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MoEF officials give nod to carbon-trading deal with Japan without political clearance

Business Standard | June 17, 2014

MoEF officials give nod to carbon-trading deal with Japan without political clearance

Move is in stark contrast to India’s stated position on the matter; such a pact would allow Japan to outsource its emission reduction efforts to India

Nitin Sethi | New Delhi

Ministry of Environment & Forests (MoEF) officials have agreed in-principle to a bilateral carbon-trading climate change deal with Japan without a formal approval from the political leadership, putting the Bharatiya Janata Party (BJP) government in a corner ahead of Prime Minister Narendra Modi’s trip to the country.

The in-principle nod to the bilateral agreement comes in breach of India’s international climate change negotiating stance, which it closely coordinates with other emerging economies such as China. Government sources said the acceptance of such a deal had been conveyed to the Japanese counterparts by environment ministry officials without prior discussions with the external affairs ministry or approval from the ministers concerned or the Cabinet.

The Japanese press and other media reported the likelihood of the bilateral agreement going through when Modi visits Japan, just after the negotiators from the two countries held closed door bilateral talks on the issue at the recently-concluded climate change negotiations in Germany. The reports quoted unnamed Japanese officials affirming the likelihood of the deal taking place.

Sources said a political call was yet to be taken on the issue in India as it would radically alter the government’s international climate change strategy and breach existing red-lines. The Prime Minister’s Office (PMO), the external affairs minister and the environment minister would soon have to take a decision on the diplomatic faux pas, sources added. For Modi, the decision would require balancing India’s strategic multilateral understanding with emerging countries such as China and Brazil and his friendly terms with Japan.

Japan has been pursuing the bilateral climate change agreement with India since 2011. Such an agreement would permit Japan to outsource its emission reduction efforts to India and achieve any domestic targets it sets under the new global climate change agreement at much lower costs while profiting from selling its green technologies to India.

India has steadfastly blocked the proposal for such a bilateral agreement for years, assessing that it would only give an easy way out to Japan, which unilaterally walked out of Kyoto Protocol in 2010 demanding that India and other emerging countries should take on comparable emission reduction targets also. Then in 2013, it further slashed its domestic emission reduction targets and was criticised by many countries for the move, including India.

Such a bilateral agreement, the government had earlier assessed, would also ratchet up India’s costs of emission reductions in future. The low-hanging fruits - cheaper options of reducing emissions in India - could be claimed by the Japanese against their international targets under the UN climate convention, leaving India to undertake the costlier measures at its own cost.

India, along with dozens of other developing countries and emerging economies, has opposed setting up such market mechanisms at a multilateral level until developed countries undertake deep emission cuts target. Low-level targets by developed countries lead to prices of the carbon credits crashing, as they have done over past few years, and generate very low incomes against the credits for developing countries such as India as a consequence.

Japan has been able to stitch such bilateral deals with some countries such as Indonesia and Vietnam, but India and China provide a vast, lucrative and prestigious market for its green technologies and low-cost options of reducing emissions which it has constantly vied for.

 source: Business Standard