Aim for Green Growth
By Ajay Goyal
The focus of climate change discussion should shift from doom and gloom to to vote wining. General Public and the silent majority is being given too little credit for its understanding and intelligence as climate change sceptics fight environmentalists word for word in cyber space. But that is not where the true battle lines are. In every village, town and city people can see declining quality of life from environmental damage and ecological shifts. The pressure on earth’s resources and environment is plain visible to everyone, everywhere. It is obvious to voters everywhere that resource exploitation cannot create long term prosperity and wealth. People understand that earth’s resources need to be renewed and we cannot keep spending the natural gifts of planet as if there were no tomorrow.
Even the most politically apathetic citizens in the world understand basic facts of life: earth’s resources are running out, pollution and environment damage are disturbing ecological balance and the current financial system built around self-serving investment patterns is not in the interest of general public.
But unlike climate sceptics it is pointless and counter productive to fuel anger against those who disagree with this simple reality. Voting in democracies is not a referendum on local industries and job providers. No one will vote to shut down factories , stop development or progress as it is understood now. Voters vote for jobs, for water, electricity, security and improvement in their life and prospect of a better life for their children than their own. What they need is a new promise and the certainty it can be real within their lifetimes.
What needs to come out from all future climate change discussions is a new development and growth paradigm. If sober and sensible climate policies are adopted today world can transition within two or three decades to a new era of prosperity. It is obvious that sensible climate policies, green growth or low-carbon development are the only avenues of sustainable development. Only self-reliance of small communities on energy generation can create inclusive growth all politicians and economists talk about but fail to deliver. In all discussion and plans of green growth, new job creation should come first and all talk of penalizing industries and workers in traditional industries must stop. Future needs to be planned in partnership with the business leaders and entrepreneurs of today not reinvented in opposition to them. Only if truly ambitious and productive alternatives are presented to public, destructive development can be slowed and stopped. In the absence of these alternatives, it is difficult to see how human ambition and greed can be contained through taxes and penalties in the name of climate change.
We cannot clear the playing field of world’s entrepreneurs and then build something intangible and new. We do not need any more revolutions. True, climate change will bring about disruption in life in many parts of the world but actions to mitigate it should not be disruptive, they need to be constructive and productive.
The climate policies being adopted and implemented in many countries have largely been ineffective. Emission Offsets, carbon trades and subsidies to “green technology” have given green growth a bad name. Public is genuinely concerned about climate change becoming another looting frenzy for the banks, corrupt politicians and crony capitalists.
The manner in which Ministers from many developing countries are demanding money from rich countries is disgraceful and off putting. If the world is to see any real action on climate change it won’t be through handouts, subsidies, penalties or bail out mechanisms of the kind that have ruined the global financial infrastructure.
For change to come politicians and policy wonks need to understand two simple realities. First, instead of subsidising clean technology or trading emissions, any available financial resources should be invested in innovation. Billions in subsidies cannot achieve what some millions invested in innovation can.
Indian government recently announced its Solar Mission which will involve trillions of Indian Rupees in subsidies over the next two decades to bringing solar power to the country. At the same time India has almost no scientific, research, innovation, development or production infrastructure for solar power. It is obvious that Indian solar mission will become a loot and grab for politicians and voters will be short changed in the name of climate change. Instead of launching the solar mission and a scientific plan at the same time the government should give at least two years for innovation and development and provide investment to hundreds of Indian entrepreneurs to develop locally relevant technologies and products.
The first phase of green growth should be about innovation, invention and an impetus to local entrepreneurship. There are sufficient resources in all major economies of the world to do so and rich nations do not need to pay for it. And that is the only vote winner in climate change policies.
Instead of subsidizing diesel fuel consumption as Indian government now does, it could generate enough cash in a month from cutting back on these subsidies or bogus social spending for a new breed of local entrepreneurs who can transform the country. The key is investment in innovation and not subsidy on consumption of uncompetitive products.
The second reality to be understood is that when these innovative & new energy generation techniques are developed, when new industries kick in, local clean jobs become available, new products are developed without carbon emission then the huge cost of green growth will be paid for by the consumer. The power of consumption should not be underestimated. It has been abused and misused, allowed to run amock or controlled but never properly channelized for common good. Consumer should be given greater choice between polluting, toxic products or green clean products. The consumer will not need any subsidy and will always work harder and earn more to obtain the better product. Consider this paradox of Indian poverty. Over 200 million people below the poverty line earning less than two dollars a day now own mobile phones. The poorest of the poor manage to save up to buy a $40-50 mobile phone and do not need any subsidy for that. No one really needed an iPod or tablet computers or thousands of other gizmo’s and products in the market. But people aspire for them because they are innovative, creative products and they appeal to the basic curiosity and creative instinct of people.
Investment in innovative green technologies will bring a new generation of products and services that consumers will no doubt buy with enthusiasm. These products and services will need to be competitive and they will automatically phase out inefficient and dirty products and services. Governments can help by making life a little tougher for worst polluters and invest in innovation but must stay away from the subsidies. This means we need nuanced policy making and not dumb spending. What resources governments can muster for climate change should be provided to worst affected regions and countries in building basic infrastructure and utilities so they too can secure themselves and incubate their own innovative entrepreneurs and not depend on western handouts forever. Indian government would do well to stop all subsidies and invest in water and soil conservation, reforestation and providing investments in small communities for building self reliant businesses.
The key to solving the climate crisis is investment in innovation and green, clean technologies and products. The world needs a whole new set of green tycoons and only success of green ventures and policies will bring the political capital necessary for change.
