India has reasons to be satisfied with the Paris Agreement on climate change that was finalised on Saturday night, but the inclusion of one line in the article dealing with the deal’s purpose might prove to be a big irritant in its plans to build coal-fired power plants.
That line, possibly introduced in the text with India in mind, says that one of the ways the purpose of the agreement could be achieved is by making global “finance flows consistent with a pathway towards low greenhouse gas emissions and climate resilient development”.
Observers say this line could be used by developed countries to arm-twist India on its coal plans on the grounds that it was not pursuing a low-emission pathway. They fear that by using that argument, developed nations can move to deny opportunities for India to raise money abroad.
An Indian negotiator admitted that India was not happy with the inclusion of that sentence but said it was “not the most important” provision of the agreement.
The sentence made its entry into the article in the penultimate draft that was released on Thursday night. In previous texts, it was embedded somewhere else. At that time, the language being used was that countries “should reduce international support for high-emission and maladaptive investments”. India had said that it would contest that line and have it removed.
India’s coal plans came under repeated attack from developed nations and western media during the two-week climate change conference in Paris.
While India has embarked on an ambitious renewable energy pathway, coal is likely to remain its primary source of energy for the next couple of decades at least.
In a recent projection, the government had said it hoped to bring down its dependence on coal for electricity production from the current 61 per cent to 57 per cent in the year 2031-32. But during that time, India also hopes to ramp up its total electricity generation capacity from the existing 260 GW to somewhere upwards of 800 GW.
By that year, the contribution of renewable energy — solar, wind and biogas — in total electricity generation was projected to grow to 29 per cent from the current 12 per cent.
But while there could be problems on account of coal, some other provisions in the Paris Agreement can open financial avenues for India to fund the grand Solar Alliance project.
The Solar Alliance seeks to bring sunlight-rich countries in the tropical areas to switch to solar energy in a big way. Through a massive push in demand, standardisation and R&D, it is hoped that the Solar Alliance will drive down the costs of solar power generation even further. India, which launched the alliance during the Paris conference, is hosting its administrative infrastructure.
The Paris Agreement seeks to establish a new market mechanism that will allow carbon emission reductions to be traded between countries. India stands to make financial gains by trading its avoided emissions due to the solar power plants it is setting up.
The market mechanism will allow a share of proceeds from the trade to be used for administrative expenses as well. India is planning to spend about Rs 175 crore over five years for creating infrastructure and meet recurring expenditure.