The Decarbonization Tapestry
Climate matters. It doesn’t rain in this part of Southern India in March, letting crops be brought in. Rather it didn’t rain before. This year a “freak” depression over the Indian Ocean gave South India unprecedentedly early rains — heavy enough to wash out roads, and prevent farmers from harvesting much of their rice. A sober reminder that humans — agriculture in particular — can adjust to different kinds of climate, but not to ever changing climate.
India has no substantial climate change denial movement — partly because of such acute reminders of climate vulnerability, but also because India imports most of its oil and gas, and so, coal excepted, acts as a powerful domestic economic lobby for fossil fuel dependence.
Last week India showcased its recent role as a climate leader by hosting in Delhi the Summit of the International Solar Alliance, an Indo-Franco partnership of tropical nations working to accelerate their harvest of abundant solar resources. The center-piece of the event was the joint inauguration by Indian Prime Minister Narendra Modi and French President Macron of India’s largest solar project, in Mirzapur.
But while renewable energy is the show-case of accelerating climate progress, a few days here reminds me of just how complex — but potentially rewarding — the replacement of fossil fuel low-carbon alternatives can be. Decarbonization requires economies to create an entire tapestry of innovation — including threads that at first glance don’t appear to be, but are, climate vital.
For example, climate change would seem unrelated to Nirav Modi, a billionaire jeweler charged with swindling India’s state owned banks out of $2 billion. But in the wake of the fraud India’s banking authorities felt compelled to make it much more difficult for banks to guarantee loans to any borrower, threatening a significant credit squeeze here.
Since wind and solar projects are very capital intensive, the ease of obtaining credit is vital to the cost and pace of their deployment — so the Nirav Modi scandal could impede climate progress in one of the world’s major renewable energy leaders. Fortunately, the International Solar Alliance has crafted a response. To ensure the flow of investment to solar projects in developing countries burdened with banking, currency or political risks, ISA is creating an innovative platform, the Common-Risk Mechanism, bundling solar projects together to secure low cost insurance for such country risks. Clean energy is not just, and maybe not primarily, a matter of engineering innovation — it also takes financial pioneering.
Climate progress is also dependent on the revitalization of India’s troubled railroad system, whose share of freight traffic has fallen from 89% to 32%. India needs to get back to the 50% rail-share of current leaders like the US and China to avoid over-reliance on trucking fueled by expensive, polluting and imported diesel. This will require doubling the current average freight rail speed, from 15 mpg today to 30 mpg. That’s not possible as long as 40% of Indian rail segments operate at more than 100% of capacity loads just sit waiting for space on the rails. So, it’s an economic, as well as a climate imperative, for India to get on with building its planned new rail capacity.
Farm policy is climate critical as well. This year’s national budget, driven by the evident discontent of rural voters, focused on the needs of India’s villages. The country has been trying to streamline its fertilizer subsidies, 1% of total GDP, much of which end up being diverted from intended smallholder recipients. Worse, particularly large subsidies for nitrogen fertilizer have led farmers to overuse nitrogen with insufficient phosphate and potassium — and causing a substantial increase in greenhouse gas emissions from agriculture, as well as diminished crop yields.
Efforts to reform this system with sophisticated data tools, however, have thus far proven both technically and politically premature. While such mechanisms have cut the projected expenditure by 7%, the bulk enormous agricultural and climate benefits of dramatic fertilizer subsidy reform are still waiting to be plucked.
Rural households also play an underappreciated role in India’ s enormous air pollution problems. Forced to cook to wood, charcoal or cow dung, the kitchens of India’s poor are responsible for the largest single share of both indoor and outdoor air pollution, causing hundreds of thousands of deaths each year.
Middle class Indians cook on LPG. The government has launched a massive program to enable the poor to use this cleaner — if fossil — cooking fuel. Millions of the poor have partial access to subsidized LPG — but supply chain failures leave much of the intended job undone. And the climate nexus? The black carbon — soot — from biomass cooking which kills so many is also a particular warming threat to the vast Himalayan glacier system that some have called “the third pole.” Modernizing cooking for the poor turns out to be one of the biggest favors India could perform to stabilize the global climate.
So, climate progress here — or in the other large, complex and rapidly growing economies of the Global South — is complex, because tapestries are — no one color of thread can create the pattern. But, like a tapestry, the diversity of a low-carbon economic fabric is not only climate friendly, but enhances energy security, eliminates health risks, and modernizes entire economies. It’s hard work, but profitable and worth it!