The recently published report by the Intergovernmental Panel on Climate change (IPCC) in February 2022 has made it clear that the future lies in climate-resilient development, or nothing. Following in the footsteps of COP26 has suggested serious and urgent attention to the adaptation of climate risk management and mitigation policies, so that the goal of 1.5 degrees of temperature is met. One might think that this means a substantial investment in renewable energyclean technologies, infrastructure and related sectors, perhaps at the expense of others, and sacrificing competitiveness.
Given the abundance of traditional energy sources like coal and their reliance on related industries, some of our states like UP, MP and Odisha may not be naturally competitive in these areas. They may lose out in this race to attract investment. This can exacerbate inequalities, unemployment and poverty, while compromising their ability to generate income and their competitiveness. Furthermore, employment generation due to this change could also be concentrated in the more developed states of India, leading to regional disparities and also livelihood losses. So the question is, can competitiveness and our jobs agenda and climate-resilient investment go hand in hand?
The IPCC report also warns of the risks of maladaptive policy design and implementation. This can have adverse consequences for society, particularly for vulnerable groups. It suggests some enabling conditions to ensure optimal design and implementation of such policies. In a recently published statement
White paper on Improving India’s Competitiveness for Inclusive Economic Growth, jointly organized by CUTS International, Institute for Competitiveness and Institute for Studies in Industrial Development, we reviewed the enabling conditions for improving and maintaining India’s competitiveness and found substantial similarity to the conditions mentioned in the report of the IPCC. These are:
Investment in intangible assets: Competitiveness for inclusive growth is highlighted by strengthening social and economic infrastructures in education and health. The IPCC report also highlights that the viability and effectiveness of climate mitigation policies depend not only on the development of physical infrastructure but also on social infrastructure. This would improve the adaptive capacity of vulnerable groups through the diversification of their livelihoods and employment, as well as access to basic services and infrastructure. Therefore, investment in health and education will be essential to generate competitiveness and human capital, as well as climate-resilient development.
Better convergence between policies and actors: For competitiveness, it is essential to ensure convergence between different policies and actors, both inside and outside government and at various levels. According to the IPCC report, if policies focus on sectors in isolation, it would lead to maladaptation. It emphasizes the multi-sectoral, multi-stakeholder approach and inclusive planning, to minimize adaptation failures. This means that public sector companies, private actors, trade unions and civil society organizations must be involved in policy design, as it would ensure that all stakeholder interests, especially vulnerable ones, are taken into account. like local and poorer communities.
Modernization and improvement of the capacities of public institutions: Building institutional capacity, strength and credibility is the backbone of an economy’s competitiveness. The IPCC report also acknowledges that institutional and technological capacity can limit effective adaptation. It points out that the effective implementation of adaptations through financial and technological resources is only possible when supported by institutions with the capacity to understand the requirements.
Cooperative Federalism: This principle is at the core of all factors. In particular, the IPCC report, in multiple instances, highlights the importance of coordinated action at all levels of governance. Our White Paper on competitiveness also places sufficient emphasis on coordination between the three levels of government and between departments. This is especially relevant in a country like India with existing economic inertia and disparity that negatively impact competitiveness.
India is already on a clear political path towards climate-resilient development, as evidenced by its ambitious commitments at COP26. This would require the development of infrastructure, for which the government is promoting national and foreign investment, through schemes such as Incentives Linked to Production. The private sector is also making good progress by investing heavily in renewable energy, electric mobility and non-fossil fuel sources, towards its own decarbonisation goals. These investments will boost India’s competitive growth, create jobs and contribute to climate change mitigation.
However, such a transition for adaptations to climate change must occur in a fair, just and equitable manner, taking into account the existing competencies and competitiveness in the different regions. Investments must serve both development and adaptation objectives. Only when climate-resilient development occurs with inclusive growth and equity and justice are prioritized, can it lead to sustainable results.
India must seek to achieve the dual goals of economic growth and achieving its own climate goals, through carefully selected and implemented policies to attract public and private sector investment. Given the extreme inequalities in India, policies to achieve these goals must prioritize sustainability (for future generations), inclusion (for vulnerable groups), and equity (to reduce economic disparity). This can only happen when the building blocks of a competitive climate-resilient economy, as discussed above, are in place. India’s future as a competitive economy, contributing to global climate change goals with equitable domestic growth, lies in this integration.
https://energy.economictimes.indiatimes.com/news/renewable/can-india-become-competitive-while-pursuing-climate-resilient-development-difficult-but-possible/91427945
https://bullstrade.in/can-india-become-competitive-while-pursuing-climate-resilient-development-difficult-but-possible/
