1.1 India’s Role

Over the next 40 years, India could experience one of the most dramatic settlement transitions in history, with its urban population growing from about 300 million to more than 700 million. Three mega-urban regions: Mumbai-Pune-Nasik (50 million), the national capital region of Delhi (more than 30 million) and Greater Kolkata (20 million) may be among the largest urban concentrations in the world (Dyson et al 2004; de Vries et al 2007).1 This is a potential renaissance in the smaller Class I towns (i e, those above 1,00,000) and the construction of many new cities ranging from industrial townships to special economic zones (SEZs). This urban transformation has two important relationships to global climate vulnerability:

First, large numbers of India’s urban poor and vulnerable households by the late 2030s could well be part of the first generation of climate change-induced environmental refugees fleeing from the drought- and flood-affected regions of rural India, Bangladesh, Nepal and potentially even Pakistan. Many will not find much comfort in these cities, if we continue with our current pattern of development that consigns them to informal settlements located in the more vulnerable locations in the city (Kundu 2003), but they will come to the city nevertheless.

Second, if the Indian middle class aspires to west Asian, east Asian and even Organisation for Economic Cooperation and Development (OECD) standards of consumption using existing technologies, the scale of rise in GHG emissions and potential resource conflicts are clearly unsustainable for both India and the world, even without accounting for China, which will exert an equal if not larger effect.

The focus of much of the attention of the international climate community is on the second, i e, mitigation challenge, while much of our negotiating rhetoric has been on the first. We, however, argue that, if a number of social, economic and governance constraints are released, India, being a latecomer into large centralised scale-economy dominated systems, is placed in a unique position to benefit from the impending sustainability revolution. Such development scenarios could include having a large number (say 15,000) smaller urban areas (up from the current 5,000) with a concomitantly large number of somewhat larger rural settlements (0.3 million, down from the current 0.6 million), matched by a shift to an information-rich networkbased gas and renewable energy, water and wastewater and recycling system. This can enable the poverty, development and risk mitigation agendas in high growth environments like Indian cities to be addressed simultaneously. The challenge lies in releasing the constraints.

2.1 Exacerbation of Existing Risks

Climate change risk in most Indian cities is typically associated more with vulnerability than hazard exposure (Revi 2008). It is primarily expected to increase the frequency and intensity of current hazards and the probability of extreme events, and to spur the emergence of new hazards, e g, sea-level rise. These new climate-induced vulnerabilities could accentuate and further degrade the resilience of poor and vulnerable communities. It is, therefore, important to understand the multiple ways through which climate change can impact Indian urban residents. These will typically be asymmetric in the impact based on gender, age and ability, accentuating existing vulnerabilities. Some of these channels are given below:

Taken together, this forms a body of mechanisms through which vulnerable households fall in or out of poverty due to income or asset shocks (Fuente et al 2008).

2.2 Effect of Migration

A second-order impact of climate change on Indian cities can occur via migration. Migration in India has been constrained by a number of factors, including (a) high urban poverty levels with dismal living and working conditions due to a crisis in creating higher income urban livelihoods, (b) neglect of rural education, and (c) slow processes of social transformation.

Climate change may force the pace of rural-urban migration. It could turn the ongoing agrarian crisis in rural India into a migratory rout, driven by increases in extreme events, greater monsoon variability, endemic drought, and flooding and resource conflict. Such scenarios have, till date, only been broadly articulated, but not systematically investigated with fine-grained GIS-linked models. Alternatively, the low current level of rural-urban migration can persist due to severe stresses induced in urban areas due to a mix of resource scarcity and disease. This indicates the

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potential for climate change to induce bifurcation behaviour in migration, and to that extent urbanisation, trends.

3.1 Increased Use of Appliances

Energy consumption in urban households is higher than rural households. While the share of consumption expenditure on fuel and light declines as income rises, the rural share of expenditure is consistently below that of the urban share, with the difference being more pronounced at higher incomes, as seen in Figure 1. The declining share of expenditure on fuel and light, as income rises may imply reduced price elasticity and responsiveness to prices.

For electricity, while the ratio of urban to rural consumption varies widely across states, this ratio is declining over time across states, and especially where there was a large discrepancy between urban and rural areas. By 2004-05, according to the National Sample Survey (NSS), there was no difference between urban and rural electrification levels in six, albeit small states and in 14 others (up from nine in 1993-94), the urban share was less than 1.25 times the rural level.

The Role of Lifestyle: Some of the difference in electricity use is attributable to the possession of consumer durables. As shown in Figure 2, which plots air conditioner ownership among households in the top urban quintile against per capita consumption of electricity across states, it has major consequences for aggregate electricity use. Chandigarh and Delhi stand out as having high consumption and air conditioner ownership. For comparison, however, it is useful to note that the annual per capita electricity consumption of the uppermost quintile in Delhi (which begins at about $2,100 per capita income in purchasing power parity (PPP) terms) is about 470 kwh, which is a quarter of the average consumption in the United Kingdom (UK) and a 10th of the average in the United States (US).

Figure 3, which compares ownership of consumer durables for the top expenditure quintile across rural and urban areas, shows that as incomes increase in rural areas, one can expect to see more use of appliances and vehicles. Once some adjustment is made for income differences,2 differences in the ownership of key durables, like air conditioners and cars, reduce considerably. Further, urban consumption may also increase the aspirations of the rural rich.

3.2 Energy Consumption by Buildings

Building Form: The ubiquitous nature of glass and steel construction in aspiring modernist India does indeed owe something to the speed with which glass curtain walls can be constructed

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and the increase in productivity that implies for the real estate industry. But much of its commercial acceptability also flows from the widespread acceptance of the aesthetic that underlies such buildings. The role of social values is often significant in determining the form of a building. Despite their aesthetic attractiveness, such buildings often are designed for full time, full space air conditioning, rather than part time, part space air conditioning that is the more familiar pattern of use in Indian homes that have air conditioning. While there are new types of glass

Figure 1: Expenditure on Fuel and Light as a Share of Non-food Expenditure (in %) 50

y = -0.09ln(x) + 0.824

= -.40

30

20

10

0 0 500 1000 1500 2000 2500 3000 3500

=R² = 0.956

The rural shares are shown as large blocks and are all below the estimated relationship. Source: Data from Report No 509, Parts 1 and 2, i e, NSS 61st Round 2004-05.

Figure 2: Per Capita Electricity Consumption vs Air Conditioner Ownership

40

30 20 y = 43.95x + 16.73 R² = 0.379

10

0 0 5 10 15 20 25 30 35 40 45 50 Share of top quintile households with air conditioners (in %)

The two right-most points are Delhi and Chandigarh (44.7% and 33%, respectively) with per capita monthly consumption of 39.2 and 27.5 units, respectively. Source: Same as Figure 1.

Figure 3: Ratio of Rural to Urban Share of Households with Specific Consumer Durables

1.6

1.4 1.2 1.0 0.8 0.6 0.4 0.2 0.0 ‘Income adjusted’ top quintile Top quintile Average

Television Electric fan Air conditioner Refrigerator Bicycle Motorcycle, Motor car,

scooter jeep The “income adjusted” ratio refers to the ratio of share of households in the top rural quintile (80th to 100th percentile by expenditure) to the share of households in the fourth urban quintile (60th to 80th percentile by expenditure). Source: Same as Figure 1.

coatings that reduce heat gain while transmitting light,3 widespread use of curtain wall design needs insulated glazing, air conditioning and insulation technologies to offset the heating and cooling loads that come with this form of building envelope. In addition, the embodied energy that are embedded into these building systems, through their extensive use of energy-intensive materials, like cement, steel, glass and aluminium, increase thecarbon footprint of these aspirational spaces, while ignoring the large body of indigenous energy efficient design.

Moreover, the use of green building standards, such as the Leadership in Energy and Environmental Design (LEED), could be inappropriate to the Indian context, in spite of their apparently rising popularity. Domestically developed ratings like the Green Rating for Integrated Habitat Assessment (GRIHA) also exist for sustainable buildings, but according to one estimate, the number Figure 4: Energy Consumption in Non-Residential Buildings in Beijing (kwh/m2) 300

290 286

267 260 254 244 229 220 188 134 125 100 250 200 150 100 50 0

A B C D E F G H I J K L Building type Source: Yang (2009).

Figure 5: Thermal Adaptation Preferences in Taiwan (in %) 60

57

50 40 30 20 10 0 16 16 33 13 25 13 15 1 11 Work Home

Use A/c Open Window Use Fan Adjust Clothing Others Source: Hwang et al (2009).

Figure 6: Expenditure on Conveyance as a Share of Non-food Expenditure (in %)

14 12 10 8 6 4 y = 0.034ln(x) - 0.110 R² = 0.965

2 0 200 400 600 800 1000 1200 1400 1600

The uppermost deciles in rural and urban areas have been excluded from the estimation. Once they are included, the fit drops marginally to 0.8272. However, unlike Figure 1, the rural shares are on both sides of the fitted relationship. Source: Same as Figure 1.

of green building area registered under LEED is 200 times more than that under GRIHA.4 Scrutiny of standards is especially important given the lock-in effects that flow from the long-lived nature of building stock in urban areas. Aggressive US benchmarks could well be infra-marginal in India, e g, due to differences in part time, part space vis-à-vis full time full space air conditioning.

Role of Behaviour: There is also considerable role for behaviour in determining actual energy consumption, especially so since

62 thermal comfort expectations vary widely across cultures. Yang (2009) documents considerable variation across buildings with similar uses and forms, presumably depending on the behaviour of its occupants (Figure 4). Similarly, Hwang et al (2009) presents evidence (Figure 5) from a field survey in Taiwan, documenting sharp differences in thermal adaptation behaviour at home and work.5 While the fact that cooling is costless at work presumably plays a large role in this finding, the researchers noted that only a quarter of workplaces…visited [were] equipped with electrical fan or [had] sufficient operable windows to facilitate natural ventilation, indicating a strong role for building design.

Data for Indian buildings is not widely available but the Bureau of Energy Efficiency (BEE) is now in the process of establishing reporting requirements for all buildings with a connected load of over 500 kVA or a conditioned floor area of over 1,000 sq m. The BEE has also established a green building code and one expects that the specifications will be validated using actual onground performance, as compared to a control stock of buildings using the reported data.

Construction Capacity: Even if one were to understand and appreciate the kinds of buildings that needed to be built, it is not entirely clear that India has the capacity to build them. This reflects the poor quality of training available to construction workers in the country. Despite the efforts of organisations like Construction Industry Development Council (CIDC), most of our construction workers are untrained. Their ability to execute precision high quality construction is therefore questionable.6

3.3 Energy Consumption by Transport

Unlike expenditure on fuel and light, there appears to be little difference between shares of rural and urban expenditure on conveyance, for a given level of income. Indeed, if the top income classes were excluded, the regression is almost perfect (Figure 6). As a comparison, the share of expenditure of 14% for the penultimate income7 class is almost as high as the US, where the share has varied between 15% and 20% in recent years. As of 2004-05, nearly 50% and 16% of the uppermost urban quintile in India own two-wheelers and cars, respectively, as compared to 36% and 3%, respectively, for the next richest urban quintile. As incomes rise, if current trends continue, the use of private transport is likely to increase.

Institutional Factors: Public transport in India is not ubiquitous. Its very presence may depend on extraneous factors. The examination of data for Indian cities from MoUD (2008) shows that the status of a city as a

Table 1: Capital Cities and Public Transport state capital has a signi-

Public Transport

ficant effect on the availa-

Capital Cities No Yes Total

bility of public transport

No 17 36 53

(Table 1). Outside the

Yes 1 20 21

north-east, Raipur is the

Total 18 56 74

only capital without public transport, pointing to the critical role of the state government in such decisions.

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Figure 7: Urban Density and Transport-Related Energy Consumption

Source: Urban density and transport-related energy consumption (2008). In UNEP/GRID-Arendal Maps and Graphics Library. Retrieved 17:09, 1 March 2009 from http://maps.grida.no/go/graphic/ urban-density-and-transport-related-energy-consumption.

City Form and Settlement Structure: A core assumption underlying city form is that dense compact cities encourage greater use of public transport (World Bank 2009) and are thus better for GHG mitigation. Figure 7 presents the canonical relationship between density and transport-related energy consumption with US cities at one end of the scale and cities like Hong Kong at the other. The sharp difference between European and American cities, referred to in Nivola (1999) is evident.8

In India, while linear cities, like Kolkata and Mumbai can benefit greatly from rapid transit corridors, most of the larger cities in India are circular. They, especially if they are multi- focal, are public transport challenges. Most of these cities, like Bangalore and Delhi have a sequence of ring roads and a set of radial spokes. For a transport system to possess the ability to take a person from any point to any other point within the circle, it would need to have multiple modes (e g, small vehicles, possibly non-motorised, that connect from interior to the ring roads and spokes9), predictable and frequent schedules on the rings and spokes and free or low-cost interchanges, so that routes can be customised by the passenger. A few examples of such systems can be found and consequently such cities see growing use of private transport.

The extent to which we tolerate informal settlements also matters. In Mumbai, for instance, Baker et al (2005) find that a high proportion of the poor walk to work, presumably they can live, albeit squalidly, close to their workplaces.

Social Factors: Often, however, much of the decision as to whether one chooses public or private transport is often as much

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social as economic and depends on how preferences are constructed. For example, the use of public transport among higher income groups is more in Mumbai and Kolkata than it is in Delhi. These preferences, while taken as given in traditional economic analysis, are also constructed over time and subject to influence, as in current behavioural economic research, and perhaps, especially in transitional societies such as India. The role of such preference construction in the success of policy initiatives is relatively understudied.

3.4 Energy Consumption in Water Supply

In addition to the negative effect of climate change on freshwater availability, increasingly, as water begins to be transported over long distances, as in Bangalore, Indore and now Delhi, a significant energy component is also embedded in water supply. In many Indian cities, even before they begin to treat their wastewater, electricity is among their main expenditures, so much so that in many Indian states, fiscal transfers to them are made after deducting their dues to the state-owned electricity distribution company. When wastewater treatment becomes widespread; it would add to the energy bill.10 This implies that the existing lower energy use for water in India is at the cost of increased pollution of water sources.

Following the channels identified above between climate change and cities, we turn to possible actions that can help cities adapt to the effects of arriving at the climate change and arrest carbon emissions. A key area of policy for India will be to balance adaptation and mitigation.

4.1 Urban Climate Hazard Risks

Since the response of the global climate system to mitigation actions will have a multi-decade lag, because of the dynamics of GHG accumulation, adaptation measures are inevitable. A serious challenge to Indian urban climate change assessments is the availability of appropriate downscaled forecast climate change data but even with uncertainty about the precise impact, there is some consensus that the enhanced risks in the foreseeable future (MEA 2005; IPCC 2007a and 2007b) will include (a) increased mean and peak temperatures, (b) changes in the mean, peak and the distribution of precipitation, (c) extreme weather events with associated storm surges, and (d) sea-level rise. These factors i ndependently (or combined) lead to a large set of urban climaterelated hazard risks, which, as discussed in Section 2, are an e xtension or intensification of an existing disaster risk set, for which some level of assessment and intervention already exists. The “units of exposure” in an archetypical Indian city are people (clustered into various socio-economic classes), enterprises, lifeline infrastructure elements, buildings, livelihood clusters and ecosystem services. Among these, populations, enterprises and livelihood groups can be vulnerable for many reasons, viz:

(a) location, (b) multiple episodes of displacement, (c) inability to ride out extreme events, (d) disempowerment from entitlements, and (e) lack of capacity for preparedness and community and social safety nets.

4.2 Urban Climate Adaptation Plan

This form of analysis is central to the development of detailed Urban Climate Adaptation Plans for the vulnerable, which should be an important segment of such plans. Some of the concrete policy instruments and programmes that could help the blending of development, poverty and climate change agendas include:

Finally, relocation and rehabilitation as a climate change adaptation measure should emerge as a policy option only after all other options have failed. Planning, market and financial instruments will be needed to adequately address local needs, with the recognition of the rights of residents to compensation. However, today even the most progressive rehabilitation policies, rarely address climate change-related concerns.

4.3 Multi Level Institutions

A city climate adaptation and mitigation plan would ideally need to link national, state and city policy, political and institutional arrangements, and interventions at local levels. It would also need to serve as a platform for dialogue between government functionaries, political leaders, the community-based organisations (CBOs) and non-governmental organisations (NGOs) who are active in trying to channel citizen and community energy towards productive ends, and private entrepreneurs who could provide the motive power for adaptation implementation. A sketch for a possible framework at multiple levels is presented below.

Among institutions, the National Disaster Management Agency (NDMA) could serve as a bridge between short- and medium-term risk mitigation and long-term climate adaptation.

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None of this is going to happen automatically. These governance developments remain a formidable challenge in a world, where city growth remains tied to surplus extraction from real estate, and where the dominant paradigm does not recognise the interrelationships between the poorer and more vulnerable residents of the city with their better endowed neighbours. Climate change risks will only manifest themselves over a multi-decade period. While this provides an opportunity for pre-emptive actions to reduce the disruption to economic and social development processes, it also carries with it the danger that the longue durée may also imply inaction, since its effects and benefits lie beyond the political and perception horizon.

5.1 Sustainable Habitat Mission

It is useful to briefly review our National Action Plan on Climate Change (NAPCC), which proposes a Sustainable Habitat Mission. It seeks to promote energy efficiency as an integral component of urban planning and renewal, through three initiatives: (a) application of the energy conservation building code; (b) urban waste management and recycling, including power production from waste and waste water recycling; and (c) better urban planning and modal shift to public transport.

Earlier, we had questioned whether green building codes are really green, given the local context. Moreover, we have not been very successful in applying building codes as part of our

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standard urban planning. We may, therefore, also want to consider an incentive-based regulation, e g, impose additional fees on buildings whose energy use exceeds a benchmark, like increasing block tariffs.13

On water, urban areas should begin by reducing use; much as India demands that Annex 1 nations offer proof of their resolve to address climate change. The use of pricing to reduce use, albeit a minefield in India, needs to be tackled politically. Freshwater demand should then be further reduced by recycling.14 Apart from adaptation benefits, the other significant reward from wastewater treatment is the mitigation of industrial abuse of surface and groundwater, which, more than actual use, is rendering water resources unusable for any purpose. The use of urban waste for energy is more problematic. This chimera diverts attention from implementable solutions for waste management, leaving one with a dysfunctional facility and no treatment.

It is not clear how better urban planning will help with our level of implementation. Besides, how will public transportation of indifferent quality with per trip fares compete with the ease and economy of the two-wheeler? If implementation could be addressed, low-cost modern ticketing systems, coupled with better predictability of service (using GPS and SMS technology) could increase the use of public transport. More fundamentally, as noted earlier, the decision to provide public transport is often not that of the city (see Table 1). Another major issue in mass transit is bus vis-à-vis rail. Despite being older technology than the bus, urban rail is an aspirational mode. However, besides being high investment and having a high lock-in character, from a climate change perspective; its embedded energy is high. Despite this, many cities in India are attempting rail-based mass transit, usually in the private sector. Within rail, high speed rail is another double-edged sword. It has not only the potential to increase sprawl, but also a series of compact cities good for local impact and adaptation. Finally, intermediate public transport is neglected, though their low capital cost and capacity allows frequent operation, increasing the overall attractiveness of public transport. Here, allowing per seat fares helps make this mode more poor-friendly.

The issue of parking is at the interface of transport and building. In countries that can enforce parking restrictions, it may make sense to limit in-building parking provisions, to discourage car use. However, in India, where the absence of that capacity is painfully evident, and street parking interferes with traffic flow, adding to the GHG problem, should in-building parking be encouraged or even mandated? Or, should the solution be stricter enforcement of on-street parking? Once one adds the congestion created by violation of traffic rules, it would seem that more and better trained traffic police is an essential component of sustainable urban habitat.

On balance, our NAPCC addresses mitigation issues only partially, though one must reserve further judgment until the first Sustainable Habitat Mission report is released. In their defence, however, one must also accept that these are “wicked problems” (Rittel and Webber 1973); almost incapable of resolution. Indeed, it may be feasible only to ameliorate, not resolve them.

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5.2 Wicked Problems in Urban India

There is a good reason, beyond the lock-in effects, why OECD countries are not focusing on city forms, building forms or behaviour patterns, especially with respect to thermal comfort, and transport choices. We do not yet know how does to go about achieving it or even which policy areas we should target. A good, but by no means comprehensive, exposition of this indeterminacy is the analysis by Nivola (1999) of the broad empirical feature that European cities are typically more compact than American (see also Figure 7). He offers a number of possible hypotheses about this phenomenon. It is instructive to enumerate them to illustrate the breadth of action space that exists when one is dealing with urban form.

What makes these explanations “wicked” is that they do not relate to standard building by-laws and master plans but refer to much broader economic policies relating to general tax and subsidy policy that nevertheless seem to have an effect on the urban form, through a multiplicity of channels, which do not offer themselves to easy manipulation.

India has its own set of wicked problems. Though it is necessary for us to think out of the box because the box has proved to be unsustainable, it is unclear as to which aspects of the orthodoxy should be discarded and which should be retained. The subsequent questions in this section should be seen as a point of departure for such a process of inquiry.

Level of Decentralisation: The first of these wicked problems is the relevance of the local government. The 74th constitutional amendment to the Indian Constitution places the tools traditionally used for moulding the city form, viz, town planning, with the local government. But, not only have states not transferred this function to the city effectively, we saw above that city form is affected by not only planning and zoning decisions, but also broader economic policies, outside local control.16 Despite pious intentions to use it as an opportunity to build self-governing cities, Jawaharlal Nehru National Urban Renewal Mission (JNNURM) has been largely used as a means to build traditional infrastructure (with a strong focus on water supply and drainage systems), often executed by state government agencies.

But, GHG mitigation is a global public good, and perhaps local governance should not be entrusted with producing it. On the other hand, centralised decision-making can negatively affect the urban metabolism. Putting aside questions of capacity, the replacement of the local by higher levels of government in the climate change sphere has the potential to both derail adaptation efforts and push back mitigation. The right allocation of responsibilities across levels of government remains a vexed and “wicked” question.

Federal Finance and Urban Areas: The responsibility of different levels of government is tied to intergovernmental financing. In the Anglo-Saxon framework, property taxes have been the core of local revenue. Much of the urban reform agenda in India is structured around improving property tax collection. It now, however, appears that not only will climate change require much more investment in cities that property taxes can generate, the tax itself may be responsible for urban sprawl. Arguably, property taxes enables people to organise themselves into communities, self-providing certain services to themselves, leading to the sprawling settlement landscape in the US. This may be less of a problem in India, where the levels of income/property values may not permit the provision of services based on such taxes alone, but it is important to consider what the nature of the federal financial system should be.17

It can be argued that if the quality of local public goods remains high and equitable, there will be less interest in establishing a separate community. Achieving this requires addressing questions on the quality of service delivery and the appropriate mix of financing vis-à-vis local taxes and statutory transfers.18 It may appear odd to consider education delivery and statutory transfers as climate change instruments, but they may be much more relevant than traditional measures like better fuel efficiency. For example, only 4.5% of trips in Atlanta are by public transport, compared to 30% in Barcelona. Regardless of how efficient Atlanta’s cars become, its residents will still emit more carbon than Barcelona.19

Home-Ownership and Transport Demand: In addition to property taxes, the propagation of home-ownership, e g, through tax benefits, may also cause urban sprawl. The supply of such homes in the core city would involve densification, which, even if it permitted by building by-laws, is difficult to provide, since it involves replacing existing structures. This is usually hard to do, except in countries like China. New homebuyers, therefore, move outside the core city resulting in urban sprawl. Added to this, the new labour market implies multiple job changes. Once a home is purchased, the costs of relocating closer to a new job are high. Over time, this leads to a rise in transport demand.

In this context, increasing the supply of rental housing may prove to be climate-friendly. While many non-pecuniary reasons for neighbourhood preference, such as schooling for the children and quality of neighbours, etc, are not affected by ownership status, renting does reduce the cost of relocation and O’Sullivan and De Decker (2007) indicate that differences in policy of regulating private housing rentals in Europe do seem to affect the proportion of renters.

To summarise, we have, in this section, argued that aspects of decentralised local governance, intergovernmental and homeownership all affect the climate change agenda, even though these are not traditionally considered to be climate change issues. As India stands at the cusp of urbanisation, it is important to debate these issues thoroughly.

6.1 Context

South Asia will have over two billion residents by about the late 2050s, with just over a billion people in urban areas. The entitlements and aspirations of India’s current and future citizens are at stake. Further, in the life cycle of cities major changes in infrastructure elements, planning and tenure regimes occur over a 100-year time frame. So, the emissions time frame for calibration needs to be estimated over 1900-2100; a century into the past and a century into the future. We are thus negotiating on more than just the development and economic options for a billion people; instead we are negotiating on behalf of approximately 150-200 billion life years, i e, a large fraction of all human civilisation.

To protect these interests, India’s negotiating position needs to be structured around a set of strict boundary conditions. Regional climate security negotiations will be necessary to resolve ongoing and potential conflicts. This escalates the terms of the negotiation beyond standard economic and market-based instruments to that of national security and sovereignty. In this context, these are some non-negotiable conditions that India could bring to the negotiations:

The last two imply that a minimum per capita economic output growth would need to be maintained at least till 2050.

6.2 Key Elements of a Framework

Around these boundary conditions, we can outline some broad elements of a negotiating framework. The following discussion is classified into these broad areas, viz, (a) conditioning on actions by Annex 1 countries, (b) the inclusion of adaptation and mitigation in the scope, (c) the affixation of responsibility on production or consumption, and (d) mechanisms for resource and technology flow.

(i) Conditioning on Actions by Annex 1: Given that climate change has a prisoner’s dilemma structure, it is important to

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ensure that the Annex 1 countries do not free-ride. So far, the negotiation has been structured around what it would take for developing countries to adopt some form of mitigation actions. On the side of the Annex 1 countries, the commitment has been to quantitative reductions in emissions. However, their adherence to commitments on this count has not been very encouraging. The current approach gives countries flexibility as regards how they choose to reduce emissions. This is efficient but not effective for monitoring purposes. So, is there a case for committing to actions, e g, should the US be asked to commit to raising its mileage standards on vehicles (as it is currently trying to do) and impose carbon taxes (as it tried to do in 1993, but failed)?

In any event, it is useful to ensure that India’s commitments are related to actual measurable reportable and verifiable reductions in Annex 1 countries.

(ii) Responsibility: Where should the locus of responsibility for emissions lie? Currently, it lies on the production side. This was acceptable in an autarkic world when trade was a small proportion of consumption, but now, it is time to rethink this aspect. Where should one allocate the emissions of an auto-component factory in Pune producing for cars produced in Japan and ultimately consumed by American consumers?

This is not an idle comment. It is arguable that the decline in per capita GHG emissions in some Annex 1 countries could be due to the relocation of GHG intensive production from that country to another, but the product continues to be consumed in the Annex 1 country. Should the concerned Annex 1 country get credit for a reduction of CO2 emission?

One must however be careful with this argument. If the consumption is actually penalised in the Annex 1 country, the reduction in demand will affect the producing country but the tax revenues will accrue to the Annex 1 country. On the other hand, if the producing country levies the taxes, the economic effects may be similar but the tax revenues will remain with the producing country. However, politics is usually about direct incidence and not indirect effects. So, a green tax on Annex 1 consumers may be more politically acceptable, than an employment-reducing tax in developing countries. In such a situation, the negotiation should be about the mechanism by which the revenues from such taxes will be shared with the developing countries.

(iii) Financial Resource Flows: The core Kyoto mechanism for financial flows across countries is the clean development mechanism (CDM), which has a cumbersome additionality test and a regulatory structure which may be self-defeating (see Wara and Victor 2008). As it stands, if India enacts domestic legislation to mandate clean energy public transport, it would not be able to claim offsets, but if it does so without mandatory legislation, it will be able to. This makes the CDM an incentive to keep green laws off the books. Furthermore, if India focuses on adaptation, even those that have carbon co-benefits, it may not be able to pass the CDM test. So, the questions are:

(a) If CDM continues, should the test of additionality be discontinued or substantively modified, so that it is with respect to a benchmark rather than a baseline?

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– absolutely critical for urban areas to make a transition out of coal? Will it pay for supercritical boilers? What about buses for public transport and low carbon cement? More interestingly, will it compensate urban areas for reducing property taxes, assuming the argument against them is accepted? The state governments in India reimbursed their local governments, when they removed octroi, a tax that provided substantial revenue to local bodies but interfered with the free movement of goods. Can such a mechanism be contemplated internationally? How will such a fund be governed?

We have argued above that, given the foot-dragging by Annex 1 nations, a significant warming is unavoidable. The first charge of climate change resources will be for adaptation. Indeed, we may need to undertake various such actions in non-urban areas too, so as not to flood the city with an unmanageable tide of eco-refugees. Must India finance and undertake these necessary but large and expensive adaptation actions using its own resources to retain full sovereignty in determining its policy and programmatic options or is there a via media? Can India establish partnerships to fund adaptation, while retaining the framework of its independent policies? Answers to these, and many other such questions, need to be found in the negotiations.

(v) Technology Transfer: Who pays for the technology? Would a focus on technology transfer imply an engagement with sectorbased approaches that we have abjured so far? The compulsory licensing system under the World Trade Organisation Trade Related Aspects of Intellectual Property Rights (TRIPS) regime provides one approach for goods that are privately owned but have a high public value. But, there are other options that can be contemplated.

One can envision a country-specific externally-funded pool with broad conditions on its use – possibly more politically palatable in the Annex 1 countries as compared to unrestricted aid. For those who worry about the fungibility of resources, there are likely to be strong flypaper effects, i e, additionality, if research on intergovernmental finance is any guide.20

Alternatively, there could be direct payments by developed countries to their firms which hold the intellectual property rights. Given the relative bargaining powers of the countries, the deadweight costs of bargaining time are likely to be low, given that the firms interact repeatedly with their own government. One can expect other Annex 1 countries to try and ensure that firms of a specific country are not overly subsidised as a result. Such a scheme could be complicated by the indeterminate nationality of multinationals.

6.3 Domestic Negotiations

Finally, negotiations are not limited to the international domain. Restoring mutual trust across urban and non-urban spaces is equally important. Urban areas are seen as consuming water, land, energy and the environment to the detriment of non-urban areas. Unlike China, where urban areas also consumed these resources rapaciously, the extent of corresponding benefit, in terms of employment, has been much less and the freedom to protest, thankfully, that much more. Actions for adaptation, because it addresses those urban residents who have the deepest connection to non-urban areas, i e, the poor, and mitigation actions, because it reduces the growth in consumption of resources in urban areas, if undertaken sincerely, have the possibility of restoring this delicate inter-sectoral balance. If not, these tensions will find their expression either in the political space or worse, outside it. Mitigation and adaptation thus come with significant co-benefits for the political harmony of the country.