OffStumped For All Things Right of Center, Bringing a Right of Centre Reality Check to Indian Politics, News Media Reporting and Opinion through Blogs and Podcasts.

A report has been released commissioned by UK Chancellor Gordon Brown and authored by Nicholas Stern, former chief economist of the World Bank on Global warming and climate change. The Stern Report as it has come to be referred to, has been called by  British Prime Minister Tony Blair as the final world on why the world must act now on climate change. Tony Blair specifically singled out America, China and India calling for climate change to be on top of the political agenda. Climate Change has been a politically divisive issue in the United States with the conservative Republicans and their fellow talk show hosts like Rush Limbaugh taking an extreme position bordering denial. At the other end of the spectrum are the green extremists who have made a sin of driving sports utility vehicles. Hovering in the middle are folks like Tom Friedman trying to square the economic and environmental imponderables.

In India however the politics of Climate Change is marked by its absence. Offstumped examines the economic implications to India hypothesized by the Stern Report and the likely political implications.

Offstumped has looked at the 700 page report divided into 6 parts.

The report starts with examining the current approach to Climate Change covering the science, economics and ethics. It then goes onto hypothesize the impact of Climate Change on the people of the world, economic development including an economic cost model. The bulk of the report is dedicated to how the change can be mitigated, what costs it entails and what policy responses must be advocated. It closes with a call for International Action. The Indian Express carried an article today summarizing the key economic predictions for India. http://www.indianexpress.com/story/15731.html. Some key implications are warmer climates in Northern India, increased monsoon rainfalls leading to flood and drought imbalances. Rising sea levels, increased cyclone intensity and frequency and Crop losses, especially wheat leading to GDP losses and spread of diseases like Malaria.

Stern’s presentation to the British Cabinet had some interesting remarks specifically on the economics of the issue.

“When people do not pay for the consequences of their actions we have a market failure”

Stern goes on to explain the scientific model first in terms of the correlation between ppm of CO2 and Green House Gas emmissions and the resulting temperature change a few years/decades down the line. If we were to continue with a Business As Usual attitude according to Stern the global temepratures were likely to go up by 4 to 5C within the next 100 to 150 years. This according to Stern would be a transformative change on the same scale as the Ice Ages. Stern then goes onto explain what it would mean to stabilize the emissions to a manageable level like 550 ppm which would require 60% of all power to be generated from Non-Carbon sources. We have already seen the likely costs to India above. What would it take to mitigate this ?

According to Stern about 1% of the GDP every year. Like a one off 1% price increase every year to grow and to be green. How does Stern propose to achieve this – by a 3 strand policy comprising of a Carbon Price which one must pay to incentivise decarbonization, Technology alternatives to Carbon, making markets work to influence behavior that leads to decarobonization. Stern also advocates for International Emissions Trading and for bringing India and China together to make International action succesful. Stern refers to the 11th 5 year plan being developed in India and its ambitious energy efficiency goals. Which brings us to the question of how does all of this shape politics in India if any ?

Events in the last many months in New Delhi, Mumbai and Bangalore have once again reminded us of the lop-sided nature of Urban Management our mega cities have been cursed with. The daily street protests in Delhi are a stark reminder of how far away our Urban politics is from any kind of rational debate. Politicians across the board from the Congress to the BJP have wilted to pressure groups in Traders and small businesses. They are bending over backwards to accomodate blatant flouting of urban zoning norms and illegal businesses  The current political debate in Delhi is not unlike the earlier during the 90s on court mandate adoption of Compressed Natural Gas, CNG and before that on unleaded petrol. In each of these three occassions what we have is Executive delinquency creating the problem, Judicial Activism attempting to fill the vaccum which eventually leads to grudging adoption as in the case of CNG and unleaded petrol or Legislative perversion as we are now seeing in Delhi with the the BJP and the Congress conspiring to overrule the courts.

Public debate on this subject in India is usually marred by an all pervasive belief in the Government as being the sole cure to all problems. From pollution to urban management it should now become amply clear that big government and centralized bureaucracies do not deliver. Unless local communities become responsible and take ownership for their civic management we will continue to see a repeat of what is happening in New Delhi. The Traders of New Delhi who have taken to the streets have reminded us that myopic considerations of the immideate cloud our collective judgement on the long term. Be it in our response to terrorism marked by the surrender in Kandahar or in our response to urban management now marked by the surrender to the Traders. In either case as Stern rightly put it, the economic consequences of our actions have not been paid for hence will come back to haunt us.

Offstumped Bottomline: The science of the Stern Report will continue to be debated for some time come. The economics of the Stern Report however should be reason enough for action. Politics of the day in India continues to cloud our judgement as exemplified by the Traders Bandh in New Delhi. Unless communities take responsibility and ownership for their quality of life, pressure groups will hijack public debate. The BJP’s advocacy of the Traders at the cost of quality of civic life in New Delhi is shameful. People must pay for the consequences of their actions. New Delhi must set an example starting with its Traders.

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