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Address by Mr. Shyam Saran Special Envoy of the Prime Minister for Climate Change at USIBC, Washington DC on Renewables, Reusables and Recyclables: The 3 Rs for a Strategic Partnership between Indian and US Business - Looking Beyond the Global Economic and Financial Crisis

Washington, DC
March 24, 2009

I wish to thank the USIBC for inviting me and for giving me a welcome opportunity to interact with US business leaders for the first time since the successful conclusion of the Indo-US Civil Nuclear agreement. The US business community played a stellar and supportive role in making this historic initiative a living reality and I wish to thank the many friends in the USIBC, both Americans and Indians and in particular, Ron Summers, who spared no effort in arguing our case where it mattered. You can be justifiably proud of what your contribution has helped accomplish – a dramatic transformation in Indo-US relations and the opening up of a wide-ranging spectrum of opportunities for economic partnership. The challenge before us now lies in translating these opportunities into practical collaborative partnerships on a scale and of a quality that befits the strategic partnership between our two countries.

In fact, to me, the need for such business collaboration in a carefully structured strategic framework, has acquired an urgency precisely because of the ongoing global financial and economic crisis. We need to look beyond the immediate compulsion of stimulating our respective economies, restoring trade and investment flows and evolving a more effective national and global financial infrastructure. For when the dust settles down, and we all hope that this happens sooner rather than later, we will see a different world around us. Much of the social and economic terrain that we have been accustomed to in the past decades, will have been transformed and we will need new intellectual tools and fresh business strategies to deal with an unfamiliar terrain. This is where I believe that business and industry leaders of our two countries can together begin to look at the newly emerging realities and position our two democracies to be leaders in the new wave of creative entrepreneurship and technological innovation that will be required to face new and unfamiliar challenges.

I see two broad long-term trends that are already emerging.

First, the world is at the cusp of an energy revolution. Thanks to concerns about global warming and climate change and the related challenge of energy security, the global economy must make, and is already making, a strategic shift from reliance on carbon-based fossil fuels to the progressively greater utilization of renewable energy sources. This is a revolutionary shift since it seeks to change a pattern of economic activity and development that has remained largely unaltered since the industrial revolution began over 2 centuries ago. It is this pattern of development which has led to the cumulative accumulation of GHGs in the earth’s planetary atmosphere and which is responsible for climate change. It is also becoming apparent that current trends of growth of the global economy, in particular the growth of India and China, cannot be sustained by the accelerated depletion of fossil fuels. If energy is not to become a constraint on our growth – the growth of India and the US and the global economy as a whole, then a relatively rapid and significant shift to renewable and non-conventional energy sources becomes inevitable. Both climate change action and energy security dictate this.

It is against this background that we have welcomed President Obama’s Renewable Energy Initiative. We, in India, are currently in the process of elaborating an ambitious plan for Solar Energy; we are looking at more efficient and commercially viable use of Bio-mass and Bio-fuels. Thanks to the Indo-US Civil Nuclear agreement and NSG clearance, we are scaling up our plans for nuclear energy, which will, significantly, progress within India’s own 3-phase nuclear energy programme, which is based on the concept of a closed fuel cycle with minimal waste. This is renewable energy par excellence. The US, too, is reviewing its policy on the processing of atomic waste. We hope that this will be an area we can work together in a practical manner, unburdened of the non-proliferation technicalities of the past.

Therefore, the first component of our strategy for the future, for both Indian and US business is a renewable energy partnership covering different technological pathways and focussing on technology and product development.

Second, I believe that the world is moving away from the linear growth models that we have been accustomed to, without much regard to the finite limits of resource endowments in general. While we have grasped the importance and urgency of energy security, we need to extend the concept to encompass resource security. Energy is indispensable to development, but we need a diverse variety of resources as well, including land, water, and mineral resources among others. Patterns of growth prevalent so far have been based on extractive processes, on the assumption that there are ample reserves worldwide for the foreseeable future. It has also been assumed that market forces will deliver better extractive processes as well as more efficient utilization of existing resources. However, just as we are reaching the limits of available fossil energy resources, the same is beginning to manifest itself with other resources as well, including useful metals and raw materials. A once through production process, which is the norm today, will eventually result in a severe depletion of resource-endowments. The uneven distribution of these resources, will create the same kind of security concerns that we have today with respect to energy. Therefore, resource security demands two radically different but related responses in our production and consumption processes. On the production side, recycling must become an integral part of the business model of the future. We need to put in place technologies and facilities that enable the efficient and cost effective recycling of an ever larger proportion of our depleting supplies of minerals. For example, in India a very large proportion of our aluminium and steel is recycled and put back into the production chain. Some of this is in the organised sector. Most of it is in the unorganised sector. There should be an India-US partnership on Recycling as part of our objective of achieving resource security.

We must also take cognisance of the fact that consumption patterns which have developed and have, in fact, been encouraged by government and business alike, are already undergoing a change under the impact of the global financial and economic crisis. In product development, disposability has been given a higher value than durability, novelty has been rated higher than reliability. A value system based on use and discard, has created an economic model that encourages waste, devalues thrift and sets conspicuous consumption as the standard by which to judge success. This is beginning to change and whether in the US or in India, these values of a modern economy are being questioned and there is a renewed stress on the values of hard work, ethical behaviour and frugal lifestyles, which is more in keeping with our concept of sustainability. Concerns over Climate change are reinforcing this shift in value systems and thinking across the world. 

Some may see in this a lamentable loss of a dynamic socio-economic environment. I see this as yet another opportunity for Indian and US business to position themselves to meet the demands of a new age and a new humanity that values sustainability over excess. It means focussing consciously on technological innovation and product development that conforms to the emerging value system. It means developing and producing goods that meet new standards of durability and reliability. It means more products that are reusable, not disposable and if reuse is not possible, then are recyclable. 

We must together set the standards for a new Age of Sustainability, propagate concepts such as zero discharge from chemical plants, water-positive processes in all water-consuming industries, energy positive processes wherever possible through re-use of heat from production and the generation of power from waste. We should explore how we could use flue gas from coal-based power plants to produce methane which may be used as transportation fuel. The ideal should be to create a world in which production and consumption processes are closed cycles with zero waste. 

This will take time and may never be achieved fully, but it is a laudable ideal to aspire for. Concepts of linear growth must yield to concepts of sustainable growth. In India, traditional culture places a high value on sustainability, enjoining upon all human beings to look upon Nature as a source of nurture, not a force to be conquered, subdued and ravaged. What we extract from Nature must never exceed its regenerative capacity. We are currently living on a national resource overdraft, not very different from the excesses that triggered the economic and financial crisis. Deleveraging our claims on Nature is as important as deleveraging our financial overstretch. I think that India and the US have the intellectual and entrepreneurial resources to lead this newly emerging world, if we choose to work together. We agree with President Obama that the future is bright and that we must remain focussed on that even as we grapple with more pressing and immediate challenges. 

Those of us who have worked, against many odds, to establish the value of a broad-ranging strategic partnership between our two great democracies, wish you well and trust that you will, as business leaders of India and the US, take us and the world, on what I see as an exciting new journey into the future.

Thank you.
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