Can India & China see the future warming?

• The Reference Scenario, which shows the trends in surging energy consumption and carbon dioxide policies

• The Alternative Policy Scenario, which shows how policies are driven by concern for energy environment but not yet adapted to curb energy demand.

• The High Growth Scenario, analysing what would happen to energy use if current high growth for India and China persists throughout the projection period.

The broad conclusion is that, in relation to the reference scenario, world energy needs could be 50 per cent higher in 2030 than today and China and India would together account for 45 per cent of the increase. Fossil fuels will continue to dominate that fuel mix. The challenge “for all countries is to seek a transition to a more secure, lower carbon energy system without undermining development.” Nowhere is this challenge tougher or of greater importance than India and China.

From India’s point of view, several steps are critical. First, are we doing enough to improve energy efficiency? Merely enacting legislation on energy conservation with a weak enforcement mechanism is grossly inadequate. The way forward is to improve systems of lighting, the architecture of buildings, and make the use of energy-saving devices obligatory.

But who is in charge? The Prime Minister’s Council on Climate Change is an advisory body, but enforcement issues relate to state governments, corporates, and other entities. Redefining accountability in a meaningful way is inescapable.

Second, while corporates have progressively increased research & development on alternative fuels, a more coherent policy framework is necessary to incentivise both public and private investment in nascent technology. This is necessary if bio-fuel and ethanol are not to be promoted to the detriment of food security.

There are other areas that need more imaginative choice. For instance, the report of the Environment Protection Control Authority to the Supreme Court on increase in the number of diesel vehicles in Delhi, which emit three times more respirable suspended particulate matter and nitrogen oxides is of concern.

Consumers prefer diesel vehicles encouraged by the huge diesel subsidy. As more gas is being discovered, it is necessary to accord higher priority on fuel use to meet the needs of the transport, fertiliser and rural cooking. Transport, because pollution has health consequences, particularly in towns and cities; fertilisers, because gas is more energy-efficient than naphtha; rural cooking, because the use of wood and animal waste for fuel is a major contributor to pollution.

Hopefully, the Supreme Court will make it obligatory for the transport sector to increasingly use CNG.

Third, if the market economics is to work for encouraging renewable fuels the distortionary subsidy regime on fossil fuel must be phased out. India is a case of huge under-recoveries from the sale of petroleum products, estimated at Rs 1,00,000 crore on the ground of sparing consumers the burden of what is falsely believed to be a mere transitional rise in global fuel prices. The truth is that the world has moved to a higher threshold on fuel prices and shielding consumers only encourages distortionary economic activities that are energy intensive and not sustainable in the long run. Coalition governments are more sensitive to election cycles. But in a country where election takes place round the year, every year, sensible economic policies cannot be put on hold forever.

Fourth, the argument circumscribing international obligations on the ground that our per capita emissions of greenhouse gases is only 1.2 tons of carbon dioxide as against the US’s 20 tonnes, or that we, as 17 per cent of the world population, contribute just four per cent to global emission, is only valid up to a point.

Certainly, developed countries have a deeper obligation to undo the damage. But India and China will be the major contributors to the “flow of pollutant material” between now and 2030. The case for a differential and differentiated obligation is rational and understandable. It would, however, be difficult to morally sustain the case for total exemption.

The World Energy Outlook 2007 report rings an alarm, as does the report of the Intergovermental Panel on Climate Change. We owe it to ourselves, and to our future generations, to act with appropriateness and responsibility.