Building a new energy profile

Carbon emissions may be about to make a return to the climate change policy arena following United States President Barack Obama's speech pledging carbon caps for the US power sector and further support for renewables. On the face of it this hardly seems to amount to much. The US power sector, thanks to a wave of cheap shale gas, has been shifting away from more carbon unfriendly fuels like oil and coal.

Partly because of this, the US has seen its carbon emissions fall nearly 12% since 2005. Obama's announcement will lock in these benefits, ensuring the sector cannot return to coal in the future. What is important is Obama's willingness to signal that he is prepared to push forward climate change policy once again. Washington is littered with the skeletons of failed carbon legislation going back to the US Senate's rejection of the Kyoto Protocol and including Obama's 2010 attempt at a cap-and-trade Bill.

He is still wary of legislation - all his new proposals will be administrative decisions. But the US president has been buoyed by a recent wave of natural disasters that have struck his country - feeding public concern about climate change. The shale gas explosion has given him a green option that imposes no financial cost to the economy.

There is little evidence the US will seek to revive the moribund United Nations climate change negotiations. But secretary of state John Kerry had sought to re-sell the idea to India that it needed to be more proactive about reducing its carbon emissions. Obama understands that the US must first put his own house in order before he can start preaching overseas.

By promising to help emerging economies with renewable and shale technology, the US hopes to export its own new energy profile overseas - and profit from it as well. China, the world's largest carbon emitter, is already investing heavily in the field.

India already has a number of energy dialogues with the US, Germany, Japan and other countries. And its investments in renewables, nuclear and, now, even shale are not inconsiderable. But India has largely fallen silent in the international arena. Ironically, India's greatest contribution to climate change today is the manner it has hopelessly mismanaged its own power sector, which now has thousands of megawatts of generating capacity idled by a lack of a sensible pricing policy.

Hopefully, once this is sorted out New Delhi can take a more ambitious look at carbon emissions reductions and energy efficiency. As the US has shown, climate change policy today is about domestic actions. This should be the sort of framework that India would prefer to work within.


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