Managing Climate Change

Countries have limited resources, and careful planning could reduce waste and poverty while ensuring prosperity and security. Nicholas Stern, an economist who assesses the effects of climate change, focuses on India in this article for Seminar and argues that investing in urban planning and reducing sprawl has value: “Investments in cities, energy and land use have very long-run effects (lock-in of long-lived infrastructure and capital, for example) so that decisions at these current and crucial stages of expansion and change are vital. But also, if the sense of direction is sound, the discoveries and innovations, which are usually integral to radical change, can be focused on creating much more attractive and sustainable ways of living and producing. ‘Wise investments’ here refers to implications, for example, for congestion, pollution, ecosystems, the liveability of cities, health and nutrition.” Stern urges protecting and conserving water supplies, preventing land degradation, increasing energy productivity and emphasizing sustainability. He concludes that unchecked climate change combined with poor planning will devastate emerging economies like India. – YaleGlobal

Managing Climate Change

India and others must minimize waste and engage in active urban planning focused on sustainability to reduce poverty
Nicholas Stern
Thursday, January 8, 2015

India has an enormous opportunity over the next 15-20 years to grow its economy in a way that reduces poverty, creates prosperity and promotes the health and well-being of its citizens. The country faces critical choices about the development of its cities, the use of its land and the structure of its energy systems. These choices will profoundly influence the great structural transformation under way in India, which has at its heart crucial changes in all three areas. Decisions about these will determine whether India will achieve the aim, proposed in much public discussion of national objectives and national plans, of faster, more inclusive and sustainable growth. By choosing well, India could enjoy a cleaner and more secure form of economic growth that will avoid many of the problems that other developing nations, including and particularly China, have had to endure.

Wise investments in these areas in the next two decades will shape India’s future for the rest of the century. Indeed, these investments will in large measure determine whether and how this century can become ‘India’s century’. Investments in cities, energy and land use have very long-run effects (lock-in of long-lived infrastructure and capital, for example) so that decisions at these current and crucial stages of expansion and change are vital. But also, if the sense of direction is sound, the discoveries and innovations, which are usually integral to radical change, can be focused on creating much more attractive and sustainable ways of living and producing. ‘Wise investments’ here refers to implications, for example, for congestion, pollution, ecosystems, the liveability of cities, health and nutrition.

Further, and very important, such investments will significantly reduce the emissions of greenhouse gases which cause climate change, relative to that which would follow from standard old-style city structures, outdated high-carbon approaches, and a casual or haphazard approach to rural land use. That will in turn not only affect aggregate global emissions directly but just as, if not more importantly, affect the pace of change of action on climate and emissions elsewhere in the world, particularly in relation to major international decisions which will take place next December in Paris. Even though India has substantially less emissions per capita than China, and far less than the rich world, its size and voice make it influential. And India is very vulnerable to climate change.

An analysis of possible routes towards better growth and a better climate for India will be laid out in a detailed report due to be published soon by the Global Commission on the Economy and Climate (Read about the commission’s report; there has been strong collaboration with ICRIER in Delhi.) The report will explain how India’s future could be undermined if bad economic decisions are made, leading to sprawling cities that are congested and polluted, land that is badly degraded through destructive agricultural practices, forests further fractured and destroyed and an energy system that is insecure, inefficient and dirty.

Using examples from all around the world, the work of the Global Commission shows the huge value of investing in good urban planning to make cities more compact, served by fast and effective public transport systems. How cities should develop over the next few decades is one of the most difficult and pressing decisions that India faces. Urban populations are increasing at a phenomenal rate. Between 2001 and 2011, the population living in India’s cities increased by 91 million to 377 million. That number is expected to rise to more than 600 million by 2031. By then, cities will be responsible for three-quarters of its gross domestic product, and will create more than two-thirds of new jobs.

But their success will be hampered and distorted without careful measures to ensure adequate supplies of resources, including water, energy, and food while limiting waste and pollution. One can already see the consequences of different approaches by comparing Mumbai, Delhi and Kolkata. All three cities have similar sizes of population, but Delhi sprawls over a much larger area and more than a fifth of it is covered by roads, compared with just one-twentieth in Kolkata. The rate of vehicle ownership in Delhi is more than 10 times higher than in Kolkata.

The increase in vehicle use has increased harmful air pollution, including small particles produced by the burning of fossil fuels. As the Global Commission noted in September, premature deaths caused by people breathing in particles less than 2.5 microns in diameter (smaller than a pinhead) had a (median) estimate of 627,000 in 2010 (with damages on some calculations equivalent to 6% of GDP each year). That, from one pollutant alone, is a staggering waste of human life and economic potential. But India’s cities do not have to be so dirty and polluted.

Making them more compact reduces the amount of travel that needs to take place, including to and from work. And the overall number of vehicle journeys can be reduced further by investing in public transport, hence reducing energy use, congestion and pollution.

Just over a decade ago, Ahmedabad in Gujarat was ranked as the most polluted city in India. One in ten trips in the city were carried out by its 35,000 autorickshaws burning dirty diesel fuel. But in 2006, it produced plans to introduce a bus rapid transit system, with dedicated lanes to improve journey times. More than 130,000 people each day now use the bus system, making the city cleaner and more efficient.

The unchecked expansion of urban areas swallows up land and competes in turn, for land for food production. Both wasteful development and climate change put intense pressure on demand for water and other vital resources and disrupt the balance with threatened supply. Weather records show a pattern of more frequent droughts in India since the start of the 20th century, processes likely to be complicated and intensified by climate change. 

Problems of land degradation and falling water tables surely show the importance of India’s preserving and enhancing its agricultural land to find ways to use it in a sustainable manner, and protecting supplies of, and not wasting water. India recognizes, but all too often fails to act on, the need to protect forests and prevent other forms of land degradation if, for instance, it wants to protect its water and ecosystems and limit its growing dependence on imports of foodstuffs.

Energy must be used much more productively, and in much less dirty ways, if India is to find a path for sustainable growth. At present, more than a fifth of the electricity generated by India’s power system is wasted during transmission and distribution, compared with less than 10 per cent for China and the United States. The wastage of electricity in India includes theft as well as losses in metering, billing and collections. Such inefficiency has particularly severe consequences for poor rural communities.

Over the last decade, power generation capacity in India has risen sharply, but the number of households supplied with electricity has advanced much more slowly. One of the reasons why the gains in generating capacity have not led to a concomitant expansion of supply to poor rural communities is because of inadequate grid and metering infrastructure. I have seen the consequences of poor energy, water and environment policies and administration at first hand, through my work on one Indian village in UP for more than 40 years. Another reason is that bankrupt state utilities cannot afford to supply power to poor households when they cannot distinguish them from agricultural end users. In many ways, it is worse than this. Unreliable power supplies, e.g. for irrigation, lead to electric pumps being left on overnight, flooding fields, wasting energy and water, causing soil erosion and burning out pumps.

So India will need very significant investments and institutional reforms in improving the quality and efficiency of its electricity network in order to reach poor rural homes and better serve agriculture. A large part of the response may be provided through Prime Minister Modi’s proposal to bring electric lighting, by 2019, to 400 million people who currently do not have access, through solar-powered lamps.

This will also lower the demand for power generated by coal, which is a major source of the air pollution that kills so many Indians each year. The intention (announced by Environment Minister Prakash Javadekar in the UNFCCC meeting in Lima in December 2014) to raise the targets for ‘the solar mission’ from 20 GW to 100 GW by 2020 is surely a powerful and promising sign given that India starts now from a low three GW. India is seeking to create and foster around $100 billion dollars in this area in public and private investment in the next seven years. Achieving this would avoid 130 million tonnes of coal being burnt each year. Minister Javadekar’s announcement, also at Lima, of forthcoming comprehensive climate legislation was well received – India’s influence grows with its climate action whilst that action also fosters development and inclusion.

So, by focusing on making good choices about cities, land and energy, India can boost development and reduce poverty. Good economic performance, attention to waste and focus on a sound environment support each other and deliver growth, inclusion and poverty reduction.

Such decisions will also help to limit India’s annual emissions of greenhouse gases, which drive climate change. India emits less than two tonnes of carbon dioxide-equivalent per capita each year, compared with more than 20 tonnes in the United States, about 10 tonnes in Europe, and about 10 tonnes for China. These are the top emitters. India’s large population makes it one of the world’s top ten biggest emitters. Further, India’s emissions have been growing rapidly, increasing by 60 per cent between 2000 and 2011. Thus India’s size and growth will make it influential in determining the future growth of total world emissions.

India has already set a goal to promote economic development while also curbing the growth in its emissions. India’s GDP rose by 120 per cent between 2000 and 2011, whereas its emissions per unit of GDP declined by 27 per cent over that period. This drop in ‘emissions intensity’ occurred even as India’s energy consumption and per capita emissions rose during a process of development and structural transformation.

This shows that India has already started to decouple its economic growth from emissions. The government has committed to reducing the emissions intensity of its GDP growth by 20 to 25 per cent of its 2005 level by 2020. But much more can and should be done to limit India’s future emissions of greenhouse gases. As close to half of emissions are derived from its cities, urban areas must play a big part in further reductions.

India can learn from the experience of China, which has achieved spectacular economic growth and lifted hundreds of millions out of poverty. But China has created enormous damage to itself through the air pollution created by burning coal and diesel, particularly in cities. In November, China announced that it would start to reduce the absolute value of its annual emissions of greenhouse gases no later than 2030, and would reach a peak in its coal use by 2020 (simultaneously United States announced its plans for emissions reductions of 26-28 per cent 2005-2025, and the previous month Europe announced 40 per cent reductions 1990-2030). China’s people and policy makers are now clear that they would have sought a different path for cities and coal use, in terms of consumption, waste and air pollution, if they had been able to anticipate the severity of the problems. Some parts of China’s experience and performance carry strong positive lessons and others negative. It is important to learn from both. China now wishes it had peaked coal use much earlier.

China’s determination to cut its emissions is also driven by an understanding that poor people are being hit hardest by the impacts of climate change. With rising sea levels and the intensification of extreme weather in some regions already documented by the Intergovernmental Panel on Climate Change last year, India surely also recognizes its great vulnerability. There is an urgent challenge to both adapt more rapidly to changes now inevitable, and to work with partners around the world to limit emissions. Like China and countries across the world, in India it is the poorest who are hit soonest and hardest by extreme weather events and a deteriorating environment.

Cities such as Mumbai are particularly exposed to the threats created by rising sea levels and potential increases in the severity of typhoons as the temperatures of sea surface waters climbs. Climate change is also likely to affect the monsoon rains, increasing the risk of flooding or failure of the monsoon. And the rapid decline of the glaciers in the Himalayas has fundamental implications for the long-term future of the Ganges and other rivers.

India could be devastated by unchecked climate change. And although it may be able to spend more of its prosperity on protecting its population from a more hostile climate, there can be no hiding from the fact that climate change could undermine and undo its economic development and growth with particularly severe consequences for the poorest.

Many of the actions India needs to take to make its economic development more robust, healthy and sustainable, abstracting from considerations concerning the emissions of GHGs, will also help to reduce its emissions towards levels that are consistent with the international goal of avoiding dangerous climate change due to global warming of more than two centigrade degrees above pre-industrial levels.

The Global Commission estimates that, for the world, at least half of the cuts in annual emissions required by 2030 to be on a pathway consistent with the two degree threshold can be achieved through measures that have other economic benefits such as reducing local air pollution. The same arguments, taking into account India’s conditions, apply to India’s development, structural change and emissions.

As the India study by the Global Commission shows, in the next 15 years, India can create sustainable and inclusive growth by investing in cleaner and more efficient technologies and infrastructure, building stronger and more liveable cities, and safeguarding its land and forests much better than it has in the past. In doing so, it will be embodying the principle of equitable access to sustainable development, which India introduced at the United Nations climate change summit in Cancun, Mexico, in 2010.

India will not only benefit itself greatly from such a strategy; it can also set an example that many other countries will want to follow to ensure better growth and a better climate. And in so doing, both its negotiating position in international discussions of climate change will be strengthened and its voice heard more clearly and strongly. The time for decision is now. The next 15-20 years will profoundly shape India’s future and India’s role in the world.

The world will deliver on poverty reduction and managing climate change together. If it fails on one, it fails on the other.


Professor Nicholas Stern has been chair of the Grantham Research Institute since it was founded in 2008. He also holds the following positions: chair of the Centre for Climate Change Economics and Policy; IG Patel Professor of Economics and Government at the LSE and Economic Organisation and Public Policy Programme Associate at STICERD; chair of the Asia Research Centre; and director of the India Observatory.

© Copyright