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Parth Bhatiaamp; Navroz K. Dubash
The most recent release IPCC Report on mitigating Climate ChangeIt contains several headline-grabbing messages, including the challenge of limiting global warming below 1.5 degrees Celsius, the opportunity from falling technology costs and the potential for demand side actions. The report offers many lessons from global experience that could be useful in India, beyond these headlines. The idea of policy bundles is the most prominent.
For most readers, the term ‘Climate policy’ is likely to evoke carbon-focused instruments such as carbon taxes, and green subsidies. However, there are other options. IPCC report treats climate policy in a much broader sense – because emissions outcomes are often shaped by a wide range of policies, any policy that has a direct or significant indirect impact on emissions mitigation can fall within the ambit of climate policies. This does not mean that all policies should be determined by their impact on emissions. However, it is possible to consider both development futures as well as mitigation in a useful way.
This definition also includes energy efficiency standards for industry, green building codes and air pollution policies for cleaner powerplants. It also includes agricultural policies that lower electricity demand and policies that lower water consumption. Climate mitigation can also be achieved through macro-economic policies like green quantitative easing or institutional reforms that facilitate land acquisition. Climate policies are available in many forms and are distributed across different sectors. The IPCC report suggests that governments have a wide range of mitigation tools. Creative policy-making can be used to achieve both development and climate goals simultaneously.
To do so, governments could usefully consider designing ‘policy packages’ or ‘policy mixes’ for achieving broad strategic goals. What is a policy package? A policy package is a collection or combination of policies instruments and governance structures that is designed to achieve a single policy objective. In practice, policy mixes are often created by accidental layering of policies onto an existing framework. The IPCC found that policy packages can be transformative if they are designed with care and pay attention to interactions between instruments and governance factors. This is especially true to spur technological development and adoption and to ensure equity and justice in policy outcomes. The concept can be explained by a few examples.
Brazil’s comprehensive approach for preventing and controlling deforestation in the AmazonIn the early 2010, there was an increase of protected areas, better satellite-based monitoring, and a link between public credit and deforestation rate. Additionally, new institutions were created such as an interministerial committee for environment enforcement, new legislation for land regularization and a REDD+-fund. The German energy transformation (the Energiewende), was a policy mix that supported distributed energy. Renewable energy (e.g. Energy (e.g. The European Union’s package of policies for net-zero energy buildings includes building and appliance standards, labelling programs and long-term national renovation strategies against a background of city sustainability plans and an expanding emissions trading system (ETS). Notably, the EU ETS generates revenues that allow low-income families to access renovation financing.
A policy package approach could be a way for India to increase the acceptance of transformative actions. A policy package approach can help a country balance cost efficiency with other relevant goals, especially equity, and allow for a more equitable approach to climate policy. It is possible to achieve greater political feasibility if policy packages include climate objectives that are linked to larger developmental goals. For instance, the ‘Gati Shakti’ approach announced in the budget could embed low-carbon transport infrastructure within the overarching goal of enhancing transport services and optimizing freight logistics.
How can India leverage policy package for a coordinated and robust climate response? First, think about creating comprehensive policy packages that address each major transformation on the road to net zero. A package to support the transport sector transition might include improvements in urban design and enhanced public transport; while a package supporting industrial transformation would include short-term efficiency measures as well as long-term technology support such for hydrogen production. This would go beyond a fragmented approach. To complement sectoral climate policies, sustainable development should also be considered in major policy shaping moments like the annual budget, economic stimulus package, and large-scale financial grants. This would increase the complexity of the policy process. The advantage is that strategic gains from anticipating economic opportunities and the potential for finding synergies among development and mitigation would be internalized in decision making.
Policy packages could transform India’s approach to climate action. To fully leverage this idea, it is important to think in terms of long-term changes, integrate climate thinking into the broader policy language, and increase institutional capacity.
[This piece was written exclusively for ETEnergyworld. Parth Bhatia is an Associate Fellow at the Centre for Policy Research and Contributing Author for the IPCC Working Group 3 Report on Mitigation. Navroz K. Dubash is a Professor at the Centre for Policy Research and Coordinating Lead Author for the IPCC Working Group 3 Report on Mitigation]
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