By Rajan Bharti Mittal
Leaders from across the world gathered in Durban in December last year to find common ground on what is currently the most important challenge facing humanity: climate change. With virtually no headway made since the Kyoto Protocol, there is precious little time left for all nations to act before we reach the point of no return. Governments across the world must give a clear signal that they are committed to a legal deal on climate change that puts the world on track to a low-carbon economy.
While both developed and developing nations put forth their arguments keeping in mind their respective economic interests, it is important to note that businesses can, and must, play a vital role in building a greener world. Today, businesses across the world are committed to green growth and building a 'sustainable' global economy as it will ensure their future growth. There is a unique opportunity for businesses from developed and developing nations to collaborate and develop low-carbon technologies and business models.
Low-carbon economy is an area with immense investment potential, but if that investment is to come at the speed the science says is necessary, then certainty is the key. At Copenhagen and Cancun, countries agreed to mobilise $100 billion a year by 2020 to support developing countries in their fight against climate change. Businesses want to play a role in delivering this finance, which won't all come from public funds. Businesses, therefore, need governments to reassure them that their policies will support that investment.
India has rightly asked for an 'equitable' deal on curbing greenhouse emissions, given the fast-growing energy requirements to support its economic expansion. India is also aggressively pursuing development of renewable and nuclear energy sources. However, there is immense scope for India to emerge as a global leader in the development of a low-carbon global economy, particularly through low-cost technology. Developing this capability is more important for India, given its vast population that may be affected by climate change.
The Indian government must take some bold initiatives in this regard and make businesses a partner. A possible solution would be creating an ecosystem that promotes a culture of collaboration between governments, academia and businesses in this area.
This must be preceded by an environment that can help bring in much-needed technology and even finances into such an ecosystem.
Some steps that the government may consider in this regard:
Removal of barriers to capital flows to stimulate investment in the low-carbon economy: Both governments and businesses across the world are willing to invest in a green future. India must attract green investments and technologies by cutting red tape and incentivising investors to offset low or no-return scenarios: whether tax breaks, fast-track clearances or favourable access to land/buildings or refinement of local content requirements. It would be important, however, to ensure that such instruments ensure benefits such as transfer of technology and reward operational performance of the technology, rather than simply its installation.
Development of joint demonstration projects and R&D: Be it public-private partnerships or collaborations between businesses from India and advanced nations, such projects would spur further business collaboration across sectors such as transport, manufacturing or services, etc, raise awareness of competitive technologies and highlight the investment opportunities available to potential investors.
Further, India has a vast pool of highly-skilled science and engineering graduates. Building strong linkages such as joint R&D programmes between businesses and academia from both sides should not be a big challenge. The ultimate aim should be development oflow-cost technologies that can deployed across the globe.
Effective regulatory frameworks: Business perspectives are invaluable in understanding the impact of regulations and issues surrounding enforcement. Clearer policies and simplified regulations that encourage shift towards a low-carbon economy should ensure government objectives are met and, at the same time, it maximises opportunities for innovation, trade and job creation.
(The author is vice-chairman and managing director of Bharti Enterprises, and co-chair of UK India Business Leaders Climate Group. Views are personal)