Key
Note address by Shri KC Pant Deputy Chairman, Planning Commission
at the Center for International Development
Harvard University, November 8, 1999
India
in the New Millennium:
Energy, Environment and Development
It
gives me great pleasure to be here with you at this inaugural session of
the International Conference on "India in the New Millennium: Energy,
Environment and Development". I am particularly pleased that this
Conference is taking place in Harvard, which all over India represents the
best not only of American Universities but also of Universities all over
the world.
As we stand
on the threshold of the new millennium, we can look back with pride at
some of our achievements over the past 50 years of our development as an
independent nation. We have successfully reversed the worst inequities of
our colonial heritage and have built India into a nation of considerable
economic strength in a framework of democracy and federalism, with full
regard for human rights and the rule of law. These values have grown deep
roots in our national ethos, and I am certain that they will endure the
sternest test of time. The recently concluded national elections in which
more than 600 million people in 25 states exercised their franchise bear
testimony to the strength of our commitment to democracy and federalism.
Despite the magnitude of the task, the elections were free and fair, and
were conducted efficiently and in a peaceful atmosphere.
On
the economic front India's performance has been undergoing a steady
transformation with a long term acceleration in growth. India's GDP grew
at 5.8% per annum in the 1980s and has grown at nearly around 7% in the
Eighth Plan period (1992 - 1997). This makes India one of the key fastest
growing countries in the world.
We cannot, however, overlook our shortcomings or be
blind to the magnitude of the challenges that lie ahead of us. Despite all
our achievements, one third of our citizens still live below a modestly
defined poverty line. Our social development indicators, although much
improved from where we began, are still unacceptably low. Population stabilization
is still a long way off, though demographic transition has
certainly begun in most parts of the country, Environmental degradation,
which was not much of a concern until quite recently, has started to
accelerate, particularly in urban areas. We will need to tackle all these
challenges in a holistic manner in order to ensure sustainability, both
economically and environmentally. This, in short, is the task before the
country, and in particular its planners and policy‑makers.
Although
the issue of environmental sustainability has formally entered the
international agenda only after the Earth Summit, which was held in Rio de
Janeiro in 1992, it has been an integral part of Indian planning and
policy-making for at least two decades prior to that. The Fourth
Five Year Plan, which was launched in 1969, clearly articulated the need
to harmonise our development plans with the preservation of the
environment. Subsequent Plans have reaffirmed and given concrete shape to
strategies for addressing this concern. Indeed, Agenda 21 of the Rio
declaration to a substantial extent reiterates and emphasizes an approach
which has been articulated in Indian Plans for quite some time. This
approach, in its essence, states that environmental concerns must be
integrated with the development strategy of the country, and more
importantly with the social and economic conditions of living.
The
fact that Indian planners and policy-makers expressed concern about
environmental issues long before it became fashionable to do so is neither
strange nor unusual, since it is deeply rooted in our cultural traditions.
The central tenets of Indian culture and philosophy lead to solicitousness
for life in all its forms, and to preservation of the environment and
ecology as central desiderata of
existence. To Indian philosophy, the bounties of Nature are as much to be
nurtured as used for the benefit of mankind. Protection and regeneration
are inherently more desirable in Indian ethos than wanton destruction and
exploitation.
To
quote the Ishopanishad -
one of our oldest religious
and philosophical texts-"All in
this manifested world, consisting of moving and non-moving,
are covered by the Lord. Use its resources with restraint. Do not grab the
property of others-
distant
and yet
to come. "
The
global and intergenerational concerns expressed by our forefathers are
today finding an echo in modem discourse.
But
philosophy and ethics, while important in shaping attitudes, are
subservient to survival instincts, on the one hand, and conditioned by
emulative behaviour on the other. The noble sentiments expressed by our
philosophers and saints, and embodied as objectives in our development
Plans, have been overtaken by the pressures of population growth and the
insidious attraction of new and more exploitative, life-styles that
are often viewed as part of modernisation. Much as we would like to
deprecate these developments, we cannot shut our eyes to their reality.
Our best-laid plans and comprehensive legislative framework for
environmental protection have not succeeded in reversing the deterioration
in our environmental endowments of air, water, soil and life forms.
Population
pressure and poverty together form a potent combination that can undermine
all ethical considerations and can severely distort the valuation of the
interests of the present generation relative to that of the future. The
resu4tant severe shortening of the operative time horizon and the ready
availability of technologies which can quickly and cheaply meet immediate
needs through exploitative use of resources form an unholy nexus which is
difficult to resist, particularly in democratic societies, which, by their
very nature, are answerable to the extant constituency. Considerations of
extra-territorial and inter-generational welfare tend to get
relegated to the background by the pressing imperatives of the "here
and now". This is reinforced by the well-known "tragedy of
the commons", whereby natural and ecological resources are considered
as 'free goods' to be exploited at will. Degradation of land quality
through excessive use of chemical inputs and depletion of water resources
through unrestrained use of tube‑wells are consequences of such
behaviour which are being experienced in large parts of India.
Environmental
degradation arising out of survival needs can, however, be understood and
even sympathized with, if not actually condoned. The same cannot be said
of the effects that arise from environmentally profligate
life-styles and emulative aspirations. In recent years, the
standards for material well-being the world over are increasingly
being defined in terms of life-styles and consumption patterns
prevalent in the developed western countries. The spread and reach of
electronic media propagate the desirability of such life-styles and
thereby reinforce this tendency. As a consequence, notions of growth and
development are centered around comparisons in the differential levels of
material consumption between the haves and the have-nots. If these trends continue, and heavily populated countries such as India and
China succeed in attaining anywhere near the average standards of living
which exist today in the developed world and they do so with similar per
capita intensity of usage of energy and other environmental inputs, the
Malthusian inevitability would be upon all of us for reasons that Malthus
never dreamed of.
Fortunately
the instinct for survival is generating anti-bodies in the system.
The obvious, and increasingly compelling, connection between pollution of
all kinds and health, on the one hand, and the growing scientific evidence
regarding global warming and consequent climate change, on the other, have
forced a reappraisal of the environmental intensity of western
life-styles. Some of the considerable scientific talent and
technical expertise, which were once directed towards creating new needs
and fulfilling them at the cost of the environment, have started to be
reoriented towards improving the efficiency of resource usage and
conservation. There is also some evidence of questioning of the
desirability of current life-styles within the western establishment
itself, and not merely by what was considered once to be the "lunatic
fringe". These are favourable auguries for the future of humankind
since the possibility exists that we may yet evolve an acceptable standard
of living for all which would be environmentally sustainable.
These
trends, however, will take time before their effects are felt in full
measure; but in the meanwhile it would not be either possible or desirable
for us to await their culmination. The imperatives of providing an
adequate standard of living for our people and of eliminating the scourge
of poverty from the face of India will brook no delay. In the immediate
future, therefore, we will perforce have to plan on the basis of the
existing parameters and the emerging trends. Nevertheless, it shall be our
constant endeavour to ensure that our development strategy and policies
are informed by and consistent with environmental concerns, both in our
own interest and in our role of responsible world citizens.
The
Ninth Five Year Plan (1997-2002) has laid down the contours of our
development needs and the broad strategy to attain our targets over a 15
year perspective period. It has been estimated that to eradicate poverty
in the country, the economy will have to grow at over 7 per cent per annum
over this 15 year period, so that by the terminal year the per capita
income in the country will have doubled. More important, however, is the
structure of this growth. We recognise that uncontrolled
urbanisation is not desirable from the point of view both of the quality
of life and of environmental sustainability. We must therefore, try to
stem the tide of massive rural/urban migration and this means we must
encourage an economic structure which would avoid it. The focus, we
believe, will have to be on strengthening the rural economy and enhancing
its productivity sufficiently so that it can afford a decent standard of
living to all.
To
this end the government has been making concerted efforts to meet energy
requirements in the rural areas in an appropriate manner. Family-size bio-gas
plants provide energy to almost 3 million households. Community-based bio-gas
plants aggregating to 171 MW have also been established mainly for
catering to cooking needs. Bio-mass Gasifier Systems with a total
capacity of 3085 kw have been installed to provide electricity to
households in remote villages from locally available bio‑mass
resources. In the wind energy sector India ranks fourth in the world with
a total wind power capacity of 992 MW which is mostly in the private
sector. Solar photo-voltaic devices aggregating to 47 MW have been
installed for meeting the needs of 1.5 million individuals. A medium term
national renewal energy programme is being chalked out to increase the
share of renewables in the total power generation capacity from the
present level of 1.5% to about 10% by 2012.
About
34 per cent of India's total energy requirements continue to be met from
non-commercial sources. Fuel wood is an important source of energy
for cooking and heating in large parts of India. We have to look for
practical solutions to the basic problems of the people dependent on
non-commercial or traditional energy sources in order to meet their
requirements while at the same time protecting the environment. Therefore,
there is a need for matching our efforts at a forestation, which is
primarily from the point of view of providing carbon sinks, with careful
management and utilisation of forest resources by the local, dependent
population. Joint forest management concepts, which actively encourage
people's participation, are proving to be a unique and more or less
successful experiment in this direction.
These
efforts are extremely important. However, they are necessarily marginal to
the larger task of meeting the aggregate demand for commercial energy in
the country. In common with practically all other developing countries,
the elasticity of energy demand with respect to GDP in India has been
estimated to be above unity. Our efforts at acceleration, which we must
intensify if we want to eliminate poverty, will necessarily be associated
with accelerating demand for energy. I want to assure you that we will do
our utmost to promote energy efficiency in the economy and we expect that
the efficiency of energy use through the use of modem technology will
improve by 0.5 to 1 per cent annually in different sectors of the economy.
Despite this, the total primary commercial energy requirement is likely to
increase from 250 million tonnes oil equivalent (MTOE) in 1996-97 to
770 MTOE by 2012 - i.e. by more than three times. Although this
looks formidable, in order to put the matter in perspective, it needs to
be realised that per capita consumption of commercial energy in India was
only 476 kilograms oil equivalent (KgOE) in 1996, as compared to the
international average of 1684 KgOE - i.e. less than 30 per cent.
Even with the projected growth, the per capita consumption of commercial
energy in India will be only about 850 KgOE in 2012, which would be half
the international average that exists today, and less than a quarter of
that which prevails in most developed countries.
Much
of this projected growth is likely to be in electricity demand, which is
projected to rise from 394 billion kilowatt hours (BKwh) in 1996‑97
to 1473 BKwh in 2012. Despite increasing use of oil and natural gas for
electricity generation and other uses, coal continues to be the main
source of primary commercial energy in India. Demand for coal is therefore
likely to increase by 2.5 times over this period. It is recognized that
fossil fuel extraction and use are major causes of environmental problems
the world over, but the choices at present are limited. Although the
hydro-electric potential of the country is estimated at 84,000 MW,
which can yield 600 BKwh per year at 60 per cent load factor, much of the
hydro potential that remains to be tapped is located in ecologically
fragile regions. Tapping this source is, therefore, not only
environmentally and ecologically problematic, but it is also much more
expensive. Nevertheless the effort of Government is to enhance the
hydro-electric power generation capacity and ultimately increase the
hydrothermal mix to 40:60 from the present position of 25% share of
hydel power in total capacity.
Nuclear
energy has to be an important component of our overall strategy to meet
our rapidly growing energy demand. Nuclear power constitutes just over two
per cent of our installed power generating capacity. But, as the world
increasingly confronts the challenges of meeting the energy demand while
protecting the global environment and climate, fossil fuel and hydro
sources of energy have to be used judiciously. Safe and modem nuclear
power plants represent an attractive and viable option for meeting both
energy demand and environmental concerns. Unfortunately, USA continues to
deny nuclear power technology and resources to India, which acts as a
major constraint on the development of nuclear power capacity in India. If
this approach is based on proliferation concerns, it appears to undervalue
the fact that India's record on export controls and proliferation has been
impeccable. There are countries, whose record on proliferation, as is well
documented in USA, is much less creditable than India's, but they are
beneficiaries of expanding nuclear power cooperation with the US. It is
time to reexamine the old assumptions to see whether these
discriminatory restrictions on India are serving any useful policy
interests of the US or they are unnecessary hurdles in the way of what can
be an enormously fruitful cooperation between India and US in
nuclear energy, which will also simultaneously address our mutual desire
for more intensive engagement in energy and related environmental issues.
I
have already touched upon our efforts to tap some of the country's large
potential of non-conventional and renewable sources of energy. The
government has been pursuing a definite and determined policy for the
development and use of these alternatives. Its major programmes include
power generation through wind, small hydro, bio-mass and solar
energy. Presently, for instance, the installed capacity of wind farms in
India is 1024 MW, which places us fifth in the world behind the USA,
Germany, Denmark and the Netherlands. The Government also supports R&D
programmes for the development of fuel cells and alternative fuels for
surface transport applications. But these efforts are still at a nascent
stage. Much work will have to go into development of these technologies
before they can become credible alternatives to fossil fuels.
This
then brings me to the international dimension of energy and environmental
conservation. In fact, the issues being discussed at this conference were
the subject matter of discussions during the recent visit of Mr. Bill
Richardson, US Secretary of Energy to India. In the joint statement issued
at the end of his visit, the Governments of India and the US agreed
"that the Kyoto Mechanisms could offer the opportunity to achieve
mutually beneficial partnerships between industrialised and developing
nations. Both the Governments resolved "to work closely together with
other countries to develop agreed international rules and procedures for
the Kyoto Mechanisms including the Clean Development Mechanism." Both
the countries also "resolved to work closely together with other
countries, in keeping with the principle of common but differentiated
responsibilities, to advance the goal of protecting the people of the
world from the threat of climate change, while promoting economic
grow‑th". It is a matter of satisfaction that 46 as the world's
largest emitter of GHG, the US recognises its responsibilities to help
lead international efforts to address the challenge of climate
change." It has already taken steps, in terms of the Kyoto Protocol,
to meet its energy requirements in an increasingly climate friendly manner
including reduction of greenhouse gas emissions of roughly 30% by 2010.
Despite
our best intentions and commitment, it is beyond our immediate
capabilities to either change the trends of life-style aspirations
or develop the technologies needed to support these aspirations in a
sustainable manner. The lead will have to be taken by the developed
countries, and I am not sure that the signs are entirely propitious. For
instance, the United Nations Framework Convention on Climate Change (UNFCCC)
stipulated common but differential responsibilities for developed
countries, and did not lay down binding commitments on the developing
countries with regard to green-house gas (GHG) emissions. However,
"the Government of India recognizes the need for voluntary "no
regrets measures" at the national level which will have the
additional benefits of dealing with air and water pollution, urban
transportation and other important sectors of the domestic economy."
It
is unfortunate that emissions have actually gone up in some developed
countries. This poses some difficult questions. It implies, for one, an
unwillingness on the part of certain countries to bring about
life-style changes that are necessary for global sustainability. The
immediate consequences of postponing emission adjustment apart, the
international demonstration effect of promoting a consumerist lifestyle can, in the longer run, be most damaging. If control of
GHG is going to be a long and painful process, not only does the pain have
to be shared equitably by all, especially those who have reached a
standard of living beyond that of mere survival, but care has also to be
taken to ensure that things are not made more difficult for those who have
to balance moderation of energy consumption demands of their citizens with
the need to ensure their basic human rights.
There
also appears to be an unwillingness to enforce energy conservation
commitments through the price mechanism. It may be worth recalling that
the thrust towards energy conservation in developed countries came not so
much from any ideological commitment to the environment but from the oil
price shocks of the 1970s. Since then, however, the price of energy
relative to per capita incomes has declined significantly, which by the
laws of economics can only lead to profligacy. Administrative measures
regarding emission norms, while important in themselves, are no
substitutes for appropriate pricing regimes. Since energy usage has strong
externalities through its impact on the environment, there is good
economic rationale to tax energy consumption. A possible mechanism to
effect such a linkage would be to mandate minimum tax levels on fossil
fuels which would be linked to the per capita income of the concerned
country.
Finally,
I turn to the issue of technology. Mandated emission levels which can be
achieved only by application of specific technologies automatically confer
monopolistic powers on the holders of the technology and enable them to
earn unjustified rent. This is iniquitous. Since the environment is of
concern to all an externality in the truest sense there is
no justification for some to earn large rents at the cost of the vast
majority. Fair return on technological development must of course be
there, but nothing beyond. The Global Environmental Fund (GEF) attempts to
tackle this issue in part, but a partial reimbursement is not a corrective
for the essential distortion. Mechanisms need to be evolved to ensure both
the development of technologies and their dissemination at fair
non‑distorting prices. There is a case for transferring these
technologies at variable incentive prices to countries with the highest
potential for controlling damaging emissions.
The
organisation of this Conference by Harvard University is an event of
tremendous significance. I have noted that the programme covers almost all
the important dimensions of the issue at hand. The range of participants
promises a rich and varied sharing of expertise and experiences. I am
certain that we shall leave this Conference with a much better
understanding not only of the developments taking place in India, but also
of the dimensions of the global environmental challenge.
I
wish this Conference every success.
Thank
you.