[Editorial] Green Deal for India

Why is a Green Deal needed?

  • For India, threats from climate change and pollution are not problems of the distant future. The country is right in the middle of it.
  • Super cyclones (like Amphan and Tauktae) along the eastern and southern coasts, severe droughts in Maharashtra, incessant rains and floods in Tamil Nadu and Uttarakhand and severe air pollution leading to complete lockdowns in Delhi are illustrations of this fact.
  • To make matters worse, the country is dealing with an unprecedented economic crisis– only partly caused by the pandemic.
  • Given the severity and the magnitude of the crisis, there is a need to think out of the box. There is a need to rethink the development model itself, as minor tweaks won’t yield results anymore.
  • An Indian Green Deal could help India achieve its net zero target by 2070– as committed at the COP26 in Glasgow, last year.

What could be the features of such a Green Deal?

  • The plan is to focus on sectors, some of which have a high carbon footprint, and alter its fundamentally using a 10 year plan to reduce its emissions even while generating jobs.
  • The deal would have 3 categories:
    1. Infrastructure development
    2. Care economy
    3. Green energy program
  • 10% of the GDP would be split into 3 parts:
    • 5% for infrastructure development- especially in the rural areas
    • 3% for care economy
    • 2% for green energy
  • Investment in the green energy program would have 2 components: clean renewable energy and energy efficiency.

Most probable and repeated topics of upsc prelims

How will it be financed?

  • On the question of how this 10% of GDP would be financed over the 10 year period, there are 2 ways:
    1. A global just transition package from the largest emitters
    2. Tax on the elite
  • The countries, which have currently/ cumulatively contributed more emissions than the global average, could pay for the energy transition of those countries, which have contributed much less.
  • The payment could depend on where a country lies on a global scale of emissions. Such an international carbon tax settlement process would yield $270 billion per annum for India- a little more than what is required as per the Green Deal.
  • To hold the rich in India responsible, the Green Deal can be formulated as a revenue neutral policy in which a part of the expenditure is financed using a tax hike on luxury goods, wealth and inheritance tax (these are currently either non-existent or low).
  • It would partly be financed using a carbon tax, which would help address emissions but would also be regressive. To compensate, a carbon dividend, in the form of free rations, electricity and public transport, could be incorporated into the plan.

How would it help address emissions and inequality?

  • The green energy program would reduce India’s total carbon emissions by 0.8 GT (gigatonnes) by 2030. This is compared to the projections based on STEP (Stated Policies Scenario) by the IEA (International Energy Agency).
  • The country’s energy intensity (energy use per unit of GDP) is much higher than the global average. This can be reduced through the energy efficiency component of the green energy program. This would help save 1/3rd of the energy it would have consumed in the program’s absence.
  • The finance options put the burden of adjustment on those who are primarily responsible for the current climate crisis.
  • India’s carbon emissions account for 3% of the total global emissions compared to USA’s 25%. Looking at the inequality within the country, the richest 10% emit 5 times as much as the poorest 10%. This shows gross inequality, which can be addressed using the financing model of the Green Deal.
  • These sectors have high employment creating potential. Such a Green Deal would not only help absorb those who are unemployed currently, but also create more jobs to absorb a significant proportion of those under disguised unemployment.
  • Contrasting this plan with business as usual scenario: if the amount dedicated to green energy under this plan were to be spent on fossil fuel sector, only 2.4 million jobs would be created as opposed to the 8 million jobs that would be created as per the Green Deal.
  • Contrary to common perception, the transition to green economy is a win-win proposition on fronts of both- emissions and employment.

Conclusion:

The government had promised 10% of the GDP as Aatmanirbhar package to enable recovery post-pandemic. If this amount is spent judiciously, for instance, through the Indian Green Deal, the country can come out on top of the current crisis and stay ahead of the climate change curve. The problem is with the political will, not the with the ideas. A start can be made using the upcoming Union Budget.

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