Energy, Environment, Writing

Building Back Better together—Potential for an India-UK partnership for a Green Transition

This article was co-authored by Terri Chapman

While many have pinned their hopes on technology to solve the looming challenges posed by climate change, it is clear that this alone may not be the silver bullet, and other processes will have to be invested into. For example, one of the most ambitious technological efforts to date is the Climeworks Orca plant that was launched in Iceland last month. The plant is illustrative of the inadequacy of the hunt for the technology elixir. The plant can remove 4,000 tons of CO2 a year, which is equivalent to the annual emission from just 800 cars. To scale this up and make it accessible to different geographies is the hurdle for such innovation. The timelines to do this are incompatible with the urgency of responding to global warming.

It is time to do what we have known needs to be done for decades—which is to reduce greenhouse gas emissions. These reductions are complicated by the fact that industrialisation is still underway in much of the world. Countries in the global South rightly seek space to grow. However, the template for that development—backed and funded by international financial institutions—is heavily reliant on high-emitting activities with only limited finance being deployed towards cleaner and greener options. At the same time, countries of the global North are dragging their feet and, in some cases, still peddling the idea that climate change can be responded to without dramatic changes in consumption patterns or significant financial reconfiguration. The “blah, blah, blah,” approach to climate change described by Greta Thunberg, is as she says, not working. Instead, countries around the world, especially high-income countries, must realise that they cannot negotiate or talk their way out of the climate mess created by them. Instead, it is time to get their political approach right and to deploy the largest quantum of financial resources ever mobilised to enable equitable green transitions. And there is another complication; this climate war chest will have to be invested into developing countries, which challenges the credit risks and cost of capital logic that have defined the post-War financial flows.

Countries of the global North are dragging their feet and, in some cases, still peddling the idea that climate change can be responded to without dramatic changes in consumption patterns or significant financial reconfiguration.

The COVID-19 pandemic has created renewed opportunities and invigorated the demand to make our cities healthier, make our social protection systems more robust, make our societies more equitable, and to respond to climate change meaningfully. More people now get what “systemic risk” means and the devastation caused by the pandemic should make governments more eager to address such risks.

The United Kingdom (UK) and India are well placed to respond to these new opportunities as partners and to craft a road map together for Glasgow and beyond. This is a partnership with much merit. The leadership for green transitions is coming from countries like India (the only G-20 country living up to its ‘2 degree’ commitments made at Paris) even as control over capital and technology resides in developed countries like the UK. Leveraging their specific roles and strengths, the UK and India can work together as partners in three areas in particular. These include human capital development, climate finance and funding of clean energy and infrastructure, and green and smart manufacturing.

Partnership in higher education

The UK is a global leader in education, knowledge, innovation, and research, while India is one of the largest consumers of higher education and is a market for research and innovation. Higher education enrollment, for example, has tripled over the last 20 years in India but remains at just 28 percent. The opportunity is defined by a simple fact—nearly half of India’s population is below the age of 25 and that demand for higher education is likely to increase. As a result, there is significant demand for UK education opportunities in India. In 2019, more than 37,500 Tier 4 student visas were given to Indian students studying in the UK. While this is a large number of students, in the larger context, it is insignificant and amounts to very little beyond building and nourishing an Oxbridge community in India.

Efforts under the new policy could create greater access to high-quality higher education in India, deepen UK–India academic and scientific collaborations, and create new research initiatives and more significant innovation.

India’s New Education Policy 2020 makes it easier and more attractive for foreign universities to establish branch campuses in India. Efforts under the new policy could create greater access to high-quality higher education in India, deepen UK–India academic and scientific collaborations, and create new research initiatives and more significant innovation. All of these can support broader efforts to foster human capital, skills, and knowledge in India, which are needed to transition towards a more sustainable, knowledge-based economy. UK institutions must re-calibrate their global role by investing in overseas markets and partnering to build the campuses of the future in the geographies that matter. Human capital and research efforts in India will enable innovation and work forces, which will be deployed at the frontlines of global climate and development efforts.

Partnership in finance

The second area of potential for the UK–India partnership is finance. Mitigating climate change will require enormous financial investments. This is much larger than the US $100 billion annual commitment made by the Annex II countries. For example, just for meeting its renewable energy targets by 2030, India will require around US $2.5 trillion dollars. The common but differentiated responsibility for financing green transitions posits that industrialised countries must contribute to (small amounts) and help catalyse large financial flows towards this ambition of New Delhi. However, many are falling behind even on their abysmally small commitments. Unless these trillions of dollars can flow to India and other developing countries, we will lose the climate battle and what unfolds will be unpredictable and consequential.

There are significant and unrealised opportunities for investment in ‘green transitions’ more broadly and at retail scale. Unfortunately, financial institutions are only modest actors in the green spaces in India. Transformative interventions at scale will require new thinking, innovative financial products and more favourable borrowing terms. It will be a crime against humanity if the country with the largest potential to curtail future emissions borrows money from the developed world at exorbitant rates. If Climate Risk is seen as a clear and present danger, cost of funding for climate mitigation projects must remain the same across continents.

Transformative interventions at scale will require new thinking, innovative financial products and more favourable borrowing terms.

The Indian Railway Finance Corporation (IRFC) issuance of climate bonds in 2017 is illustrative of the potential. The bond raised US $500 million from investors around the world. Municipal bodies in India, including the Indore Municipal Corporation (IMC), are also considering raising ‘green masala bonds’ to fund climate responsive projects. Green bonds offer an opportunity for countries like India to access new pools of international funding for green projects, for which there appears to be demand in the UK. In September, the UK issued its first sovereign green bond, raising 10 billion GBP, with demand of nearly 90 billion GBP, indicating the magnitude of appetite for such investments.

Additionally, regulations and perverse laws will have to make way and allow pension and insurance funds to invest into emerging economies that are the ground zero of the climate battle. These funds hold the largest global savings, mostly derived from fossil fuel age businesses and there is justice in their being the patient capital that is deployed in building clean and green infrastructure in emerging and developing economies. Retail finance needs innovation too. Buying a solar facility for rooftops in any market must be at a discount (financial costs) to the credit available for purchase of cars and air-conditioners. Bulk finance and retail finance have not yet signed the Paris Agreement; can London and New Delhi partner to change this?

Partnership in green manufacturing and value chains

The third opportunity is around supporting green and smart manufacturing and green value chains. Again, the pandemic has revealed the risks of over-dependence on any single country to supply critical goods. China, for example, owns the largest solar and wind manufacturing companies. India offers an alternative and an opportunity to diversify supply chains and make them more resilient. This is a chance to invest in and build up India’s smart and green manufacturing capabilities and create more robust supply chains for renewables and other green technologies. The R&D and innovation out of the UK has recently served only Beijing. It is time to rethink this monochromatic value chain. An India and UK innovation and smart manufacturing bridge is needed. The potential of such collaboration is illustrated by the AstraZeneca vaccine, for which R&D took place in the UK, with mass manufacturing in India at the Serum Institute of India – the world’s largest vaccine producer. India is also ramping up its green production and manufacturing capabilities in areas such as hydrogen production and the manufacturing of next generation battery technologies to support green transitions. Indian companies are scouting for partnerships; and it is time to put some political weight behind it. The Build Back Better World and the Quad and the EU and India partnership all support this.

India is also ramping up its green production and manufacturing capabilities in areas such as hydrogen production and the manufacturing of next generation battery technologies to support green transitions.

We must act to save lives, improve health, protect livelihoods, and safeguard resources for current and future generations. But the single most important motivation has to be the collective will to improve the lives of billions who have been excluded from the economic mainstream and, indeed, from any access to dignity and livelihoods. These constitute the largest cohort on the planet and their continued misery must not underwrite the green-tinted splurges of the rich world. The UK and India are in a position not just to act but to act as partners to change this.

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Writing

The unravelling of Pax Americana

The “war on terror”, launched two decades ago, epitomised the peak of America’s unipolar moment. The jets crashing into the twin towers were seen by most as an attack on the soul of globalisation, a project promoted and designed by the United States (US) and its partners in Europe. The near-universal commitment to this war, within the P-5 and outside, was a demonstration of America’s real power. That was a different time and a different world.

Since then, the US has been implicated in the global financial crisis of 2008. Its flawed domestic landscape and divided democracy have been a public spectacle for global audiences since 2016, from the swearing-in of President Donald Trump to that of President Joe Biden. Both individuals were and are legitimate leaders for only half their nation. America’s botched and self-serving response to the Covid-19 pandemic only hastened the decline of its ethical and moral positioning. Hot on the trail of these events, the hasty and bungled exit from Afghanistan is not just a political event, but part of a continuum, one that points to the momentous unravelling of Pax Americana.

The jets crashing into the twin towers were seen by most as an attack on the soul of globalisation, a project promoted and designed by the United States (US) and its partners in Europe.

It is not the US’s material power alone that has suffered; the institutions undergirding the liberal order are on shaky ground as well. The partisanship of its media and academia are visible to all. It is a nation where trolling as a way of life has replaced a broad national consensus. Morally tinged lectures about the international liberal order are likely to fall on deaf ears for those who witnessed the West’s callous indifference to billions in the developing world still in need of vaccines, or towards the thousands of Afghan interpreters who risked their lives to fight America’s war.

Those watching from capitals in Asia, gearing up for a new era of conflict and competition in the Indo-Pacific, will be even more sceptical. Some among them will be the first victims of the Taliban’s willingness to shelter and nurture terrorist groups. More importantly, the fall of Kabul will serve as a dire reminder of the fate that may befall them if they get mired in great power competition.

For instance, if one lived in Japan, going nuclear may be a sensible option. If you were a resident of an Association of Southeast Asian Nations (Asean) country, your neighbourhood bully would seem a more predictable and acceptable proposition. No spin can change this. America today is less attractive to many. This is a heavily mediated exit from a partnership and the damage is far greater than any of its other follies.

As these geographies rediscover one another, everything in between becomes a shared problem; refugee surges from countries mired in civil conflict, the climate crisis, and flows of finance, infrastructure and technology.

One could even argue that the US’s Indo-Pacific project has already faced its first significant setback. The idea that the US will now focus on China with greater intensity is naïve and suggests a poor understanding of politics. Land frontiers still matter and the US has ceded South and South-West Asia to Beijing. Chinese State media have lampooned and mocked the US’s withdrawal all week.

What role China will eventually play in Afghanistan is uncertain, but it has plans to fill the void that exists. The Chinese model is different and is based on the extraction of value from resources in the host country and providing lucre to the rulers who facilitate this. Tribes and feudal societies tend to work with this model better than the alternatives that seek to turn them into liberal nations and free markets. In the short term at least, China could well emerge as a powerful shaper of the economic and military arrangements in Af-Pak and West Asia.

This episode will have repercussions for the Quad, an ostensibly “counter-China” alliance in the Indo-Pacific. It is time to face up to some home truths.

First, for too long, policymakers in DC have relied on maps that mark the East Indian Ocean as the Indo-Pacific boundary. India’s perspective on Afghanistan, Pakistan, and West Asia has been dismissed time and again. This must change, or India will work with other arrangements to manage the threats that abound. The US must realise that dealing with the influence of China in Afghanistan and Pakistan are a core Indo-Pacific challenge. Ceding these to China defeats the Western Pacific project as well.

Countries have learnt to assess the US by what it does, not by what it says. Efforts to shape and design regions to suit their own narrow interests are likely to be resisted.

Second, even as DC learns to re-imagine the expanse of the Indo-Pacific, it must internalise that Europe and Asia are merging through the efforts of Beijing. As these geographies rediscover one another, everything in between becomes a shared problem; refugee surges from countries mired in civil conflict, the climate crisis, and flows of finance, infrastructure and technology. The US cannot afford to ignore this region if it is to remain relevant at the end of the 2020s.

Third, India will continue to assess the US as its most important partner. A declining superpower is easier to do business with. The Countering America’s Adversaries Through Sanctions Act (CATSAA) sanctions and sermons on “values” could be shrugged off more quickly. Countries have learnt to assess the US by what it does, not by what it says. Efforts to shape and design regions to suit their own narrow interests are likely to be resisted. Its reliability and trustworthiness will be measured as per its capacity to contain China’s rise without disrupting the determination of states in the region to seek growth and development on their own terms. A transactional America will now encounter transactional friends.

This commentary originally appeared in Hindustan Times.

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Over the years, India earned the epithet of a reluctant power in Asia — exuberant in its aspirations, yet guarded in its strategy. However, as the challenges in its immediate neighbourhood and beyond continue to evolve, India is today gearing up to embrace a larger role in the far wider theatre of the Indo-Pacific.

Forming the core of the ongoing global economic and strategic transitions are a rising and assertive China, an eastward shifting economic locus, and the faltering of Western-led multilateral institutions. These converge with domestic development and national security objectives to demand that India strive to expand its presence, reach, and voice both on land and in the sea in its extended neighbourhood. Today, New Delhi is actively seeking to create opportunities for mutual development in the Indo-Pacific, in the Arabian Sea and in Africa even as it engages like-minded nations in the pursuit and preservation of a rules-based order that promotes transparency, respect for sovereignty and international law, stability, and free and fair trade. In both these endeavours, the United States is an appropriate and willing partner. As Indian Prime Minister Narendra Modi stated in his address to the US Congress in 2016, “[a] strong India-US partnership can anchor peace, prosperity, and stability from Asia to Africa and from the Indian Ocean to the Pacific.”

The US has been a principal architect and the traditional guarantor of a liberal economic and maritime order in the Indo-Pacific. While the commentariat in the US and India might express apprehension at the idea of US President Donald Trump’s ‘America First’ strategy, this moment must be seen as an opportunity to rebalance the Indo-US relationship to reflect a real convergence of strategic interests, as opposed to an abstract engagement based on values alone and one that has disregarded the core interests of both countries.

Even as the phrase ‘free and open Indo-Pacific’ replaces ‘Pivot to Asia’, it is clear that the US will continue to play an important role in the region.

The US is acutely aware that disengagement is not an option when the contests of the region are, in fact, irrevocably moving both westwards and eastwards, and ever closer to its own spheres of influence. Thus, maintaining an influential presence and assets in the region effectively responds to its agenda. The US continues to retain an unequivocally large military presence in the Indo-Pacific. Moreover, Washington appears intent on finding ways to address shortfalls in its defence budget. The most recent defence bill specifically authorises the establishment of the new Indo-Pacific Stability Initiative to increase US military presence and enhance its readiness in the Western Pacific. As it remains an invested actor across the Middle East and in Afghanistan, and as it confronts an unrelenting North Korea, it must seek to empower regional like-minded nations such as India, which it recognises as having an “indispensable role in maintaining stability in the Indian Ocean region.”

US Secretary of State Rex Tillerson’s remarks at the Center for Strategic and International Studies a few days before his visit to India in the fall of 2017 is a testament to the continuity of the relationship: “The increasing convergence of US and Indian interests and values offers the Indo-Pacific the best opportunity to defend the rules-based global system that has benefited so much of humanity over the past several decades.” In a way, the title of his speech, “Defining Our Relationship with India for the Next Century”, should set the tone for the Indo-US relationship; and this new direction must not be influenced even by changes in leadership in the two capitals. It must first be imagined and then crafted as a multi–decade relationship that engages with the disruptions that abound in a multipolar world. This 21st century partnership must take into account each country’s economic trajectory, political values and strategic posture. The Indo-Pacific region will be the theatre in which this partnership will truly be realised. Both President Trump and Prime Minister Modi seem cognizant of this reality, and are intent on creating a new blueprint for this long-term engagement.

The terms of this bilateral cannot be limited to maintaining the regional balance of power. Rather, both countries, in concert with other likeminded powers, have a stake in enabling and incubating a peaceful, prosperous, and free Indo-Pacific. As these countries align in their desire to see a new regional architecture emerge, the following present themselves as the most crucial domains where a strengthened India-US The New India-US relationship can have deep and influential impact in a region that matters to the whole world:

Defence trade and technology

India’s designation as a ‘major defense partner’ of the US, and the Defense Technology and Trade Initiative provide a bilateral platform for defence trade and technology sharing with greater ambitions and at a faster pace. The ‘Make in India’ initiative strengthens scope for coproduction and co-development. The new appetite for business reforms is catalysing the largest volumes of foreign direct investment ever received by the country.

As India undertakes broader defence transformation initiatives, US defence companies can collaborate with New Delhi in its USD 150 billion military modernisation project. They can do this by jointly identifying the gaps and working together to equip Indian forces in the short run. This must be followed by cooperation on advanced technologies to help build up the country’s defence manufacturing base in the longer term.

Continuous progress on these fronts will enhance Indian capabilities, enable greater readiness of Indian forces, and level the playing field. Specifically, priority military hardware, technologies and areas for joint production need to be identified. Pending sales, such as that of the Guardian RPVs, need to be expedited, along with the micro unmanned aerial vehicle project. Further, the matter of quality and subsequent liability of equipment made in India through joint Indian-US ventures needs immediate attention. Additionally, the hesitation of US companies in sharing proprietary and sensitive technology is a concern that will need to be taken up on a case-by-case basis.

Maritime freedom and security

There is a rare moment of clarity in US and Indian policy circles on the importance of each other in this region. This is important if the countries are to act as “anchor of stability” in the Indo-Pacific.

It is time to begin conversations on new arenas of military cooperation, intelligence sharing, and strategic planning, to include advanced platforms like fifth-generation fighters, nuclear submarines, and aircraft carriers. Already, the two countries share a maritime security dialogue, which was instituted in 2016, as well as working groups on aircraft carrier technology and jet engine technology. They should be strengthened further and complemented by new working groups.

The annual Malabar exercise, which now formally includes a third partner, Japan, is another key feature of military cooperation, improving coordination and interoperability. Adding to these efforts are the Logistics Exchange Memorandum of Agreement, which will create maritime logistic links, and a white shipping agreement which promotes regional maritime domain awareness.

India-US maritime security cooperation is critical because it supports efforts that prioritise joint stewardship for ensuring freedom of navigation and unimpeded trade across a maritime common that is a major conduit for commercial and energy supplies, and is rich in natural resources, ecosystems, and biodiversity. Moreover, the Indian Ocean Region is extremely vulnerable to extreme weather events that are likely to increase significantly in the coming years. To address these developments, the US and India can cooperate to provide humanitarian assistance and disaster relief missions in the region.

Further, the two sides are committed to resisting the aggression that China has displayed in the South China Sea and elsewhere in the Indo-Pacific. Indo-US cooperation in the Indo-Pacific must also serve to affirm the principles of freedom of navigation and peaceful settlement of maritime disputes.

An expanded bilateral maritime partnership that involves transfer of technology to build India’s capacity in the Indian Ocean Region will help create a more stable and balanced security architecture there. This same partnership should explore new forms and formats of joint exercises and naval drills, such as anti-submarine warfare and maritime domain awareness missions, and encourage support for Indian leadership as “force for stability” in the IOR.

Blue economy

India and the US must also collaborate to promote a market-driven blue economy as a framework for growth and prosperity in the Indo-Pacific — home to bountiful hydrocarbon, mineral, and food resources, as well as burgeoning coastal populations.

India and the US can further elevate cooperation in marine research and development to create common knowledge hubs and share best practices. They can collaborate to develop mechanisms and foster norms that ensure respect for international law. The US can support regional collaboration in the Indo-Pacific to explore new and environmentally conscious investment opportunities in maritime economic activities and industries, such as food production and coastal tourism. Direct investments in Indian efforts, such as in identified coastal economic zones and the Sagarmala initiative, and participation in regional groupings like the Indian Ocean Rim Association, are two ways in which it can do so.

Effectively, the US can support India in creating a resilient regional architecture in the Indo-Pacific that places an emphasis on stability, economic freedom, growth and maritime security.

Connectivity

Today, states in the Indo-Pacific are in dire need of funds and expertise to improve infrastructure development and regional connectivity. Beijing has introduced its own project — the Belt and Road Initiative — through which it is investing in infrastructure initiatives across Eurasia and the Indo-Pacific. While connectivity is undoubtedly the primary aim of the project, it is increasingly clear that China seeks to expand its political and military influence in the region under the aegis of the BRI. To prevent the emergence of an Asian order inimical to the rules-based order, states must work together to forge a more inclusive approach towards an emerging regional architecture. This framework must be willing to accommodate everyone, including China, in connectivity projects from Ankara to Saigon, or the sea lanes seeking to link ASEAN with Africa.

For this to occur, pragmatic, democratic, and normative powers need to first create a political narrative within which Asia’s connectivity will take place. This narrative must underscore the importance of good governance, transparency, rule of law, and respect for sovereignty and territorial integrity. This can then be posited against strictly bilateral projects such as the BRI, which burden participating countries with debt and environmentally unsound projects. This alternative proposition to China’s BRI can then become the blueprint for connectivity and integration from Palo Alto to Taipei, Bengaluru to Nairobi, and Tel Aviv to Addis Ababa. The possibilities are endless and straddle hard infrastructure, digital connectivity, knowledge clusters, and value chains in
the Indo-Pacific space.

The India-US partnership has an important role to play in this respect. The American vision of the Indo-Pacific Economic Corridor supplements India’s Act East policy, and India-US cooperation in physical and soft infrastructure can link cross-border transport corridors; help create regional energy connections; and facilitate people-to-people interactions. Further, India and the US can cooperate as “global partners”, with US investment in Indian projects in Africa. Accordingly, the Asia-Africa Growth Corridor proposed by Japan and India can provide a common platform to all three states. Further, the US can nurture burgeoning regional partnerships between Japan, South Korea, Australia, and India, as these countries work towards building a consultative and collective Asian framework.

Digital connectivity, trade, and technology

Digital connectivity merits particular attention. After all, in the next decade, the largest cohort of internet users will emerge from the Indo-Pacific region. China is working aggressively to ensure that digital platforms in the region will be influenced by its own model for cyberspace premised on sovereignty. A major part of China’s BRI is the new “information silk road”, which facilitates investments by Chinese companies in South Asia’s internet architecture.

Accordingly, the US and India must cooperate to ensure that digital platforms, trade, connectivity and norms are shaped according to the democratic and open nature of the internet. To do so, they must create a framework that responds to developing-country imperatives such as affordable access, local content generation and cybersecurity. Already, Prime Minister Modi’s ‘Digital India’ programme provides a model for other states in the region to use internet-enabled technology to spur economic growth. India’s Aadhaar initiative, a unique digital identity programme, has already generated significant interest amongst South Asian states. American companies have increasingly sought to adopt standards and technologies to leverage this platform and build new markets in India. For example, WhatsApp has integrated with India’s unified payments interface to provide digital payments. Examples of other development initiatives are also abundant. Elsewhere, the Google RailTel initiative aims to provide WiFi at 400 railway stations across India by 2018.

India-US bilateral cooperation in using the digital as a tool for economic development and empowerment can be the template to connect the three billion emerging users in other developing countries in the Indo-Pacific and across Africa. As digital norms are institutionalised — whether pertinent to data flows and e-commerce, or related to critical infrastructure, defence, and public services — there is a real opportunity for India and the US to build and subsequently provide a model working relationship for the digital economy. Effectively, the US and India can propose a set of ‘Digital Norms for the Indo-Pacific’ that can be operationalised under their various dialogues and mechanisms for cooperation in the region.

Read here – https://www.orfonline.org/wp-content/uploads/2018/01/ORF-Heritage-Hudson.pdf

Books, Defence and Security, Indo-pacific, Non-Traditional Security, Research, Writing

The new India-US partnership in the Indo-Pacific: Peace, prosperity and security

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New technologies are radically transforming our idea of community – and subsequently statehood. How will future states look like? And how should they look like? Disaster researcher Malka Older, author of the highly acclaimed cyberpunk thrillers “Infomocracy” and “Null States” will discuss digital governance with Shoshana Zuboff. Since the early 1980s Zuboff’s career has been devoted to the study of the rise of the digital, its individual, organizational, and social consequences. She coined the term “commercial surveillance” and is now working on her book “Master or Slave? The Fight for the Soul of Our Information Civilization”. This final discussion about new forms of digitalized governance and its impact on the individual will be moderated by one of the world’s leading experts on cyber security Samir Saran, Vice President of the Observer Research Foundation in Delhi.