Why a clearer ‘green industrial policy’ matters for India: Reconciling growth,climate change and inequality

Viewpoint

Debates on the impact and responses to climate change in the Indian context have been an emerging area of interest in the past decade (Jakobsen, 1998; Jasanoff, 1993; Kandlikar and Sagar, 1999; Rajamani, 2009; Rajan, 1997). Testament to this are also a series of policy commitments put forward by the Indian government recently, e.g. in 2012, an ambitious target of increasing the share of renewable energy in the electricity mix to 15% by 2020 was announced (Ganesan et al., 2014; PIB, 2012); towards the end of 2015, a commitment to secure 40% of its electricity from renewable and other low-carbon sources by 2030 (Guardian, 2015).

Consequently, a range of research has been carried out in the Indian context including, for instance, work on quantification of emissions across different states (see for example, Ramachandra and Shwetmala, 2012), modelling of future urban growth scenarios in select Indian cities (Pathirana et al., 2014), and even an exploration of the role of traditional knowledge in engaging with changes to the climate system and how/whether capacities for adaptation are enhanced (Pareek and Trivedi, 2011; Rana et al., 2013). Research on climate change in India has also been undertaken using the lens of adaptation, ¹ where for instance, work carried out includes an understanding of how actors and institutional frameworks in the local area shape the capacities of individuals/communities to adapt (Banerjee et al., 2013).

What many of these studies point to is that climate change is not merely to be viewed as a distinct phenomenon but something that is intrinsically linked to and shaping the growth trajectories in the Indian economy. At the same time, the links between climate change and economic growth also needs to accommodate the Indian Government’s efforts ² to alleviate both urban and rural poverty. However, at the moment, these are isolated attempts, and there is no clear direction as to how the impacts of climate change need to be effectively tied in with pro-poor strategies. This has led some to explore what shapes climate policy in India and what the key drivers and barriers might be (Atteridge et al., 2012). Such lines of inquiry prompt us to ask whether answers to promoting growth and reducing inequalities lie in pursuing a ‘green industrial policy’ that can reconcile tensions between people-environment interactions.

Clearly, the health of the manufacturing sector and access to affordable and sustainable energy sources has been cited as key to ensuring that India’s economy can grow at pre-2010 rates of 8 percent in terms of overall GDP (Ganesan et al., 2014; World Bank, 2011). This has resulted in what Ganesan et al. (2014) refer to as ‘India’s Green Industrial Policy’, which translates into “a mix of steps taken to address market failures in promoting green/clean energy technologies and solutions, and other, more classical policies to promote industrial development in India” (p. 7). Some of the strategies that loosely make up India’s Green Industrial Policy include the Jawaharlal Nehru National Solar Mission, ³ the National Mission for Enhanced Energy Efficiency, ⁴ the National Clean Energy Fund ⁵ and the Solar Cities Development Programme ⁶ (Rodrik, 2013).

However, the extent to which India can pursue some notion of a ‘green industrial policy’ depends on two factors. Firstly, it is shaped by how India adheres to global conventions ⁷ on climate change and how/whether it sees this as contradictory to its own notion of ‘growth’. As an important global institution, the Intergovernmental Panel on Climate Change (IPCC) was established in 1988 by the World Meteorological Organisation and the United Nations Environment Programme (UNEP). The IPCC not only brings together experts from around the world but is also influential in shaping global frameworks such as the 1997 Kyoto Protocol (Agarwala, 1998a, 1998b; Biermann, 2001). Developing countries such as India have been reluctant to adopt ‘national emissions’ ⁸ as the overall framework in global conventions and instead want to adopt a ‘per capita emissions’ ⁹ as the basis for responding to climate change while at the same time requiring developed countries need to reduce emissions first (Thaker and Leiserowitz, 2014). Consequently, although the United Nations Framework Convention on Climate Change (UNFCCC ¹⁰ ) and the Kyoto Protocol were ratified by India in 1993 and 2002, respectively, Walsh et al. (2011) argue that it was only after 2008 with the publication of the National Action Plan on Climate Change (NAPCC) and later in the 2009 Copenhagen Accord that India ¹¹ made commitments to reduce greenhouse gas emissions. ¹²

Secondly, it depends on how and whether both urban and rural areas are brought under the gamut of a common ‘green industrial policy’. At the moment, it is argued that Indian cities need to be at the heart of adaptation and mitigation strategies (Ravi, 2008). However, the range of impact studies carried out in rural areas do not attempt to link up with the challenges in urban areas. ¹³ And thirdly, public perceptions on the nature of ‘green industrial policy’ needs to be pursued. This strand can build on existing work carried out in this area, for instance, study by Leiserowitz and Thaker (2011) reveal key themes captured in a survey carried out to understand public perceptions of climate change: (a) observations of local environmental change (e.g. if there were changes to rainfall patterns in local area and how it might affect the local economy); (b) climate vulnerability and resilience (e.g. impact of severe drought or floods on people’s livelihoods); (c) global warming awareness and beliefs (e.g. role of human action in altering the climate system); (d) trusts in different messengers (e.g. who were trusted with knowledge on climate change); (e) support for climate and energy policies (e.g. what did people think the government should do).

Having said that, pursuing a ‘green industrial policy’ needs to be treated with caution. This is because as Rodrik (2013) argues, any industrial policy (including a ‘green’ one) has two shortcomings: firstly, governments rarely have full information to make right decisions and which sectors of the economy to invest in; secondly, once an industrial policy starts to support particular sectors of the economy, then it starts to be guided by “political rather than economic motives” (p.4).