NEW DELHI: With developed economies staring at a recession, talks of the global financial meltdown forcing climate change negotiations into a freeze have gained ground.
The collateral damage from the financial contagion closest home could be to India’s carbon trade that has already locked in investments generating 31 million carbon credits annually up to 2012. Other projects worth 439 million credits that are in the pipeline could now come under the cloud.
The negotiations, meant to hammer out new targets for rich countries to cut their greenhouse gas emissions after 2012 (although the rich nations want the developing ones to cut as well), could suffer a double whammy of a sharp decline in oil prices and the global financial bust.
Besides the carbon market taking a hit in India the entire move towards renewable energy could also suffer with the price of the alternative — oil — now crashing back to the US $60-70 a barrel band.
Initial signs that the deal, to be signed under the UN Framework Convention on Climate Change by 2009, could fall into a black hole came with a recent embarrassment for EU. The host nation for the next meeting of 180 plus countries in December 2008, Poland has revolted against EU’s climate change proposals agreed to earlier.
The EU had so far has been trying to take global leadership on the issue, showcasing its commitment to cut emissions by 20% by 2020, goading US, India and China to also be proactive.
With a slowdown bound to put a strain on the industry in Europe, Italy joined Poland and other eastern bloc EU members — Hungary, Latvia, Lithuania, Romania, Bulgaria and Slovakia — to officially demand that EU revisit its proposal of reducing greenhouse gas emissions by 20% from the 1990 levels by 2020.
With EU, the self-acclaimed global leader on climate change, dithering, convincing an already reluctant US, arguably the worst hit by the financial crisis, to take worthwhile commitments could only get more difficult leaving the new global pact too weak to stave climate change. That is, if it comes through by 2009.
A senior Indian government official, who deals with climate change, pointed out that if these rebellious EU countries were to take on emission cuts, they would need to shift from coal to more gas, which would be costly as well as increase their dependence on Russia.
“The recent climate meet in Warsaw saw developed countries claim their pockets had been emptied by the
financial crisis and they could not now think of transferring funds or money to developing countries to fight climate change,” another official told TOI.
By Nitin Sethi, TNN
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