May 2013 saw carbon dioxide crossing the 400 ppm mark in the Earth’s atmosphere and over the last decade we have witnessed a frequency increase in climate change induced natural disasters. The Indian economy, which is facing significant growth challenges and stiff competition from other developing economies like China need to take into consideration new growth dynamics in the wake of natural resource constraints and the externalities of polluting industrial practices which may deliver short term results, but threaten long term economic sustainability. Low carbon economic growth is pegged at the next industrial revolution and may holds the answers to India’s sustainable yet competitive economic growth conundrum.
The developing world and India in particular need to look beyond the current industrial practices which not only improve resource and fuel efficiency but also reduce carbon output. Low carbon growth as a concept includes enhancing energy efficiency in a company’s overall operations and services, along with using electricity, thereby reducing the overall carbon-footprint. It entails a range of activities that need to be undertaken to slow down the release of carbon into the atmosphere including:
- The reduction of emission by on account of increasing efficiency in current processes
- The absorption of carbon using traditional methodologies and artificial techniques to reduce the carbon level
- The support for carbon reducing activities including technology financing and carbon trading
Here it is essential to understand how Business as Usual (BaU) is different from Low Carbon (LC) growth trajectories. BaU refers to the changes that industry is making or will make on its own to reduce energy consumption. The driver for these changes is the increasing cost of energy and the industry adapting to better technology to reduce their cost and stay competitive. On the other hand for LC the push has to be from the policy side where the governments provide incentives and levies penalties on the industry to adopt the LC growth path. While the BaU assures some reduction in GHG emissions, LC mode has GHG emission reduction as its means for business growth.
India is at a unique juncture in its growth trajectory. While the immediate GDP growth rates have faltered to around 5-6% in the wake of the global economic crisis and the Indian political scenario, the long term prospect of the Indian economy remains promising. Backed by an ever increasing middle class and the relatively younger population, consumption and production both have a steep growth path in the Indian economy. The question is, what kind of production and consumption should India be planning for? Resource, energy and carbon efficiency need to be the leading strategies for the both the activities to ensure some sense of long term triple bottom line sustainability.