Daring to be different and right

The Kyoto Protocol is set to expire in 2012. Key developed countries appear unlikely to sign on to a new serious international agreement to reduce carbon emissions worldwide unless developing countries, many of whom are among the largest emitters of greenhouse gases, are also engaged in the process. Developing countries argue, however, that growth is a priority, and that their emissions per capita are still much lower than in the West.

India's negotiating team at the Climate Change Conference in Cancun, Mexico has shown a way out of this deadlock. Jairam Ramesh's proposal that, under the right conditions, India would allow verification of, and hard caps on carbon emissions, is a bold move that seeks to induce all other large polluting countries, including China, to agree to submit to a similar regime. The proposal requires that this must be accompanied by extensive handover of clean technologies with the know-how for how to use and manufacture them from rich to developing countries, a tremendous potential gain for numerous emerging markets. Some might question India's proposal. How can it be right to ask countries that are now finally growing to put in place regulations that may inhibit this growth?

First, India is likely to pay a high price for global inaction and deadlock in confronting climate change. State-of-the-art climate models predict that, if current trends in greenhouse gas emissions continue, India will have more than 100 extra days per year where temperatures exceed 32 degrees Celsius. As last summer's heat wave demonstrated, high temperatures exact a toll in India. Research (by Greenstone) indicates that at these temperatures, mortality rates become substantially elevated, especially in rural areas. Further, these hot days reduce agricultural yields, lower wages, and lead to higher prices for consumers in rural areas. Climate change is also likely to lead to increased climate instability, and more episodes of destructive severe weather comparable to this year's flooding in Pakistan.

Second, global coordination still remains the most effective way to reduce greenhouse gas emissions and India's position could prove the necessary bridge between the key interests. It is striking that China, the world's largest polluter, has so far proven unwilling to take action on this issue but China may be more willing to act if other emerging markets also follow the same restrictions. The support for hard caps could assuage the concern by several key players in the negotiations including the United States and Japan that emerging markets' emissions increases will undo any progress made in developed countries. These pieces appear essential for rich countries to produce the resources necessary to help poorer countries cope with the costs of reducing emissions and of adapting to climate change.

Third, the pledge of verification and caps will pave the way for creating a global emissions reduction target. This would be a promising development for India, because it would lay the foundation for a robust global trading market for carbon from which India would be poised to benefit economically. Specifically, developed countries would look for opportunities in India to reduce greenhouse gas emissions and would pay for those opportunities. This would generate a flow of money for India's businesses and citizens, as well as encourage modern, clean energy investments in India. This would be a welcome replacement to Kyoto's Clean Development Mechanism that has thus far provided India with 81 million certified emission reduction (CER) credits but whose future is threatened by legitimate concerns about the validity of the claimed reductions.

Climate change is a real threat to the global economy, to vulnerable populations, and to the world's natural resources. This is especially so in India where many still live in rural areas, the economy is heavily dependent on the climate, and the temperatures are already high. India's leadership at Cancun was bold, farsighted and politically, economically and morally correct. Other countries should take note.

Michael Greenstone is the 3M Professor of Environmental Economics at MIT and the Director of The Hamilton Project. Rohini Pande is the Mohammed Kamal Professor of Public Policy at Harvard's Kennedy School

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