India must shape the climate agenda

The first paradox emerged from the “fossil fuel versus coal” debate. The developed world has been pushing for a consensus among parties to adopt the 1.5°C target. Scientific assessments done by the Intergovernmental Panel on Climate Change (IPCC) show that to achieve this target, all fossil fuel use has to be reduced. But as we saw at the 27th edition of the Conference of the Parties (COP27) in Egypt this year, the developed world is fixated on the conversation around reducing coal use rather than all fossil fuels, which includes oil and natural gas. This is a bizarre contradiction where the developed world wants to push for the 1.5°C target, but does not accept that all fossil use has to be reduced simultaneously, and soon. The likely reason is that developed countries are either major consumers or major exporters of non-coal fossil fuels.

The second paradox is revealed in the “loss and damage” finance debate at COP27. It is the developed world that has been historically responsible for the climate crisis and carbon emissions, and it should financially assist developing countries in their emission-mitigation efforts. Some finance has been mobilised for this, but it is less than the minimum of $100 billion required each year. This narrative that the developed world should provide finance to support developing countries has been driving the mitigation finance discourse. In contrast, the developed world argued for the inclusion of major economies (read China and India) in the donor pool for loss and damage finance. This new position on loss and damage finance contradicts the long-held, logical and just view that it is the historical polluters who must pay for using up the world’s carbon space.

The third paradox presented itself in the inclusion of just transition (JT) and just energy transition partnership (JETP) in the final text of COP27. While these two appear similar at first glance, they couldn’t be further apart. JT is about understanding the transition needs of a country when it moves from fossil fuels to renewable energy in a bottom-up way, understanding the critical trade-offs emerging due to mitigation actions, and suggesting interventions that ensure an equitable and just transition is achieved for all. JETP, on the other hand, is an agenda driven by G7 countries that focuses on coal phase-out in the developing world. South Africa, Indonesia, and India are all coal-dependent economies that the G7 countries are focusing on for JETP. There is nothing need-driven and bottom-up about it. While JT is a welcome addition to the text, JETP can only be viewed through a lens of scepticism.

The fourth paradox emerged from the carbon markets debate. The developing world has traditionally viewed international carbon-offset markets (CDM or Clean Development Mechanism under the Kyoto Protocol) as an instrument for international climate finance. As opposed to this, the developed world primarily views it as an instrument for low-cost decarbonisation. The carbon market context under the Kyoto Protocol is different from the Paris Agreement. Developing countries had no mitigation targets under the former, while they have mitigation targets in the form of nationally determined contributions (NDCs) under the latter. (NDCs are a nation’s climate action plan to cut emissions). If India sells carbon credits to any other country to receive climate finance in return, the corresponding emission mitigation will not be reflected in India’s book of emissions accounts, thus impeding our progress towards the NDC. This desire to raise climate finance through offset carbon markets is contradicted by the need to ensure that a country’s internationally announced emission reduction targets are met.

The final paradox relates to the big question that India needs to answer for itself: How to deal with China in climate politics? It’s not a hidden fact that China is using its money power to leverage geopolitical mileage. China has made and continues to make huge investments in numerous projects abroad, especially through the Belt and Road Initiative (BRI). Its greenhouse gas emissions have risen by leaps and bounds. India’s ministers have highlighted the issue of China’s high emissions and coal usage numerous times. Research by the Council on Energy, Environment and Water (CEEW) shows China’s historical and future cumulative emissions under its 2060 net-zero target surpass that of even the United States (US) and Europe by a large margin. If any country has to join the developed world as a donor, it has to be China, given its economic strength and greenhouse gas footprint. However, Beijing sits comfortably with the G77+China grouping in the climate debate. New Delhi has to resolve the paradox of whether it should view China as a cushion that shields India from being pulled into the finance-related conversations about becoming a donor or call out China loud and clear.

2023 is the year for India’s G20 presidency. India should leverage this opportunity to further cement its position as a global climate leader and champion of the developing world. It should ensure that 2023 concludes with a global consensus on all fossil fuel phase-out and not just coal, that any JETP offer is based on its transition needs and not an imposition by G7 countries, and it should call out the disproportionate climate impact of China and its economic resources and push it to join the climate finance donor pool, including finance for loss and damage. Finally, it should view carbon markets as an opportunity to push strategic technologies such as green steel in the country.

While only future negotiations and climate actions will tell whether these five paradoxes will continue to simmer or resolve themselves, it is clear that all of these will be path-defining for the global climate agenda in 2023, and for India.

Vaibhav Chaturvedi is a Fellow at the Council on Energy, Environment and Water (CEEW), an independent, not-for-profit research institution. The views expressed are personal.