'A View from India' in Towards a Workable and Effective Climate Regime

India’s primary concern in the climate negotiations is to avoid having to make commitments it may come to regret. While this is a concern for all countries to some degree, it is much greater in a low-income country because the human and political cost of slowing economic growth is enormous at low income levels. Fortunately, the need for secure energy access, and to a lesser extent, local environmental concerns, are driving Indian policy in the direction of a massive expansion of renewable energy. While continuing to exhort richer countries to own up to their responsibilities to finance mitigation and adaptation, India can be expected to propose mitigation actions that are consistent with domestic policy priorities. These include ambitious near-term renewable energy targets that have already been announced. India should also announce gradually rising taxes on coal and oil. These would be an extension of existing programmes such as the coal tax and of policies aimed at fiscal rationalisation such as the recent elimination of the subsidy to diesel and its replacement by a net tax. Revenue from the coal tax should be used to create a flagship programme to replace power subsidies to farmers with capital subsidies for solarpowered pumps. Rich countries should be asked to meet their financial obligations for mitigation assistance by contributing via offsets from their carbon trading programmes. The creation of a credible mitigation programme to which funds can flow makes it much more likely that developed countries will be motivated to make good on their promises of financial assistance.