Here's How India Can Become a More Prosperous, Green Economy

NEW DELHI -- The offer-and-negotiate approach to climate change on display in Paris created a glacial pace of progress that might make the world incapable of stemming the onset of abrupt climate change by the end of this century.
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A goat herder walks as wind turbines manufactured by Gamesa Corp. stand at the Bharat Light & Power Ltd. Amberi wind farms in Rewalkawadi, Maharashtra, India, on Tuesday, Sept. 9, 2014. Prime Minister Narendra Modi's government in July restored a wind-farm tax benefit, which could propel wind installations to a three-year high of 2,600 megawatts in 2014, according to Bloomberg New Energy Finance. Photographer: Dhiraj Singh/Bloomberg via Getty Images
A goat herder walks as wind turbines manufactured by Gamesa Corp. stand at the Bharat Light & Power Ltd. Amberi wind farms in Rewalkawadi, Maharashtra, India, on Tuesday, Sept. 9, 2014. Prime Minister Narendra Modi's government in July restored a wind-farm tax benefit, which could propel wind installations to a three-year high of 2,600 megawatts in 2014, according to Bloomberg New Energy Finance. Photographer: Dhiraj Singh/Bloomberg via Getty Images

NEW DELHI -- Six years ago the Copenhagen climate conference ended without an agreement in the midst of unprecedented acrimony. In December, the Paris conference ended in a robust agreement. The contrast between the two outcomes underlines how, as temperatures have risen and extreme weather events have followed each other in rapid succession, awareness of the threat posed by relentless global warming has grown among the policymakers of the world.

In retrospect, the lion's share of the credit for the agreement must go to President Obama. When he descended on the Copenhagen summit during its last days, he reportedly burst into a meeting being held by South Africa, Brazil, China and India, and struck a separate deal that allowed countries to set their own targets for emissions reduction in exchange for offers of financial help. He was severely criticized in Europe for having buried the Kyoto Protocol after having failed to get the U.S. Senate to pass the Waxman-Markey bill. Hindsight shows, however, that by acknowledging the sovereign right of nations to determine their own pace of emissions reduction, Obama opened the way to genuine cooperation.

But the price of doing so has been the glacial pace of progress. It has taken six years to get an agreement; it will take two more for countries to convert their commitments into programs of action, and another two to set up the system of international monitoring. The offer-and-negotiate approach to climate change on display in Paris created such a slow pace of progress that it might be impossible to stem the onset of abrupt climate change by the end of this century. Even if the signatories meet the targets they have set for 2025 and 2030, the world will still warm by 2.7 to 3 degrees Celsius. A 2.7 degree (average) rise will impact the Arctic region in much more dynamic ways than the rest of the Earth, warming it faster. Long before this happens the Arctic Ocean will become entirely free of summer ice and a huge expanse of dark water will be exposed that will absorb the sun's heat instead of reflecting it back into space. This contributes to even faster global warming and even higher sea level rise across the globe.

ice glacier melt

An iceberg in Lake Argentino in Patagonia. (Mario Tama/Getty Images)

The United Nations calculated that to have a reasonable chance of meeting the 2 C target the world had to limit the addition of CO2 to the atmosphere to 1,000 gigatons by 2100. But even if the Paris commitments are met -- and that is quite a big if -- the world will still have added around 723 gigatons of CO2 by 2030. To stay within the 1,000 gigaton limit, therefore, it will have to bring down annual CO2 emissions from 40 gigatons a year to zero in 14 years. This is manifestly impossible.

The governments of the world know this, so if there is a single unambiguous message to take away from Paris, it is that the agreement reached there is only a beginning, not an end. Each future climate conference will be forced to elicit more and more stringent commitments to cut emissions from its members, install more and more intrusive monitoring and set stiffer and stiffer penalties for non-compliance.

climate paris co2 emissions graph

History and projection of carbon dioxide emissions. Chart courtesy of ClimateParis.org.

But New Delhi does not seem to have gotten the message. In the closing stages of the conference Prakash Javadekar, India's minister for the environment, expressed his satisfaction that "India has been able to secure its interest in the agreement." After the conference ended Prime Minister Narendra Modi claimed, with obvious relief, that "climate justice has won." And days later India's minister for coal and power, Piyush Goyal, reiterated that India intended to double its coal output by 2020. It is hardly surprising that India came to be regarded as a spoiler in the conference.

India should not have been in the dock alone. Even if it meets its commitments, China's emissions will be around 13.6 gigatons in 2030. It alone will therefore preempt 80 percent of the absorptive capacity of the Earth's natural sinks. Beijing added 60 gigawatts of coal-fired power generating capacity in 2015 and gave environmental clearances to 155 more coal plants in the first nine months of the year alone.

coal plant smoke

Smoke billows from a coal-fired power plant in Shanxi, China. (Kevin Frayer/Getty Images)

But the reason why India is far more likely to be singled out for criticism is that the world knows that most of these Chinese plants will never see the light of day. Thanks to a fiscal stimulus program run amok, China has several hundred power plants that it does not need, and has no option but to phase out older plants to bring them into use. On the other hand, China also plans to set up 110 nuclear power plants by 2030 and has huge excess capacity in its solar panel industry, some of which is bound to get absorbed in its plans to cap its emissions in 2030.

India, by contrast, is desperately short of energy. It went to Paris determined to protect its right to increase its coal capacity from 170,000 MW to about 450,000 MW by around 2030. It does plan to increase the share of renewable energy from 12 to 35 percent of installed capacity. But this will bring down its dependence on coal for power generation only from 61 to 57 percent. Finally, in sharp contrast to China, it has not set any date for capping its CO2 emissions and, with coal dependency that high, will still have a long, long way to go. The unease that the world is beginning to feel over India's future plans is therefore understandable.

India's intransigence does not, however, come from selfishness or prickly sovereignty. The real reason is that its policymakers really remain deeply mired in the belief that there are no alternatives to fossil fuels, and they do not know which way to turn. Modi has already committed India to setting up 100,000 MW of solar power plants by 2022. This figure will doubtless be trebled by 2030. But at present all the plants being built or planned are photovoltaic, so they will be able to generate power for only 1,600 to 1,800 hours a year, or five hours a day.

solar thermal

The three towers at the Ivanpah Solar Electric Generating System in the Mojave Desert in California. (Ethan Miller/Getty Images)

However if the new facilities are a different type -- concentrated solar thermal plants -- they will be able to generate power for 6,500 to 7,000 hours a year. Since the average capacity utilization of coal-based plants in India is currently 5,700 hours, this one decision can replace 200,000 MW of coal-based power plants with solar thermal plants, halve the future growth of emissions and allow India to set a date for capping its emissions.

Solar thermal power stations are able to do so by adding extra heliostats and storing the sun's energy in molten salt. Power plants already in operation in Spain and the Mojave desert in the U.S. are doing this for up to 15 hours a day. Although they cost more than solar PV plants to set up, they also generate more electricity, so their cost of generation is about the same. The Moroccan government is setting up a 580 MW solar thermal plant at Ouarzazate, whose cost of generation is estimated to be 7 cents a unit. This is exactly the price at which the Andhra Pradesh government has signed an agreement with the U.S. firm SunEdison for a 500 MW solar PV plant in Andhra.

But although there are now scores of operational solar thermal plants in the world, not even one of them is in India. Five years ago private and state-owned utilities had planned to set up more than 500 MW of solar thermal generating capacity in the country. But one by one all of them backed away, until there was a single demonstration plant of 50 MW left.

The reason is India's cripplingly high interest rates. An investor who raises money at 12 percent a year cannot afford to make a mistake that will delay his project, let alone destroy his investment, for the risk he runs is four times greater. This is something the government seems not to have taken into account.

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