Towards low carbon growth at the bottom of the pyramid

The bottom of the pyramid, which constitutes more than 42 per cent of the global population, is the most vulnerable to climate change risks. The recent disasters that shook Nepal, Bihar and washed away parts of Uttarakhand left us staring at this fact. In these events, the mass majority who were affected were from the poorer socio-economic group. An increasing frequency of epidemics and diseases in this group only make matters worse.

Through a differentiated approach, their livelihoods can be secured by providing employability skills and access to finance that would not only lower their vulnerability to climate change risks but also allow them to get on a low carbon growth path.

The climate change risks, therefore, have the potential to affect the society in more ways than one, and most of which, we are not, and cannot be prepared for. The issues, if not addressed in due time, can brew social unrest and even act as precursors to the impending wars over the most important of natural resources; water.

Policy makers across the world have realised there is a need to move away from traditional welfare models that were based on subsidies or grants, as it became increasingly clear that while these interventions could provide short-term remedies, they cannot be long-term, sustainable solutions.

The concerted effort, therefore, needs to be towards empowering the populace on different fronts that can positively impact their livelihood security. Improving their agricultural skills, providing better education and thereby improving their opportunities, facilitating infrastructure to ensure basic amenities, financial inclusion and improving their access to banking, delivering quality healthcare, and most importantly, providing enough food are the needs of the hour.

Creating enabling environments for the bottom of the pyramid to participate in the mainstream economy has shown to create a longer term economic impact. Livelihood security, thus, becomes a critical component of government policy as it is directly linked to other socio-economic and environmental outcomes in a society.

In parallel, climate change is a grim reality and there are millions of Indians at the bottom of the pyramid (BoP) who are earning their livelihood in sectors that are highly vulnerable to climate change risks. Responding to these risks becomes pertinent in India where their livelihoods are negatively impacted whenever disasters such as floods, earthquakes, cyclones and drought strike.

We have seen the climatic events affecting economies. The Nepal earthquake that devastated large parts of the country is estimated to cost the nation $10 billion for a recovery. Therefore, the economic activity is by far dependant on the situations of the communities.

It is the prime agenda of the government to provide basic amenities to the bottom of the pyramid. While the government has the mandate, corporates can come in here and possibly play a large role in helping the society empower itself and also adapt to the changing environment, and thereby mitigate the risks against it.

Scaling of innovations such water ATMs, healthcare interventions at grassroots, and other effective technological inputs would certainly help achieve livelihood security and also improve the opportunities in these emerging sectors.

The 12th Plan (2012-2017) describes skill building as an “instrument to improve the effectiveness and contribution of labour to the overall production” and “as an instrument to empower the individual and improve his/her social acceptance or value.”

However, just providing skills without employment could lead to frustration, thus, working towards a scenario where the livelihoods of millions of Indians can be made secure through relevant skill building should become a national priority.

Simultaneously, it is important that skill building, and through it, livelihood security goals, need to focus on making the BoP resilient to emerging climate change risks, and improve their adaptation to the ever changing socio-economic and environmental scenarios.

To achieve these twin objectives, innovative approaches are required. For example, developing skills in sectors most vulnerable to climate change like agri-efficiencies, social forestry, fisheries, integrated water management, solar installations may help address the issue.

As an example, approximately 400 million people in India do not have access to electricity as the grid has not reached them. Millions more, while living within the grid, suffer from limited and highly erratic supply due to poor power quality control. Providing off-grid, small scale, renewable energy solutions, based on innovations developed and scaled up at the bottom of the pyramid, can be a long lasting solution that would not only help them meet their energy requirements but also put them a low carbon growth path.

To further strengthen the National Rural Employment Guarantee Scheme (NREGS), the largest social security and public works programme undertaken in India, financial training provided through local intermediaries could enhance the positive impact on targeted beneficiaries. The government, in a welcome move, has devised a programme to include 3000 “barefoot engineers” - girls and boys to be trained towards rural infrastructure and farm productivity, which is certainly a decisive platform to move the rural economy towards a low carbon growth economy while securing livelihoods.

With the upcoming COP 21 later this year, where countries would need to take climate action commitments, climate resilience, adaptation and mitigation for India assumes special significance. Large-scale programmes under CSR initiatives, in water conservation and water harvesting, afforestation, micro-irrigation and flood control would support the government’s efforts and enable address domestic challenges.

Similarly, opportunities abound for the government to align its latest national skill development goals with its climate goals, and channel its initiatives to build skills that can achieve both aims. In some ways, this is happening already. For example, the Prime Minister’s Kaushal Vikas Yojana, implemented by the National Skill Development Corporation, has included national missions, including National Solar Mission, where the skilled workforce would be channelled into. Today, the need to achieve sustainable, long-term livelihood security through pertinent skill building has turned critical. A CRISIL report estimates that between 2011-12 and 2018-19, 85 million people would be entering the workforce, of which 51 million would be seeking employment. According to the report, the rate at which jobs are being created in the non-farm sector has been falling steady, thus resulting in millions of workers taking up low quality, low productivity jobs, mostly in agriculture.

Unfortunately, the large skill gap in India’s working population is exacerbated by the inability of the current skilling infrastructure to provide the necessary skills to so many people. According to a UNDP report, while only 2 per cent of India’s workforce has skills training, the current capacity can only train 3 million of the 12.8 million entrants into the labour force annually.

Rightfully, the government has made skill development a priority, and is working towards developing a “skilling eco-system” on the “Skill, Scale and Speed” plank envisioned by the Prime Minister. This presents a massive opportunity for the private sector to take a lead by channelising its CSR funds in filling this gap, and provide targeted interventions in their sectors of expertise.

There lies a huge opportunity for the entire eco-system to be developed in a way that it can help the beneficiaries achieve the dual objective of ensuring a safe and secure future and get on a low carbon growth path.

(The writer is Senior President & Country Head – Responsible Banking at YES Bank)