The climate crisis is a wicked problem. Solutions that resolve one set of challenges create policy conundrums elsewhere. India’s G20 presidency comes at a time when the crisis has turned particularly wicked. On one hand, climate-related extreme weather — the heatwaves and droughts in Europe, hurricanes in the United States, floods in Pakistan, or ocean temperatures being the hottest in 2022 — have shown that the assumption that the rich can escape and the poor will adapt is no longer
The climate crisis is a wicked problem. Solutions that resolve one set of challenges create policy conundrums elsewhere. India’s G20 presidency comes at a time when the crisis has turned particularly wicked. On one hand, climate-related extreme weather — the heatwaves and droughts in Europe, hurricanes in the United States, floods in Pakistan, or ocean temperatures being the hottest in 2022 — have shown that the assumption that the rich can escape and the poor will adapt is no longer true. At the same time, increasing energy insecurity is becoming a reason to question climate action. Over the past year, two narratives have emerged. One says countries have no option but to increase extraction of fossil fuels in response to rising energy costs; the other says the energy crisis is a trigger to accelerate our shift towards green energy.
Compounding both the climate crisis and energy insecurity is the economic growth challenge. Reviving the economy and responding to rising joblessness is imperative at a time when the World Bank says that global growth is close to recession in 2023. So, any response to the climate crisis has to deal with these three aspects.
A second grave concern is that the climate crisis exacerbates the lack of voice — of vulnerable communities, of generations yet to be born, and of the planet’s non-human species. Sustainable solutions must find ways to give voice to the voiceless. The G20 has to resolve these contradictions because the global macroeconomy depends on these countries, and decisions taken here will influence outcomes for those who are not at the table.
India is uniquely positioned to be a voice for the voiceless and a bridge between those who have resources and those who don’t. Its own energy transitions give reasons for hope. On one hand, millions of Indians have got access to modern energy, whether electricity or clean cooking fuel. On the other, India’s share of non-fossil fuel electricity capacity has grown to over 40%, becoming the world’s fourth largest renewable energy market. Being the fastest growing major economy — serving as a locomotive for the global economy — India’s economic decisions will be both contingent on and also influence the emerging energy security architecture. To make India’s G20 presidency count, four priorities are worth noting.
First, additional capital must be channelled at lower cost to regions that need sustainable infrastructure. This will be both a driver of growth and jobs, and also deliver higher returns on investment. But it is not easy. Multilateral financial institutions have failed to de-risk investments at scale or be creative on how to leverage balance sheets to crowd in more private investment. This will be an important area of reform, which, if enacted, can result in additional capital flowing to the Global South without significantly impinging on the fiscal resources of the Global North.
A second priority is to increase the resilience of communities and economies against climate shocks. Increasing resilience is not just about disaster response. It is being able to bounce back and re-establish dynamism in the economy and reignite livelihoods. To do so, mere catastrophe bonds will not suffice. Missing in the global financial architecture is an insurance cushion against compounding shocks. Natural disaster clauses in sovereign bonds can become one source of financing. Leveraging special drawing rights to capitalise a global resilience reserve fund could be another.
Third, secure the fuels of the future. At a time when we are grappling with an energy crisis triggered by the Ukraine war, it is easy to forget that there are no rules to govern the secure supply of clean energy technologies, materials and products. Setting standards, ensuring fair trade, and co-owning new intellectual property could be some of the principles by which the G20 can create an energy-secure global green hydrogen economy. Similarly, conversations on deepening interdependence and building resilient renewable energy supply chains can reduce the risk of protectionist barriers rising in major economies. Access to critical minerals for the energy revolution or cooperating on advanced cell chemistries for battery storage are examples of where G20 countries can find common purpose and deliver coordinated action.
Fourth, bring the energy transition closer to people. A sustainable planet must also be socially and politically sustainable. This means the energy transition should also deliver new opportunities. The potential for using distributed renewable energy (DRE) combined with the possibilities emerging from the digital revolution can create markets worth hundreds of billions of dollars — if the right regulations and the right kind of financing flows to the “bottom of the pyramid”. Equally, India’s mantra of Lifestyle for Environment (or Mission LiFE) must nudge individual behaviour and also enable new markets in the circular economy, for instance, in access to energy-efficient appliances, smarter homes, sustainable public mobility systems, and more inclusive cities. Such changes in the quality of life, especially for vulnerable communities, can usher in the political sustainability needed to maintain momentum. The enablers of these transitions, in the form of technology, finance, a new circular economy and improved resilience, will build trust that is missing in the multilateral conversations around the climate crisis.
The G20 matters because it would matter even if it didn’t exist. The largest polluters and economies have a responsibility — not just because of the actions of the past but also for what we build in the future. India’s presidency is an opportunity to demonstrate moral climate leadership.
Dr Arunabha Ghosh is CEO, Council on Energy, Environment and Water (CEEW). CEEW is a knowledge/ strategic partner to several government ministries for India’s G20 presidency
The views expressed are personal
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