Climate collaboration concerns amid resource diversion to conflicts – Issue #75
concerns about international cooperation on climate change as global resources are diverted to ongoing conflicts and crises, potentially impacting efforts to combat climate-related challenges
The Big Picture
During Covid, flouting both morality and scientific know-how on how to control pandemics, the West bought more vaccines than it needed.
It was one of those clarifying moments where the global order drops its mask, and we see that, all the communities about shared futures and values notwithstanding, the logic that created racism and colonialism – some lives hold less value than others – is still around.
Last week was another such moment. As this newsletter was written, Israel is bombing the Gaza Strip. Hardly anyone living there had anything to do with – or was in a position to halt – Hamas’ attack on Israel. And yet, the bombs fall. And the global world order firmly arraigns itself behind Israel.
For this reason, this newsletter thinks the world cannot (will not) fight climate change as one. Finance from the West – reparations for past emissions; loss and damage; energy transition; what have you – will be hard to come by. At some point, as climate chaos deepens and parts of the world turn uninhabitable, we risk ending up with two worlds, one better equipped to adapt/mitigate climate change. The other hot, thirsty and crowded. Faced with climate crises, the world might all too easily embrace genocidal thinking, as Timothy Snyder had warned. A real must-read, that essay.
All of which explains why the Global South has to back initiatives like the Bridgetown Initiative and take domestic adaptation/mitigation seriously, with or without financial aid from the West.
News of the week
For now, Israel’s attack on Gaza has also plunged the forthcoming COP at Dubai into uncertainty.
The UAE wants a de-escalation of violence. This, as Hindustan Times reported, is not the stance of “Western countries that back Israel in its retaliation of the terror attacks launched by Hamas”. Given this fundamental fissure, consensus building for global climate action might suffer. More concretely, resources which could have been used for climate action are being diverted to war.
This point came through earlier this week when US Treasury Secretary Janet Yellen said the US can jointly support two battles – Israel against Gaza, and Ukraine against Russia. One understands the rationale for supporting Ukraine. But Israel against Gaza?
Even as the global order bares its fangs, how is India’s war against climate change progressing?
In solar energy, the government continues to be pulled in two directions. It wants to rapidly scale up solar generation and become self-reliant in solar panel manufacturing. These ambitions have resulted in a zero-sum game between solar developers and manufacturers. To scale up, the first wants cheap solar panels – these are mostly from China. As they try to regain manufacturing competitiveness, Indian manufacturers want to import curbs on Chinese panels. The outcome has been a series of policy flip-flops.
Between 2013 and 2018, policy favoured solar developers. Import duties were kept low. In 2018, policy flipped and began favouring manufacturers. “The Centre, in 2018, imposed a safeguard duty on solar cells and modules for two years to protect domestic manufacturing,” wrote Business Standard. “In 2021, as the safeguard duty lapsed, the Centre announced a basic customs duty (BCD) of 40 and 25 per cent on solar cells and modules, effective April 1, 2022. It was followed by announcing an Approved List of Module Manufacturers (ALMM) which all are indigenous players. Project developers were mandated to procure from the list of companies in ALMM.”
However, solar developers howled in response, and India’s solar capacity addition slowed. And so, this March, the government relaxed import conditions. Now, in October, comes a countervailing howl. India’s solar manufacturers are demanding import restrictions.
PLI was supposed to be one way out of this zero-sum game. The government would help a few firms – as Korea did with the Chaebols- gain world-beating scale and use them to meet both solar generation and domestic manufacturing objectives. Last year, after studying the PLIs for solar panels and rechargeable batteries, CarbonCopy had wondered about their capacity to deliver on these objectives.
PLI, CarbonCopy wrote, stands “on a mix of old and new pillars—high import tariffs to coax companies to stop importing and source in India instead; a focus on creating a few champions in each sector where India wants global competitive advantage; an interim disability cost paid out by the government to these firms to offset the inefficiencies of manufacturing in India; and maximal localisation in each value chain to reduce dependence on other countries.”
Hardwired into these pillars are deeper questions. Should the state choose sectoral champions? How should it choose them? Even VCs, remember, struggle to choose the winners of tomorrow? Can the Indian State choose sectoral champions well? How significant is PLI support? The government wants chosen firms to extend across the supply chain – for batteries; and for solar panels. In today’s time, when firms focus on a single rung of a manufacturing process and build immense scale there, can one firm dominate the entire chain? Can import substitution result in export competitiveness?
Last week, a report suggested the Indian government is hitting the pause button on the scheme. “Of the 14 schemes, only a handful are performing well,” Business Standard was told. Sectors like solar PV modules, steel, textiles, and automobiles haven’t shown promising results. “Substantial progress has been seen only in sectors such as mobile manufacturing, pharmaceutical drugs, bulk drugs, medical devices, and food products, where incentives or subsidy payouts have been the highest,” reported the paper. Even these claims of progress are questionable. Sectors like textiles and pharma have lakhs of companies. The government, however, has directed subsidies to a few.
With wider sectoral malaises going unaddressed, a few firms gain while the multitude languishes. With benefits flowing to a few, to the mind leap predictable questions about course correction in any of these schemes.
In another policy flip-flop, however, the Department for Promotion of Industry and Internal Trade wants to subsidise electric four-wheeler makers. The subsidy will be based on the investments made by these companies for producing vehicles in the country, senior officials familiar with the development told Economic Times. “Unlike FAME II (Faster Adoption & Manufacturing of Electric Vehicle), which is an upfront subsidy paid to consumers, this will be a manufacturing incentive," the paper was told. “The government plans to incentivise carmakers based on their investments to manufacture cars locally.”
This is similar in thought to PLI. And so, an old question writes itself again. What are the benefits of manufacturing incentives? Do they create demand? Are there better ways of creating demand? It could be argued that Indian demand, suppressed as it is given the state of the economy, is still capable of attracting fresh investment. Last week, $18 billion VinFast, a Vietnamese automaker which briefly – in August -- became the world’s third most valued automaker, said it would enter India.
In happier news, India's largest banks have begun to audit their and their borrowers' carbon footprints as they try to mitigate financial risks amid growing pressure from regulators and investors to better align their ESG reporting with global norms, said Reuters. A clutch of states, like Maharashtra, are pushing solarisation of their agricultural feeders (power lines for farmers) to allow consistent power to its farmers during the day. This is a welcome development. For long, discoms have supplied power to farmers when power demand ebbed elsewhere. And so, tales are legion of farmers getting power for their groundwater pumps only after midnight. Solar feeders will put an end to that. Another news report last week flagged another innovative solution to the problem of irrigation in water-stressed times. Farmers in Karnataka are burying clay pots in their fields. “In this ancient irrigation scheme, porous clay pots are buried underground and slowly keep releasing water to the plants,” wrote Gaon Connection. “In an acre of land, about 140 clay pots are buried. These clay pots need to be refilled with water after about a week, depending on the crops being cultivated. The clay pots can be used for three years.”
Other news. As a forthcoming story in CarbonCopy will show, global nuclear majors are making a big push in developing countries – they need to decarbonise but lack renewable potential and funds. One such deal surfaced last week. Russia’s Rosatom will build a nuclear reactor in Burkina Faso. India has slipped to 111 in the global hunger index. Meja Urja Nigam, a 50:50 Joint Venture (JV) between NTPC and Uttar Pradesh Rajya Vidyut Utpadan Nigam, plans to build 5.6 gigawatt (Gw) of coal-based power generating units in the coming years. “UP’s plan to set up a new thermal unit in the state comes after a hiatus of nearly 10 years. This also indicates a comeback of coal-based power units with states looking to set up mega plants in their backyard as demand crosses record highs,” reported Business Standard.
In a suo-moto case, the NGT issued notices to the Sikkim Government, the Sikkim Urja Limited and the NHPC on a hearing on the breach of the Chungthang dam which led to the recent devastating flash floods in the Himalayan state.
And then, there is the Adani Group. Last week came another devastating report from the Financial Times. Despite multiple complaints, media reports and court cases, the pink paper found Adani continues to inflateits imported coal costs, forcing millions of Indian consumers and businesses to overpay for electricity. “Over the past two years, Adani used offshore intermediaries in Taiwan, Dubai and Singapore to import $5bn-worth of coal at prices that were at times more than double the market price,” reported FT.
As the week progressed, news also emerged that SEBI is investigating the relationship between the Adani Group and a fund incorporated in the British Virgin Islands to see if there has been a violation of share ownership rules. It wasn’t the only investigation. India's corporate affairs ministry is investigating the accounts of the group's two airports in Mumbai.
One doesn’t know what to make of these latter developments. As the tweet below says, the FT report underscores the group’s impunity.
In the days that followed, TMC leader Mahua Moitra found herself at the receiving end of a smear campaign from the BJP. She has responded pugnaciously, sending legal notices for defamation to BJP leader Nishikant Dubey, the Adani Group, and many media houses which amplified the allegations against her. The government cracked down as well. It took tax exemption away from Oxfam and Environics, citing their protests against Adani projects citing their adverse local impacts.
The group continues to grow. It inaugurated its Vizhinjam trans-shipment terminal, and now wants to acquire ports outside India. “The group, which acquired Haifa Port in Israel early this year for $1.2 billion, is looking to acquire ports in East Africa (Kenya and Tanzania), Vietnam, and some in the Mediterranean Sea,” reported Business Standard. It is also in talks to pick up Disney Hotstar.
Climate long-reads of the week
Israel’s week of infamy: ‘We don’t yet know where it will end’ (FT)
Where the Palestinian Political Project Goes from Here (New Yorker)
How the Israel-Hamas War Is Tilting the Global Power Balance in Favor of Russia, China (WSJ)
How criminalisation is being used to silence climate activists across the world (Guardian)
If the first solar entrepreneur hadn’t been kidnapped, would fossil fuels have dominated the 20th century the way they did?(Conversation)
Revealed: Tenth of UK’s climate-aid spending goes via private consultancies (CarbonBrief)
How the collapse of farming in Kalimpong has given rise to the ‘homestay’ tourist economy (Scroll)
‘Blueprint for disaster’: Singapore’s carbon hub threatens global climate targets (Source Material)
India’s Methane Emissions Challenge: Addressing The Data Gap In The Oil & Gas Sector (Indiaspend)
Book of the week
Our book this week has nothing to do with climate but has much to say about the world taking shape around us.
Reporter Kashmir Hill’s Your Face Belongs To Us: A Secretive Startup’s Quest To End Privacy As We Know It focuses on facial recognition technology. The question the book posits is straightforward. Who owns the personal information all of us decant onto the internet? As facial recognition shows, rushing ahead with technologies without answering such questions – policy badly lags technological change – creates Orwellian outcomes. This excerpt makes that point amply clear.