by Samir Saran
May 13, 2010
in: The Financial Express

Over the last decade, climate narratives have been shaping social, political and economic beliefs—resulting in climate ideologies spread not dissimilar to religion. Like most religions, these frameworks have their share of rigidities, with each having discovered the ‘chosen path’ that offers a righteous response and lacks reflexivity. Interestingly a ruling by a UK court in November 2009 drew parallels between an individual’s views on climate change to his religious and philosophical beliefs.

The challenge of arriving at a common understanding of climate change and a common response to it is, therefore, akin to discovering a common religion for humanity. If climate is a religion, its holy script is dominated by the description of the holy trinity of finance, technology and equity. Equity remains in the realm of the spiritual; and concrete proposals towards a world that shares prosperity are confined to classrooms and social scientists even as the economists and technologists work to carve the new world.

Nonetheless, responses from each nation or a grouping seek to address these three central features in their arguments. The EU, for instance, believes that the European Trading Scheme and a carbon price would curtail emissions and serve the purpose of equity by redistributing capital through flow of funds from the developed world to the emerging and developing economies. The flaw with this is that the redistribution of wealth is only among entities located in different geographies with complex ownerships that could put the IPL team structures to shame. Critics portray this as a transaction among elites and the cost of adaptation, poverty alleviation and other development challenges remain at the periphery. And this is where the conflict lies, in the belief system of the EU and the imagination of its populace that it is the liberal market framework that offers the most efficient mechanism for redistributing wealth, historical evidence notwithstanding. The framework for allotting emission allowances and the trading of these alongside external carbon credits would need serious overhaul even if they were to have a nominal impact. Perhaps the proposal to auction EUA post 2013 would also enable national governments in the EU to commit some of the proceeds towards the adaptation challenges, state of their economies permitting.

The emerging and developing economies, however, make the case for direct fund transfers into their own treasuries that have historically (in most cases) been shown as incompetent in delivering development and governance to the millions they seek to serve. Do they have capacities to make use of the large cash transfers they so seek? And would they be better served in incentivising regulated markets and evolving state-centric capitalist frameworks for the same purpose? The cause of equity would be served only if the emerging world is able to receive funds from the complex maze of overseas funding mechanism and then enhance internal efficiency of delivery arrangements.

Technology continues to vex the global debate on climate and perhaps is the real non-negotiable, if global agreements and accords that emerge from climate conventions and summits are the frame for analysis. Over the last two decades, the language in these international documents has remained ambiguous on technology and the only certainty is that equity as an argument is not compelling for ceding intellectual property for the developed world. Pronouncements from President Obama and policies and legislations in the UK and EU clearly position green technology and high-tech industries as the basis for re-industrialisation as well as economic revival. The lavish incentive packages for low carbon business and research and the sheer subordination of policy making to corporate interests in this sector demonstrate the desire of the OECD economies to lead the race to the top in this low carbon game. The odds would have truly been stacked in their favour but for the economic meltdown.

The institutes of higher education, research and development in the developed world continue to lend them a distinct edge. They also benefit from a steady stream of the brightest minds from Asia, Latin America and Africa, who after acquiring basic education assist in furthering the research in these institutes for want of similar professional opportunities at home. Thus, even in this post-colonial world, the West continues to benefit from the resource provisions of its former colonies. Thus large pool of human talent backed by unmatched funding assists these countries to incubate innovation and invention, the two pillars of the new economy.

Much of the developing world is still caught up in the semantics surrounding technology transfer. For its sake, it must resist the temptation of being lured into conditional (indirectly priced) technology handouts and post-its-prime technology transfers. It must also realise, as the Chinese have come to realise recently that intellectual property vis-à-vis climate is not a rigid defined product but is more about tacit human knowledge. The centrality of human resources needs to be over-emphasised here. In the last 5 years, Chinese efforts to attract overseas Chinese back to its industrial and research institutes have gained momentum. Through landmark programmes such as the ‘Thousand talents programme’ it is rightly pricing and attracting human intellect located overseas.

It is also determined to tap into the Chinese diasporas that are part of the research and technology industry. Their policy initiative ‘Chinese serving China’ seeks to reverse the traditional flow of knowledge to western shores. The results of these initiatives are bearing fruit and there are reports that tens of thousands of non-resident Chinese have returned home; the process no doubt aided by the financial crisis and shortage of research funding in the US and EU. But the key learning here is that the Chinese are pricing the human capital right and offering salaries far in excess of their business as usual salary structures. They, unlike India, have realised that human resource is at the core of the IPR chain and they are now unwilling to reduce talent and merit to a UGC prescribed salary handout that India seeks to attract and retain talent with. A recent management reports has cautioned that US hegemony in scientific innovation can no longer be taken for granted. China will be investing over half a trillion dollars on green technology research in the next decade and furthermore has committed to deploy 2.5% of their GDP annually by 2012 towards R&D in line with the OECD levels. As a part of the economic stimulus China deployed $221 bn towards the green economy as against $112 bn by the US. Though much of this was for rail transport and water infrastructure, significant efficiency innovations and applications were in the mix as well.

India is committing to increase its outlay for research and is looking to be at par with OECD standards in a decade. However, outlays alone would not help. The systems that feed into the research agenda would need to be overhauled as well. Both China and India would need to improve the quality and spread of education, health of the population, social indicators and infrastructure will all need to be best in class if the environment for innovation needs to be created. There is great equity in this endeavour. Else we can live the dictum that constraint incubates innovation and hope for the ‘Slumdog Millionaires’.

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