Towards a low carbon future

The year 2007 has been dominated, among other global developments, by an expansion of interest related to climate change. Not only have governments and the public at large been gripped by concerns on what they may be required to do to meet this challenge, but business and industry round the world have also been trying to assess their own prospects, as they may unfold through multilateral agreements, national policies and the expectations of civil society.

This question would not present any complexity if Indian industry would have to contend with the domestic market alone. But rapid globalisation and the aspirations of Indian business to expand its role in global markets require a deep understanding of how climate change may alter opportunities and the demand for specific technologies and products in the future.

The recently concluded thirteenth Conference of the Parties (CoP) to the Framework Convention on Climate Change at Bali was significant not only for the final statement that governments agreed on but also the nuances of the discussions that took place and the alignment of forces that emerged as the debate on actions to be taken progressed during the two-week long meeting. Particularly significant was the fact that the deliberations of this conference were dominated heavily by the findings of the recently completed Fourth Assessment Report of the Intergovernmental Panel on Climate Change (IPCC).

For the first time in a CoP, there was a complete absence of any questioning of the scientific assessment of climate change. Delegations from every country supported the imperative need for reducing emissions of greenhouse gases (GHGs), but questions, led expectedly by two or three countries, disputed only the extent of cuts that a new global agreement (to come into force from 2012 onwards) should incorporate.

In the end a compromise was reached supporting deep cuts in emissions and a timetable for a draft plan of action being completed by the CoP to be held in Copenhagen in 2009. The spirit of the Bali meeting and the mood of all but two or three delegations was clearly in strong favour of emissions reduction targets by 2020 of between 25% to 40% over 1990 levels. While this figure did not gain acceptance in the final declaration, its shadow would influence further actions towards a multilateral agreement beyond 2012.

This range of cuts in emissions is drawn from the IPCC's assessment of stabilisation of GHG concentration levels, which would limit average global temperature increase to 2.0 to 2.4 degree celsius at equilibrium. This is the figure that has been advocated by the EU and some other countries as the maximum safe limit of warming that the world may accept.

All in all, the Bali meeting has reaffirmed what the IPCC's assessments point to, namely that the future of the world has to be characterised by low carbon economic growth, a fact that Indian industry would be well advised to make some concerted and voluntary efforts towards achieving.

A good model for some internally driven initiatives could be the automobile industry, which would need to improve energy efficiency and reduce GHG emissions of its products if it is to succeed in the global market. Voluntary agreements involving fuel economy standards have proved a major driver of change elsewhere, based on companies anticipating future changes in regulations as well as consumer preferences.

The Indian auto industry is large enough to also get into the development of hybrid vehicles which, incidentally, emit 45% lower emissions than present gasoline vehicles. In several other sectors too Indian industry can take proactive steps at reducing GHG emissions, with enhanced global opportunities and substantial benefits at the local level in terms of lower pollution and greater energy security.

It is time that Indian industry assessed and seized the advantages of proactive technology upgradation towards a low carbon future. That indeed is the message from Bali, which we would do well to accept.