Major Economies Forum

Background:

  • The election of Joe Biden as U.S. President has catapulted climate change to the top of the global agenda.
  • Interestingly, the U.S. is not just striding back to the Obama signature achievement of the Paris Accord with its voluntary commitments but also to the Bush days [which was not necessarily voluntary].
  • This change is best evidenced by the presidential call to reconvene the Major Economies Forum (MEF).
  • The MEF, which was first convened in March 2009, originated in the Bush-era U.S. efforts to rope in major emitters. It was also to push a way forward on climate change without heed to the principle of differentiated responsibilities and recognition of historical responsibilities.
  • These two are hallowed principles of the climate discourse given the decades of staying power of greenhouse gases (GHGs) in the atmosphere.

Implications for India

  • All countries have been told to commit to net zero (GHG emissions) by 2050 with credible plans to ensure meeting this domestic target.
  • Taking a cue from the new U.S. Administration, the UN Secretary-General has even called on countries to declare national climate emergencies apart from building a coalition for a carbon-neutral world by 2050.
  • As of today, countries representing around 65% of global CO2 emissions have already agreed to this.
  • These plans and their implementation will, undoubtedly, be subject to international reviews and verification. Historical responsibilities and differentiation have no place in this discourse; but neither does the level of development.
  • India can easily be in the crosshairs of such a discourse no matter its extraordinarily small carbon footprint in per-capita terms and huge development imperatives.

Carbon border levies

  • Adding to the challenges is the distinct possibility of the EU imposing carbon border levies on those who do not take on high carbon cut-down targets and do so unilaterally if there is no global agreement.
  • While as of now the U.S. Administration appears ambivalent on these border levies, the possibility of their coming around cannot be ruled out.
  • In such a scenario, World Trade Organization rules that presently exclude the use of tariffs on environmental grounds will certainly get modified.

Proposal for a global fund:

  • To deal with the issue of climate finance, Raghuram Rajan has recently put forward a proposal for India to consider. The proposal calls on countries to pay into a global fund amounts based on their carbon emissions over and above the global per-capita average of five tons.
  • This obviously disincentives coal in a big way while incentivising renewables.
  • Those above the global average would pay, while those below would receive the monies.
  • While this would suggest a certain equity, it may be unacceptable to the developed countries even though Mr. Rajan has gone along with the drumbeat to forget historical responsibility.
  • For India, such a proposal may appear attractive as India today has per capita CO2 emission of only 2 tons and is a global record setter in pushing renewables.
  • The long-term implications of such a proposal require examination in detail, quite apart from factoring in the twists and turns that negotiations could give to such an idea.
  • And then, of course, there are alternatives such as emission trading. 

Implications for developing countries

  • The proposal of fund pay-in allows practical considerations to trump fairness by not only giving a short shrift to historical responsibility but also denying priority access to the remaining carbon space for developing countries.
  • In that sense, it double penalises them while giving developed countries a certain free pass.
  • Here it bears noting that more than 75% of the carbon space available to humankind to keep global temperature rises to 1.5° C has already been taken up by the developed world and China.

Conclusion

  • Climate justice is an imperative for India, which needs to leverage its green and pro-nature commitment to ensure carbon and policy space for its developmental and global aspirations. India’s diplomatic and negotiating efforts must be quickly geared to that end.