Humankind's response to Covid has clearly shown that we have only limited ability to adequately comprehend even the present, let alone accurately project future scenarios. A similar predicament awaits us in dealing with the inevitability of climate change. There is an increasing tendency to suspend disbelief and suppress dissenting views, and this approach will prove counterproductive to both society and the economy. Schemes to achieve net zero carbon emissions are expensive and will not thwart accelerated global warming. A better approach would be to spend the available funds adapting to the abrupt climate change that is already underway, accentuating the existing socioeconomic inequalities. It is, ultimately, easier to adapt to climate change than to attempt to combat it.
Developing countries should actively push the financing agenda at COP27 next year in Egypt to ensure that enough funding is made available to them. But they also need to have reasonable expectations. They cannot expect the entire amount ($ 800 billion by 2025 rising to $ 2 trillion by 2030) to be made available by the international community. A large part of it would also have to be raised domestically, by both the public and the private sectors. This would largely reflect the investment that would normally go into the national energy sector in a regular growth scenario.
From the policy perspective, the high uncertainty surrounding demand scenarios merits serious consideration. Technological change is hard to predict, and the speed and direction of the transition to a greener future depends upon the evolution of policy decisions. Such ambiguity is detrimental as it may hinder investment, and raise the odds that high commodity prices derail or delay the transition to a greener economy. A credible, globally coordinated climate policy along with reduced tariff barriers and export restrictions would allow markets to operate efficiently. This will induce investment to sufficiently expand the supply of raw materials, avoiding unnecessary cost increases for low-carbon technologies and aiding the transition to a climate-friendly economy.
How India manages the climate change issue will have a large impact, both in South Asia and in the world. Though policy measures helped mitigate Covid, it is still likely to lead to greater poverty and inequality in a nation of 1.4 billion people. And the path of recovery will follow the path of the virus, with climate change complicating the revival process.
India needs to adopt a holistic approach to face the new realities. Enhancing the resilience of the entire system is the first and most necessary step. Changing our waste management and power generation systems are also critical in terms of adaptation to climate change. Our economy needs to shift from running on petrol and diesel to running on renewable energies, which we abundantly possess. Policy and institutional structures could be modified accordingly. Care should be taken to ensure that the interests of the most vulnerable sections of society are not compromised in any way due to these transitions.
Many of the key climate change issues are politically sensitive, but a measurable progress towards that end is essential. Policy needs to be effected, across multiple dimensions, to minimize the unacceptable socioeconomic inequality that has arisen in the recent past. Can the pre-Covid economic, political and policy environment return? Climate-related action offers humankind a ray of hope.