Should Developed Countries Help Pay for India's Transition to Green Energy?

India says it can’t meet its carbon-reduction pledge without help. Any takers?
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India says it can’t meet its carbon-reduction pledge without help. Any takers?
(Photo: Pictures of Money/Flickr)

(Photo: Pictures of Money/Flickr)

Recently, India became the 141st country to announce a carbon-reduction pledge in the run-up to the United Nations climate change conference beginning in late November. The South Asian giant promised to produce 40 percent of its electricity from renewable or low-carbon sources by 2030 and to limit the amount of carbon produced per unit of GDP. (Some developing countries prefer these “emissions intensity” pledges because they worry that an absolute cap could restrain economic growth.)

Here’s the rub: India said it cannot meet its target without “additional means of implementation to be provided by developed country parties.”

There are numerous ways to interpret this diplomat-speak. Several major newspapers inside and outside of India went with the least charitable take. “India Asks Rich Countries to Help Fund Environmentally Friendly Development,” said the Wall Street Journal. India “Asks Rich Nations to Cooperate,” wrote the Times of India. These headlines imply that India is going from country to country begging for money, hat in hand.

Besides the massive funding shortfall, the other factor underlying India’s demand for global support is the country’s belief that the developed world, and not India, is responsible for the current climate crisis.

Here’s the more nuanced, and troubling, interpretation: India was reminding developed countries that they are failing miserably at meeting the financial commitment they promised to help smooth the global transition to a green economy.

In 2010, the participating nations in the U.N. Framework Convention on Climate Change established the Green Climate Fund, or GCF, a pot of money that would be doled out to developing countries to fund, through grants or loans, specific projects aimed at addressing climate change. The plan was for developed nations to contribute enough money to distribute $100 billion per year by 2020 to poorer countries in order to help develop their low- or zero-carbon infrastructure.

Throwing out huge numbers like $100 billion is easy, but it’s much harder to actually write the checks. So far, the world’s leading nations have fallen short. So short, in fact, that the GCF was forced to celebrate hitting the $10 billion mark last December. To put this “accomplishment” in perspective, it took the GCF four years to raise one-tenth of the funds it soon intends to disburse every year. Let’s leave the cork in the champagne bottle for now.

“India didn’t propose the $100 billion target—the international community thought this amount should be available,” says Sameer Kwatra, India energy and climate policy analyst at the Natural Resources Defense Council. “India is saying, ‘You made that commitment, how about fulfilling it?’” (To be fair, Germany did step up this week when Chancellor Angela Merkel pledged $2.25 billion to help India meet its renewable energy targets.)

Besides the massive funding shortfall, the other factor underlying India’s demand for global support is the country’s belief that the developed world, and not India, is responsible for the current climate crisis. This was a running theme of its announcement, which also insisted that “though India is not part of the problem, it wants to be part of the solution.”

In some ways, this is a fair point. Cumulative emissions are what count, and the country is responsible for less than three percent of the carbon dioxide emitted up until now. Its current per capita greenhouse gas emissions are also small: The average Indian is responsible for 1.7 metric tons of carbon dioxide emissions per year, placing it in the bottom half of world rankings, alongside countries like Belize and Albania.

India’s leaders sometimes overstate this argument, though. The country is now a major—and growing—emitter. It currently produces more than six percent of global greenhouse gas emissions, placing it third globally (fourth of you take the European Union as a single unit). The trends are even more worrying. In 2013, India accounted for 15 percent of the global increase in carbon dioxide emissions. Even if you believe India isn’t part of the problem today, it’s going to be a large part of the problem tomorrow.

Nevertheless, the nation is still on relatively solid footing when it tells the developed world: You made this mess, now you pay to clean it up. “When India says they need funds,” says Kwatra, “it’s from an equity point of view.”

Even taking into account unfulfilled promises and simple fairness, India will soon face some hard questions. By the time most of its newly announced climate commitments come due in 2030, India will likely be the world’s third-largest economy. It will be larger than Japan, Germany, the United Kingdom, and France, all of which are donor countries to the Green Climate Fund rather than beneficiaries.

Today, India is still entitled to consider itself in need of assistance. The country has more people living in extreme poverty than any nation on Earth. But things are changing fast. Among countries having large populations of poor people, India’s poverty rate is comparatively low, and getting lower.

China provides a useful analogue. The U.N. climate change convention divided up countries by economic status way back in 1992, when China was indisputably a developing country. That means China is technically entitled to withdraw from the GCF. Recognizing the problems with this scenario, the country instead announced in September that it will offer financial assistance to less-developed economies through bilateral agreements. India will likewise one day be in a position to move from beneficiary to donor.

The challenge will be figuring out when that day has arrived and determining what India’s role will be in helping other countries to navigate the path from extreme poverty to prosperity. As the meager contributions to the GCF demonstrate, it’s difficult to address climate change when 80 percent of the global population lives on less than $10 per day.

This post originally appeared on Earthwire as “Putting the 'Green' in Green Energy” and is re-published here under a Creative Commons license.