contribute $100 billion annually to help developing countries decarbonise and deal with the impacts of climate change. These have not been adhered to, and all the world has is broken promises. Earlier, the UN Secretary General Antonio Guterres, in his foreword to the UN’s ‘Financing for Sustainable Development Report’, had highlighted that - “Financing for sustainable development is at a crossroads. Either we close the yawning gap between political ambition and development financing, or we will fail to deliver the Sustainable Development Goals (SDGs) by the deadline of 2030.” Poorer countries already face the brunt of climate change, but are financially helpless in doing anything about it. We cannot have climate-poor situation for nations who don’t have the means.

The developed nations have to get their promises right, and start delivering on the promised financing the developing nations’ climate actions. Merely fining the idea of fossil fuels won’t either deter the developing nations for their aspirations to have better quality life for their citizens. After all, the developed nations outsource much of their grunge work to developing nations - it helps those developed nations to claim clean and green life. At whose cost ? India has been vociferous on its views to bring to the global table, its views and concerns voiced for and on behalf of the Global South. For being one of the populous nation, it has a huge climate challenge ahead.

After all, development is a basic human right and national right. One nation cannot infringe in another’s right towards its infrastructural development. World needs green. There should be no “my green” is different from “your green”. At this point, it’s sadly green with envy and finger-pointing.

“Financial resources and sound investments are needed to address climate change, to both reduce emissions, promote adaptation to the impacts that are already occurring, and to build resilience. The benefits that flow from these investments, however, dramatically outweigh any upfront costs… Transitioning to a green economy, it found, can unlock new economic opportunities and jobs. An investment of US$1, on average, yields US$4 in benefits.”, UN notes. Instead of raking other nations over coal, can the developed nations simply put money on the table - as their commitment to global-green ?

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