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In India, A Reality Check

by Michael Levi
October 26, 2010

When I visited India in January, I came away deeply uncomfortable about any international climate change effort that pushes India to do more than what is already in its self-interest. On my visit last week, I spend my last two days in several rural villages, where a household income of ten dollars a day makes you rich, and wandering around Calcutta, which has largely missed the “New India” that you see in the office towers of Mumbai and Bangalore. Those two days only reinforced my earlier sense. India is simply too poor, and too ridden with other immediate problems, to be asked to make climate change a priority.

This does not mean that India should do nothing on climate. There is much that it can do that lines up with its other priorities. Energy efficiency, in particular, can help India meet its needs while avoiding expensive capital investment in new generation. Subsidy reform, done carefully, can encourage conservation while not slighting the poor. Natural gas, boosted by recent domestic discoveries, can displace coal while lowering emissions if the market is allowed to function properly.

But even insisting that India capture the win-wins can go too far. India has a massive governance deficit. Many opportunities that look like they can save money while cutting emissions require significant government effort. (Subsidy reform is an example.) Yet there is a limited amount of government capacity to go around. As a result, sometimes capturing what looks like low-hanging fruit is actually quite costly, because of the associated price in terms of diverted government attention.

Of course it isn’t as if all Indian government money is well spent. The government of Tamil Nadu, for example, is in the process of handing out free color televisions to pretty much every person in the state, essentially in order to buy their votes. That money would be better spent supporting clean energy (or an any host of other things). But somehow I suspect that if India was pushed to spend more on clean energy, the money wouldn’t come out of the free TV budget.

Moreover, unlike in the case of China, we can afford to be a bit lax with India in the near term. Emissions in India, and other countries at similar income levels, are simply not large enough to make or break a global effort in the near term. Nor is India poised to grab U.S. heavy manufacturing jobs – though once again, that might change in the near future.

India is fundamentally different from China – and our climate policy needs to account for that. U.S. and European experts and policymakers who don’t see that should spend some time there – not in the office buildings of the few cities that are zooming ahead, but everywhere else.

Post a Comment 3 Comments

  • Posted by Andrew

    Michael –

    It seems like countries like India have a real chance to get out from under the destructive model of growth, precisely because they’re so poor and ill-run. Take electricity, for example. I’ll be willing to bet that the villages you visited were either not electrified, or very poorly served by a far-off utility that was unable to effectively meter and charge for use (due to corruption or mismanagement). Wouldn’t they be better served by local, distributed solar power?

    Also – maybe you’re right that we shouldn’t ask the Indians to do anything expensive in climate negotiations. But, US and European negotiators should be doing everything they can to convince the Indians that they are “fundamentally different from China”. However, India is acting as China’s closest ally in the negotiations. By placing themselves as part of this BASIC bloc, they are giving cover to heavily polluting China. Maybe a way would be to promote technology distribution in India, but not in China.

    [ML: Re #1: If the villages are better served by solar power, than they should be served by solar power. But if they aren’t, they shouldn’t. The right answer will depend on their precise conditions. It really does depend on the village — the cost of central generation (not including connection costs, which is what can tip the balance) is generally much lower than the cost of distributed right now. Re #2: I agree wholeheartedly. Look out for an essay on that theme in the next month or so.]

  • Posted by soumyabrata

    The fundamental question remains that with nearly 40% of india having no access to electricity and India having the highest number of poor in the world, what would be the cost in terms of equitable developement for moving to renewable sources of energy for electrification. the question of who and where the marginal cost of electricity (renewable) is going to come from needs a lot of thought as well.
    Even with such a scenario there is clearly a big push towards low carbon development, whether it be that 15% of electricity consumption should be from RE by 2020 or the minimum energy performance standards for appliances.

  • Posted by H-bomb

    Type your comment in here…Michael, if what you say makes sense ( and I think it does), why should the US be so dead set on pushing India to buy large, expensive power reactors asap?

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