US-China climate deal: a lot of hot air

The recently concluded understanding between the US and China in Beijing to limit their emissions of green house gases (GHGs) to check global warming has received wide attention. The New York Times hailed the agreement between the world’s two largest emitters as “an enormously positive step in the uncertain battle against climate change.”

In India too, there has been appreciation of the deal with attendant demand that the country should take a leaf out of it and adopt a ‘nuanced approach’ in the ongoing global negotiations on crafting a new climate agreement.

The contents of the deal and the feasibility of their implementation would bear scrutiny before any judgment is passed on the merits of the deal.

The world’s current largest emitter of GHGs and hence the leading contributor to global warming in this century, China, has undertaken to cap its emissions from 2030, a timeframe in which it would have caught up with most industrialised countries in its per capita emissions and would continue to retain its top position among all emitters.

In addition to announcing the year by which its emissions would peak, China has pledged to cut down, in this timeframe, the GHG intensity of its GDP by 40-45 per cent of the 2005 levels. So far as US is concerned, President Barack Obama has undertaken to reduce annual US GHG emissions from their 2005 level of close to 6 billion tonnes by 26 to 28 per cent by 2025.

With these details, we can proceed with our examination. Take China. Its undertaking to reduce its GHG intensity of economic growth by 40-45 per cent of its 2005 levels by 2025 is nothing new but only a modified reiteration of its commitment announced in Copenhagen in 2009.

In Copenhagen, China had agreed to this order of reduction by 2020 itself. Now, that deadline has been pushed back by a good five years, that is China seeks to gain more time to effect the reductions. Therefore, the only concession extended by it is to cap its emissions at the 2030 level.

China’s emissions would continue to grow well up to 2030. Its projected economic growth would remain at a healthy 6.5 per cent per year, though pared down from the earlier pursued 8 per cent. The reason for the reduction in the growth figure is, quite understandably, due to the current and foreseeable global slowdown which will impact China’s exports adversely.

But given the frenetic pace of its development till now and falling exports, it should not be difficult for China to make a bold commitment to bring down its energy intensity. Even with such a reduction, China would emerge as the world’s leading industrialised nation by 2030, ahead of even the US. US doublestand

As far as the US is concerned, Obama has conceded nothing significantly more than what he had already done in the past. As early as in 2009, he announced that US would reduce its emissions by 17 per cent compared to 2005 levels by the year 2020. This target has now been revised to 26-28 per cent to be achieved by an extended deadline of 2025.

This revision, though a shade better than the earlier commitment in terms of emission reductions, is quite favourable to the US. A simple calculation would show that had the US become a party to the Kyoto Protocol — which it has not — it would have been asked to reduce its yearly emissions of 4.8 billion tonnes in 1990 by 7 per cent to 4.46 billion tonnes by 2008 to 2012.

Now, even with a seemingly higher commitment of 26 per cent reduction but with 2005 as the base year when the US emissions had risen to 6 billion tonnes, it would be reducing to the level of 4.46 billion tonnes by 2025 only. Therefore, the US commitment in Beijing is more of a gain to it than a sacrifice on its part.

Despite the shale oil and gas boom that would help replace coal by oil and enable the US to emit less of GHGs, Obama will find it an uphill task to carry the US Congress with him on the emission reduction commitment made by him. After the recent mid-term elections, both the House and the Senate have come under a Republican majority and the opposition is rolling up its sleeves to counter the President’s Beijing pledge.

Even his fellow Democrats from carbon mining states had not looked upon his earlier moves to cut dependence on coal with favour. His recently preferred device of bypassing the Congress and having regulations issued by the Environmental Protection Agency( EPA) to enforce emission cuts on industry has come under serious attack.

What about India? India made a commitment in Copenhagen (2009) to reduce its GHG intensity of GDP by 20-25 per cent by 2020 compared to the intensity in 2005.

The Government has already released a National Action Plan on how it would abide by this commitment. Jairam Ramesh, former Union Minister, in a recent article in The Hindu (November 13, 2014), expressed the view that since the world community would expect India to follow the recent Chinese example and come out with firm commitments for 2025 and 2030, India should announce its commitments for these years.

Ramesh places reliance on a report on ushering in a low carbon economy in India released by the Planning Commission in April, 2014 which contained projections of India’s annual energy demand up to the year 2030-31 and on measures to be taken to meet the demand through a mix of energy sources, that is, fossil fuels and renewables and calibrated policy initiatives.

Since this committee had arrived at the conclusion that a low carbon economic growth path would entail a mere 0.16 per cent drop in the Cumulative Annual Growth Rate (CAGR) compared to a baseline model CAGR of 7 per cent, Ramesh has argued that India could embrace a low-carbon path and should be in a position to announce emission intensity reductions for the years 2025 and 2030. This, according to him, would send a message to the critics that India is a climate ‘deal maker’ and not a ‘deal breaker.’

What seems to have been overlooked in the above argument are the assumptions and financial implications of enhancing India’s ambitions in reducing emissions. Under the baseline model, a reduction of 22 per cent in emission intensity is possible by 2030 compared to 2007 levels whereas under the low-carbon model, a vastly higher reduction of 42 per cent would result.

There is, however, a caveat to this statement. The low carbon model would involve not only a substantially higher investment overall than the baseline script but would also need diverting about 50 per cent of the investment in sectors other than energy to renewable energy generation.

The figures of additional outlay of the order of $834 billion (at 2011 prices) required to be made in the energy sector under the low carbon model as compared to the baseline model accompanied by a cumulative GDP loss of $1344 billion up to 2030-31 are indeed staggering.

This effort would call for large scale international assistance which may not necessarily be forthcoming. Finally, any growth rate higher than 7 per cent per year, if necessitated by circumstances, would be unaffordable under a low-carbon strategy.

The US- China climate deal is a deceptive one and India need not follow suit.

The writer is a former Secretary, Ministry of Environment, Forests and Climate Change