The ongoing pandemic has reshuffled issues of global pertinence to a great extent. Climate
change, a favorite frontrunner, has been superseded by the battle against the novel coronavirus.
More than just a shift in priorities, this change is now transcending into a feedback loop where
the latter is starting to feed into the former. Water demand for hand hygiene is pushing the limits
in water-stressed regions. Plastic industries are emitting ever more pollution as gloves and masks
become mandatory. Our battle against the current public health emergency might just be
aggravating the climate emergency.
Some have even gone a step further and said that in some ways the pandemic is a dress rehearsal
for dealing with climate change. The low-probability scenarios presented to institutions around
the world due to covid are a test of resilience and capacity-building, both extremely crucial for
dealing with the unpredictability of the climate crisis.
Ergo, in order to build back better, we need to ensure an all-encompassing recovery process
underscored with an urgency for climate action. But if we were to evaluate stimulus packages of
each country against this prerequisite, perhaps they would all seem heedless and deficient, for
these payouts serve as short term band aid solutions to complex interlinked web of issues.
Consider India and its much celebrated 20 lakh crore package (US $266 billion). One of the
pathways adopted to spur economic activity has been commercialisation in key sectors like
railways and coal mining. Moreover, the stimulus does not incentivise investment in cleaner
fuels nor does it establish emission norms for industries. It's no surprise the country’s stimulus
has been ranked as the fifth worst on the sustainability index in the world.
Centre for Science and Environment (CSE), a research and advocacy organisation based in New
Delhi, calls for a ‘green’ stimulus package which encapsulates a blueprint for future action on
sustainable environment. It outlines a host of reforms on emission reduction through vehicular
pollution, mining industry and public infrastructure.
As businesses undergo an influx of change in the light of the pandemic, it only makes sense to
channelise recovery for upcoming challenges, mainly the climate crisis. With the help of a
‘green’ stimulus, we can ensure a pro-environmental economic recovery by aligning our policy
responses with the requisites of sustainability. Here are some recommendations.
Green infra
The International Finance Corporation (IFC) recognises an investment potential worth over US
$3 trillion for green investment in India. Realising these prospects, the government has made the
initial push with the right policies.
For instance, green mobility is on its way to reality. Multiple state governments have launched
schemes for electrification of public transport. However, supply chain disruptions and a dip in
demand has pushed commercial sales of electric vehicles to a back seat. To combat dependence
on imports, the government should seed fund R&D in alternatives to non-lithium ion batteries
(potassium ion batteries show promise). The government can stimulate demand by offering
income tax cuts and GST concessions to electric vehicle owners as well as setting up charging
stations on highways.
Energy efficiency projects can be launched for all public service buildings including hospitals,
schools and offices in a phased manner. Further, the government can mobilise funds from
philanthropists and multilateral institutions for a ‘Green Infrastructure Fund’ to help cities
withstand damage from increasing incidences of extreme weather events like cyclones, wildfires
and floods as well as slow-onset events like sea level rise and warming temperatures. The fund
can source jobs of greening common spaces, dedicating urban lands for city forests, constructing
cycling lanes and pedestrian paths. It can also be used for maintenance of a structured green
database of quality climate and geospatial data outlining the city-specific green infrastructure
demands.
Renewables
India has become the lowest-cost producer of solar power with costs dropping by almost 80 per
cent in the last decade. This can be expected to reduce further as several non-banking financial
institutions embrace wide-ranging models of energy finance like Green Window. However, the
coronavirus pandemic has resulted in several impediments with respect to supply chains, labor
and financing which, if ignored, can jeopardize our international commitments of installing
electric capacity from non-fossil fuel sources by 2030.
With the solar industry battling severe shortage on the production front, it only seems logical to
ramp up domestic manufacturing fostered by an elaborate political framework which offers
scalable and innovative pathways for price competitiveness and profitability. Policy intervention
in the form of provision of tax reliefs and subsidies, development of a nodal agency overlooking
domestic production and creation of special solar zones can be game-changing. This will not
only reduce import dependency resulting in massive foreign exchange savings but also reemploy
workless labor.
Expanding manufacturing obviously entails high financing costs. The need of the hour is to boost
liquidity enabling the industry to tackle operating costs in the current slowdown. Massive
subsidies currently dedicated to the fossil fuel industry should be rechanneled to clean energy
initiatives. Long term measures can be designed around moving from debt-equity financing
model to innovative financial instruments such as green bonds as new banks enter into the green
market.
Project management
Deemed jobless from the lockdown, countless migrant workers had to leave cities and retreat to
their villages. While this may spell trouble for urban industries, it's an opportunity in disguise for
mainstreaming climate awareness in rural areas. The readily available labor can give a strong
boost to climate resilience and renewable energy projects.
The ‘Dhara Vikas Project’ undertaken with Mahatma Gandhi National Rural Employment
Guarantee Act (MGNREGA), is one such project which aims to sustainably manage springs in
drought-prone regions of Sikkim, an Indian state.
The government should establish a market for climate initiative projects in tandem with the
national employment scheme for covid-affected migrants, Garib Kalyan Rozgar Abhiyaan. This
can be exclusively focused in areas with environmental vulnerability, plentiful labor and
deficient electricity infrastructure. In addition, it is imperative to set aside a budget for financial
support as organisations operating at the ground level do not enjoy much fiscal liberty. For
instance, solar module vendors can be mapped with hospitals or schools of a region where there
are prospects for energy efficiency.
Crisis-resilient agriculture & farmer income
The coronavirus outbreak has severely dismantled the Indian agri-economy with far-ranging
effects on commodity prices, employment and farmer income. This has spurred several structural
reforms in the agricultural sector. However, cumulative pressure from rising population,
changing climate and plummeting exports call for a coordinated response in order to ensure
long-term food security and farmer livelihood.
To start with, the union Budget2020 outlined prudent steps for overall agricultural growth but
allocated meagre amounts to agri R&D. A higher chunk should be allotted to the states for the
same. Access to formal credit facilities has been emphasized not only in the second tranche of
the stimulus but also through the approval of the ‘Agricultural Infrastructure Fund’ by Prime
Minister Modi. However, public interventions have a history of being idealist existing only on
the surface. Initiative on the community level shows potential for change as self help groups
(SHGs) have excelled in their fight against the ongoing crisis. More focus should be placed on
amplifying such collective ideas across rural communities through extended financial and
institutional support.
There is ample scope for leveraging technology in connecting farmers directly to communities to
ensure a better commodity price and secure demand. For some districts of Maharashtra, this is
already a reality because of the initiatives among the farmer community. Agritech start-ups stand
as an example of integrating modern technological solutions to value chains. The government
can focus more on instilling an enabling market infrastructure and appropriate institutional
design for such firms.
Currently, the safety net offered to the farmer community in an event of a crisis is far from
adequate and reels from implementation lags. Data on government’s flagship welfare schemes
such as PM-KISAN and PM Garib Kalyan ensuring food and financial support reveal millions of
beneficiaries still await their entitlements, many of whom are single women farmers. This is a
serious concern calling for better synchronisation and accountability between the centre and
state. An incentive structure for all the state actors involved can boost the effectiveness of
welfare schemes. Conversely, beneficiaries should also be equipped with redressal mechanisms
if the state fails to deliver.
All in all, the stimulus relied on major structural reforms for carbon-intensive sectors to revive
the pandemic-hit economy. A little rethinking with respect to green infra, clean energy, climate
projects and agricultural resilience can lead to better economic and social payoffs in the
long-term.
Along with the government, a lot of onus rests on society’s shoulders as well. A number of
behavioural changes can be expedited which correspond to a socially optimal future. Corporate
policies mandating work from home for a portion of the year, boosting domestic tourism to curb
international travel, provision of public broadband by telecoms and responsible investment in
social issues have a potential to affect change.
Global leaders are urging nations across the world to align sustainability objectives in their
pandemic responses. A recent study by Oxford Economics suggests a 90 per cent shrinkage in
Indian GDP due to the climate crisis over the next century. Some effects, ranging from cyclones
and floods to locust attacks and wildfires, have been witnessed all in a matter of a few months.
When it comes to choices, individuals often act on immediate demands and discount the future.
A nation cannot afford to act on impulses; rather it thrives on a balanced judgement of apparent
close threats and seemingly distant worries.