Emissions Cuts Would Cost India Dearly

The poor can't afford a big tax on energy usage, or a return to the License Raj of times past.
By SHIKHA DALMIA
In the pre-iTunes, pre-MTV age, there was usually a multiyear lag before hit songs in the West reached India. Now India is experiencing a similar time-lag on global warming. Just when fresh doubts about the issue are emerging in the West, India is flirting with the idea of hopping on the global-warming bandwagon at the Copenhagen climate-change summit next week.
This is in large part a misguided attempt to bolster India's political standing in the world. In an October letter to the prime minister conveniently leaked to the press, Environment Minister Jairam Ramesh expressed concern that India's intransigence on the issue was making it a pariah among developed countries, jeopardizing its bid for permanent membership at the United Nations Security Council. He counseled that India delink itself from the Group of 77 developing nations resisting forced emission cuts without compensation, and instead make common cause with the Group of 20 rich countries pushing for climate action.

Mr. Ramesh's letter is a significant change of tune, given he made headlines this summer when he bluntly told Secretary of State Hillary Clinton that India was simply in no position to accept binding emissions cuts. It is widely regarded as a trial balloon by the government of Prime Minister Manmohan Singh and has triggered a maelstrom of protest in parliament, forcing Mr. Ramesh to pledge not to accept legally binding emissions cuts. But the government is nevertheless trying to change India's current domestic global-warming policy more dramatically than it is letting on to better align it with global demands.
The current policy, called Nationally Appropriate Mitigation Actions, in some ways is a declaration of India's independence on climate change. It essentially tells the world that India will undertake mitigation efforts if and when it is in its self-interest. The proposed new policy, dubbed Nationally Accountable Mitigation Outcomes, is something completely different. It would commit India to developing a mitigation plan right away. The plan would be enforced by domestic law but Mr. Ramesh—tellingly—wants to submit the emissions reports generated for international scrutiny every two years. This could well become a prelude to India eventually joining a global emissions regime.
Even worse, the new regime would unleash Byzantine new regulations on the country, from new energy efficiency standards in building codes to new fuel economy standards for vehicles. India would have to obtain 20% of its energy from renewable sources—wind, solar and small hydroelectric power—compared to 8% now. Given that these sources are typically far more expensive than fossil fuels, this would mean putting Indians, 40% of whom don't even have access to electricity, on an even stricter energy diet. The increased expense will put homes, air conditioning and cars out of reach of more Indians—all of which will make them, especially the poor, less able to withstand floods, heat waves and other dire effects of global warming should they ever materialize.
The resulting emission cuts won't even make a dent in global temperatures. India's per capita energy consumption is 15 times less than America's and half of China's—the two biggest polluters. To be sure, President Obama is poised to pledge to cut U.S. carbon emissions 80% below 2005 by 2050 at Copenhagen. But it's an empty promise because there is little to zero chance that he will be able to get Congress to go along. China too announced plans—modest by all accounts—to curb its emissions. So India will certainly face pressure at the conference to act, despite the fact that bigger polluters won't.
But as a developing country, India can least afford to give up its right to consume as much energy as is necessary to deliver all Indians a living standard comparable to the one that rich countries take for granted. There is every reason to believe that the new License Raj will damage India's economy every bit as much as the old one in the preliberalization days, when India's growth rate remained stuck at around 2%. This would be unfortunate at any time, but especially now, when the West itself is in the middle of a huge rethinking on this issue.
Front and center is the ClimateGate scandal that's erupting in Britain. Leaked emails out of the climate research center of Britain's University of East Anglia, unveiled last week, suggest scientists manipulated data, destroyed inconvenient evidence and tried to suppress opposing views. The scandal is prompting calls for a full-blown government inquiry into the science of global warming in both Britain and America. Cap-and-trade regimes in Washington and Canberra have stalled, and no one expects a climate deal of any substance at next week's Copenhagen meeting.
Meanwhile, global-warming fatigue is setting in everywhere. An October poll by Pew Center Research found that only 57% of Americans think there is solid evidence that the earth is getting warmer, down from 71% in April 2008. Only 36% now believe that the warming is caused by humans, compared to 47% in April 2008. Nor is America unique. The number of people rating climate change as the major issue they worry about has dropped to fourth place behind global economic stability in the last year, according to the HSBC Climate Confidence Monitor, a polling operation established by the bank and leading environmental outfits.
In the long run, India will gain more international respect if it remains focused on growing its economy instead of reshackling its people under a new, green License Raj. That's the real climate-change calculation Mr. Singh should be worrying about.
Ms. Dalmia is a senior analyst at Reason Foundation and a Forbes columnist.