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CFR experts examine the science and foreign policy surrounding climate change, energy, and nuclear security.

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REUTERS/Amit Dave
REUTERS/Amit Dave

Why We Still Need Innovation in Successful Clean Energy Technologies

Today is my last day at CFR. I’m joining ReNew Power, India’s largest renewable energy firm, as their CTO. I’m excited for a new adventure but sad to leave the Council, which has given me support and autonomy to study the innovations needed for global decarbonization. Read More

Climate Change
Two Cheers for the Paris Agreement on Climate Change
LE BOURGET, FRANCE – The Paris climate summit (also known as COP 21) has adopted a new “Paris Agreement”. The agreement has the potential to mark a laudable and historic shift in how the world negotiates cooperation on climate change. It does not justify the over-the-top claims that some are making – that it spells the end of fossil fuels or assures that temperatures will rise no more than two degrees – but those who negotiated it never believed it could. Nor does it deserve to be pilloried (a rarer but still real reaction) for failing to save the planet – an entirely unreasonable expectation. Instead it begins to set up a framework for transparency and review of countries’ nationally driven emissions-cutting efforts and a process for encouraging stronger efforts over time. In doing so it meets the modest but important goals that were sensibly set for the negotiations. Only time will tell, though, whether the full promise of the Paris Agreement is achieved. Why the New Architecture Makes Sense The world has come a long way from the vision that animated United Nations (UN) climate negotiations for most of the 1990s and 2000s. That vision centered on a firm division between developed and developing countries. Negotiations focused on dividing up responsibility among developed countries for cutting emissions and assigned them each targets. Those were to be enforced through international law. The Paris Agreement is fundamentally different. All countries, not just developed ones, are supposed to curb emissions. Negotiations did not focus on dividing up that responsibility – instead each country developed its own plans based on its national circumstances. Rather than enforcing these through international law (which has proven to be toothless for climate) the Paris Agreement aims to mobilize political pressure. It does that mainly by mandating a set of transparency measures and a process for regularly and publicly reviewing each country’s progress (though much of the detail on each remains to be developed). It also establishes a process under which each country is supposed to put forward stronger national emissions reduction plans every five years. Nothing in the agreement actually compels countries to do this. But the experience of the past two years suggests that the specter of Paris, where countries were similarly expected to present new emissions cutting plans, spurred meaningful efforts in most major emitters to develop more substantial emissions cutting agendas than they had before. It’s not unreasonable to expect that the twice-a-decade cycle set up under the Paris Agreement could catalyze a similar ratcheting up of ambition on a regular basis. All of this is much more in tune with the underlying political and economic reality of dealing with climate change than most previous international efforts were. The main barriers to strong action are domestic, not international, so letting the process of setting goals play out within each country, rather than around a negotiating table, makes eminent sense. Countries are not yet prepared to pursue tough punishments for counterparts that don’t follow through on their goals. (If they were, then anticipating that, each country would probably ratchet its goal down, itself problematic.) Given that, the best an international agreement can do is boost the political prospects of serious climate efforts in each major country, and strengthen countries’ technical capacity to deliver. The Paris Agreement is a push in that direction. Mandatory transparency and international review, pursued properly, should highlight successes and shortfalls in each country, empowering not only international pressure but, at least as important, domestic political forces that favor stronger and more effective action on climate change too. It’s Too Soon to Fully Judge the Agreement Yet we have, in important ways, been here before. The Copenhagen Accord, agreed to by every major economy at the 2009 UN climate summit, appeared to dissolve old distinctions between developed and developing countries, requiring everyone to reduce emissions and allowing commitments to policies rather than just to emissions targets; it seemed to include provisions for both transparency and for international review of countries’ efforts; it looked like it had left the Kyoto Protocol in the past. But within days after negotiators departed the Copenhagen summit, itself a procedural mess that ended in spectacular acrimony, prominent parties were disavowing each of these elements. When the next UN summit convened in Cancun a year later, almost every major element of the Copenhagen agreement was relitigated, almost as if the Copenhagen summit had never happened. Indeed many of the core debates at the Paris talks remained the same as those at Copenhagen. Why Paris Could Last and Where the Deal Falls Short But two big positives set Paris apart. There are also some areas where it underwhelms. Updating Emissions-Cutting Efforts The first is the agreed process for ratcheting up countries’ emissions-cutting efforts. Every five years, beginning in 2020, each country will be expected to contribute a new national plan for reducing emissions. Ideally this will mean that, rather than dissipating most of their energies fighting over the architecture of a global climate agreement, countries will focus productively on their emissions-cutting initiatives instead. In principle, then, the Paris Agreement could last decades, only with new emissions-cutting efforts every five years. Not since Kyoto has a UN climate agreement been structured this way. Limits and Weaknesses There are other novel elements in the Paris agreement that will draw broad attention, most notably an aspirational goal of limiting global temperature increases to 1.5 degrees Celsius (2.4 degrees Fahrenheit) above preindustrial levels, and a promise to grow financial support for poorer countries beyond $100 billion after 2020. These were essential to the diplomatic bargain that sealed the Paris Agreement. But they are so disconnected from the forces that will actually shape policy that they do not rank among the substantively important parts of the deal. There are also elements that the deal would be better off without. One cannot help but be struck by the repeated invocation of “common but differentiated responsibilities” – often used by developing countries to argue that they are subject to weaker obligations than developing countries – in the text. There are, similarly, many places where the demands on developing and developed countries are qualitatively different. Some of these make substantive sense: one shouldn’t expect, for example, India to assist poor countries in transitioning to low-carbon economies in the same way that Europe ought to. But most of these are vestiges of an old way of thinking and are a sign that some fundamental debates aren’t yet resolved. This is particularly worrying in the section on transparency, and may presage intense battles to come. Fortunately, though, sharp differentiation between developing and developed countries is largely absent where it matters most – particularly in most of the basic contours of the process for promoting transparency and scrutinizing countries’ national efforts. Public Perception The second big distinction from past agreements is the way that the Paris Agreement was concluded. Expectations were kept modest, in line with what might be reasonably expected from an international climate agreement, rather than ratcheted to the stratosphere. The negotiating process was far smoother than the one in Copenhagen, and indeed less contentious than any in recent memory. (That doesn’t mean that there weren’t serious fights – this was, after all, a negotiation.) Negotiators were pleased enough with the process to largely dispense with the usual leaks and often-nasty attacks that typically characterize UN climate summits. The deal concluded also contains many legally binding elements. That may not matter much as a matter of substance (countries violate legally binding international agreements all the time) but it is a stamp of seriousness in many countries that matter. All of this should sum up to make the Paris Agreement appear more legitimate in peoples’ eyes, and thus tougher for countries to backtrack on. What to Watch to See if Paris Really Succeeds Still no one should judge the Paris Agreement too quickly. Its first test will be in the coming days and weeks as leaders and major media around the world talk about the deal. What leaders say will signal how much they see the Paris deal as settled and how they interpret the language that treats developed and developing countries differently. How the media describe the Agreement will shape how the broader public views it, and hence how much of a penalty leaders might face for later backtracking or spinning what the deal says. Its next trial will be at the next UN climate summit in November 2016 in Morocco. Part will be substantive: How will countries flesh out the provisions for transparency, review, and updating of national efforts that are outlined in the Paris Agreement? Part will be more fundamental: How many of the fights that the Paris Agreement appears to resolve will be refought? The biggest test will come in 2020 when countries are supposed to contribute new emissions-cutting plans. Will they actually do that? The Kyoto Protocol was supposed to be a lasting structure for climate cooperation. Countries initially made commitments for the 2008-2012 period and were supposed to extend those to a second “commitment period” around 2009, allowing the Protocol to evolve. When most decided not to do that, Kyoto was effectively dead, and negotiations proceeded to focus on rewriting the entire climate regime. Paris is the result of that process. Like the Kyoto Protocol, the Paris Agreement aspires to be an enduring framework for international climate cooperation. If countries follow the Agreement and come to the table in 2020 with serious new climate efforts, Paris will have succeeded where Kyoto failed, and will establish itself as a more enduring international framework. The Bottom Line The ultimate test of any climate change effort, of course, is whether it substantially reduces the risks of dangerous climate change. We will not know whether Paris meets this test for a long time. The Paris Agreement could survive as an international framework even as national actions on climate change turn out to be woefully inadequate to dealing with climate change. This could be the case even if the Paris Agreement were perfect (which it is not) since it is national politics and policies, not international agreements, that are the prime drivers of emissions-reducing actions. Paris looks like a success in part because, understanding that national politics and policies are paramount, its organizers wisely downplayed expectations for any deal. No one should forget that it is these modest expectations that Paris has largely met. For the time being, though, the Paris Agreement deserves applause. It is a far sounder substantive foundation for international climate cooperation than the Kyoto Protocol ever was, and appears likely to enjoy much more legitimacy and thus staying power than the Copenhagen Accord ever managed. Foreign policy should be judged against the realistically available alternatives – and Paris, whatever one might reasonably say about what it doesn’t do, looks like a success against that measure. Now the hard work of building on it, within each country and internationally, begins.
Alyssa Ayres: India at Paris - Working with a Rising India
India’s status as a large developing country and a major emitter complicates its position at the Paris climate talks, writes Alyssa Ayres in this guest blog post, but there are signs that its delegation is working more constructively than in years past toward a deal. This piece is part of our guest series surrounding the UN talks in Paris. Previous posts addressed deforestation, short-lived pollutants, climate change and conflict in northern Nigeria, international climate institutions beyond the UN, and China’s rhetoric on climate. A reader could be forgiven her confusion at the extreme dichotomy in perspectives offered by Indian and American media covering the Conference of Parties (COP21) climate negotiations in Paris. The U.S. press, cartoonists included, has highlighted India as a hurdle at best, spoiler at worst, to achieving a strong, effective agreement. The Indian press has characterized the United States as a “bully” unwilling to make deeper emissions cuts at home but harshly pressing the poor to do so, balking at more funding to help developing countries adapt to climate change, and resisting proposals for liability for future environmental damage. In contrast, both countries perceive themselves as taking important steps to bring about domestic and international consensus to limit climate change. While the negotiations will continue throughout this week, a few observations can be made from the talks so far in thinking about how a rising India views its global role. First—and though obvious, it bears repeating—despite having entered the ranks of the world’s top ten economies last year, and despite its potential trajectory to become a $10 trillion economy in the coming decades, in global negotiations India sees itself squarely as a developing country. There’s no question that the scale of India’s development needs dwarf those of every other country on the planet; that is not in dispute. But at the same time, the magnitude of India’s effect on the world, particularly on the environment as its economy continues to grow, has put India in the frontlines due to its behemoth size. Scale is everything, as India’s current air quality problems illustrate. Like in China, urban Indian citizens are already suffering from the toll rapid economic growth has taken on the environment; last year the World Health Organization declared Delhi’s air the most polluted in the world. (While negotiators burrowed deep into bracketed text in Paris last week, back in India the Delhi High Court ruled that living in the city was like “living in a gas chamber,” an indictment of business as usual if there ever was one.) Second, despite the impression conveyed in some articles that India (alone) stands between success or failure in Paris, reinforced by Secretary of State John Kerry’s description of India as a “challenge,” it appears that India is far from isolated. And a major issue on which India has a broad slate of support from the Group of 77 concerns climate equity, or what Indian writers refer to as “carbon space.” India and many other developing countries resent being asked to curb emissions to solve a problem that the developed countries created over time, and particularly given their low per capita carbon emissions levels compared to those in the West. As the climate experts Navroz Dubash and Radhika Khosla argue in Time.com, India has accounted for just “3% of global greenhouse-gas emissions since the industrial revolution, compared with 27% for the U.S.” More than 300 million Indian citizens still live without access to basic electricity, and India faces enormous infrastructure needs, so the argument that India still needs to deliver more on development at home at lowest cost before it can definitively shift to more expensive energy sources appeals to a basic logic. Third, while India has famously employed the power of “no” to scuttle other multilateral negotiations—think of the 2008 Doha Development Round, or the abrupt dissolution of the Bali Trade Facilitation Agreement in July 2014—the India that showed up in Paris came with a proactive proposal to shape global behavior in a direction that suits India’s energy security and economic interests. Prime Minister Narendra Modi, long an advocate of solar power, joined with French President Francois Hollande to inaugurate a new international solar alliance. The alliance declaration emphasized “sustainable development, universal energy access, and energy security,” along with the importance of making “clean and renewable energy…affordable for all.” Given India’s solar energy generation potential, and its stated commitments to rapidly scale up its production to one hundred gigawatts by 2022, the initiative puts India in a global leadership role on an energy policy it has already committed to deliver at home. The solar alliance leverages India’s strengths on solar with a call for greater global commitment to equity by finding ways to bring down the cost of solar technology for poorer countries. Relatedly, and finally, reports suggest that the Indian delegation in Paris is ready to deal rather than risk a global deal. India’s environment minister Prakash Javadekar told the press that, “India is looking positively to the final outcome from Paris and India will be flexible and show the world that though India is not part of the problem, still is facilitator for the solution.” This stance is very different from the single-issue veto-power approach India has at times employed in multilateral consensus settings. In July 2014, by contrast, India’s commerce minister—explaining her country’s objections to the Bali trade agreement India had already signed onto seven months earlier but then refused to ratify—framed her position as a tactic of using the best tool available (veto) to force discussion on a topic India felt had been sidelined. As the negotiations continue throughout this week, we will see further how India’s aspirations to be a “leading power, rather than just a balancing power” shape its appetite for concessions. The coming days will also show us how effectively New Delhi’s new approach delivers productive outcomes that address Indian concerns while advancing the larger global goal at the same time.
Jennifer Harris: Don’t Underestimate the Importance of Forests in Paris
Deforestation is a critical source of carbon emissions that should not be overlooked in climate negotiations, argues Senior Fellow Jennifer Harris in this guest blog post. Her piece is part of our ongoing guest series surrounding the Paris climate talks, with previous posts on short-lived pollutants, climate and conflict in northern Nigeria, international climate institutions beyond the UN process, and China’s climate rhetoric. It’s true that all politics is local, and that climate change is no exception. But it’s also true, especially when it comes to abating carbon emissions, that some localities matter more than others. How closely leaders heed this corollary in the ongoing COP-21 negotiations—how single-mindedly they “follow the carbon,” in other words— may well determine our success, in Paris and after. Certainly, negotiators in Paris are rightly, raptly focused on the world’s largest emitting states, present and future. But “follow the carbon” will need to become an organizing principle for more than simply triaging countries by carbon footprint. It will need to be zealously applied to the overall balance of Summit priorities; to the country pledges themselves; and to how assistance dollars are structured. To understand what a more disciplined “follow the carbon” rule might look like, take the issue of deforestation. Beginning with overall Summit priorities, it is hard to overstate the importance of deforestation to climate outcomes. The conversion of forests and peatlands marks one of the biggest sources of carbon emissions in the world – and hence one of the world’s most significant abatement opportunities. Deforestation alone accounts for at least twelve percent of human-caused CO2 emissions, the second-greatest source after burning fossil fuels.  For many developing nations in the tropics, deforestation is the largest source of emissions.  Halting and reversing deforestation could shrink climate emissions by as much as twenty-four to thirty percent. In short, unless the final COP-21 declaration gives deforestation due priority, leaders will be hard-pressed to reach a deal that stabilizes warming below two degrees Celsius. While the initial signs and murmurs emerging from Paris contain some reasons for optimism, meaningful progress is by no means a sure bet. A joint statement released Monday by Norway, the United Kingdom and Germany pledged increased financial and technical support for the world’s leading deforestation initiative, known as Reducing Emissions from Deforestation and forest Degradation (or REDD+). But the funding increases are contingent on commitments and actions by other countries, and more broadly, it is not clear that this progress is enough to compel negotiators to prioritize deforestation in the final COP-21 declaration. As others have noted, forests do not always figure into climate negotiations as significantly as they should – and sure enough, when the UNFCCC secretariat circulated a draft of the Paris agreement earlier this fall, they left REDD+ out. They added REDD+ back to the starting draft for the Paris talks, although with bracketed language indicating that consensus has not yet been reached. If this time is to be different, the final COP declaration will need to include strong, specific deforestation and land use commitments by the most heavily forested countries, and credible funding mechanisms to help these governments deliver. A more rigorous, “follow the carbon” approach should go beyond assigning greater overall priority to deforestation, to rethinking how we tackle it. REDD+ and other deforestation efforts are already well focused on the handful of countries with the most carbon-dense forests, such as Brazil, Russia, the Democratic Republic of Congo (DRC), and Indonesia.  But too often, this focus stops at the borders of these countries, content to diagnose problems as national in scope when the reality is somewhat different. While deforestation in Indonesia, for example, is a nationwide problem, carbon emissions from deforestation are concentrated in two provinces, Riau and Central Kalimantan. As my colleague Michael Levi and I noted in October, even partial action to help conserve Indonesia’s forests (say, in these two regions alone) could prevent carbon emissions on a scale comparable with U.S. President Barack Obama’s power plant regulations or the U.S.’ new fuel economy standards. And because Indonesia’s deforestation-linked carbon emissions are so geographically concentrated, it is also likely that one could design a robust deforestation plan for Indonesia—one that would curb the majority of deforestation-linked carbon emissions, while providing new funding for smallholders—for a reasonable sum. Likely less, possibly much less, than $1 billion. That dollar figure matters because Norway has established a pay-for-performance fund that would offer up to $1 billion each to several countries (Brazil, DRC, and Indonesia, included) in exchange for progress in combating deforestation. In the case of Indonesia, only $50 million of this $1 billion has been disbursed. In other words, this is not a problem that could certainly benefit from— but does not necessarily require— additional money. Any sort of breakthrough deal would, though, require that existing funds be restructured not just to reward progress but to hasten it. That, in turn, means sharper focus by Western donors. Thus far, U.S. assistance to Indonesia has focused overwhelmingly on renewables. Important as this work is, it is no substitute for progress on deforestation, which accounts for more than sixty percent of Indonesia’s carbon emissions.  The announcement earlier this year that the World Bank and Indonesia will enter a new, five year partnership on “infrastructure and poverty reduction schemes,” backed by $10 billion in new financing, is welcome news; what remains unclear is where sustainable land use and deforestation will rank among the partnership’s priorities. Not least, breakthroughs will require significant political will on the part of those governments closest to these carbon-dense lands. Recent commitments by Indonesian President Jokowi suggest that the Indonesian government is finally seeing its deforestation problem with new urgency. Here again, however, a more disciplined “follow the carbon” approach should not stop with Jakarta. Given the relative strength Indonesia’s regional and provincial governments hold within the country’s political system—not to mention their inevitable role in enforcing deforestation measures—negotiators in Paris should consider offering portions of the pledged climate finance directly to Indonesia’s provinces. If negotiators are to make meaningful progress toward stabilizing warming below two degrees Celsius, they will need to “follow the carbon” wherever it leads. Certainly, plenty of the most significant abatement opportunities will reside with the national governments of the largest emitters, like the U.S. and China. Others, though, lie hidden within a handful of rural provinces that matter far more in climate terms than their landmass or population might suggest. We need to be dogged in pursuing both.
  • Economics
    How India Could Actually Reach Its Audacious Solar Targets
    PARIS—Under Prime Minister Narendra Modi, India has set a dramatic target for solar power: 100 Gigawatts (GW) by 2022, or more than half of all solar installed to date globally by the end of 2014. Back in March, I questioned whether these targets were realistic, given that India currently has less than 5 GW installed today. But after digging into India’s progress to date, asking Modi administration officials about the sincerity of their target, and understanding the calculus of Indian and foreign solar developers who are pledging billions of dollars of solar investment, I am turning into a believer. India’s target, still aspirational, could actually materialize. Today I, along with Gireesh Shrimali and Dan Reicher of the Stanford Steyer-Taylor Center on Energy Policy and Finance, released a report arguing that India’s solar ambitions are both reachable and central to the climate commitments that India volunteered ahead of the ongoing Paris Climate Change Conference. You can read the Wall Street Journal’s coverage of our report here, and you can read the full report here. In a nutshell, our study reaches three conclusions: First, for solar power to succeed as a serious climate tool in India, it will also need to deliver an array of domestic co-benefits—from improving power reliability and access to electricity to cutting air pollution and energy imports—thereby building significant political support and investment to dramatically ramp up solar deployment. Second, three very different segments of the solar industry—utility-scale, distributed, and off-grid solar—will be required to deliver both climate results and domestic co-benefits to India. Third, the Indian national and state governments, with the support of countries and institutions around the world, can advance the development of these diverse segments of solar by pursuing four building blocks of a successful solar strategy: reform the utility sector; harmonize federal and state policies; secure substantial and cost-effective financing; and foster the diffusion of technology and standards from abroad. With these building blocks in place, India can greatly accelerate the deployment of solar power and with it progress toward the world’s climate imperative. In this post, I want to share some of the insights from my recent trip to India, a whirlwind tour from the deep southern states of Kerala, Karnataka, and Tamil Nadu to the capital city New Delhi in the north. Here are four on-the-ground insights about the challenges and opportunities facing India as it ramps up its deployment of solar: 1. There is a tension between foreign optimism and domestic cynicism. Every time I spoke with a foreign solar developer or investor, I heard a similar, soaring story of unbounded opportunity. If coal, the dominant power source for India today, were the only option to sustain present economic growth of 7–8 percent annually, India would have to build around 15-25 GW of new coal plants every year. But India has no chance at building that much coal every year, because of obstacles to increasing coal supply and the low investor appetite to build new coal plants, given that existing plants are increasingly unprofitable. That means the opportunity for solar is enormous to meet India’s insatiable appetite for power as its economy grows. Importantly, because the “capacity factor” of solar is about 20 percent (i.e., solar actually only generates about a fifth of the energy that it would generate if the sun were always directly overhead), 15–25 GW of demand for coal converts to somewhere between 40–75 GW of demand for solar every year. Just tapping a small fraction of that new demand every year will enable India to quickly reach its 100 GW goal and more. But not everyone was boundlessly optimistic, and in general I found that domestic solar developers used their previous experience doing business in India to temper wild expectations of growth. Interestingly, many domestic solar developers are actually successful businesses in other sectors that have pivoted into solar energy, recognizing the business opportunity. But their experience elsewhere—from textiles to thermal power—is that infrastructure transformations move slowly in India. Finding large tracts of land, securing permits, and driving down the high cost of domestic debt are some of the myriad barriers that solar developers face. Extrapolating from the high rate of stalled infrastructure projects in India, these developers infer that solar adoption will increase steadily but slowly. The answers to two questions separate the optimists from the pessimists. First, will the solar transformation resemble the rapid build-out of telecom infrastructure like cell towers, or will it resemble most other infrastructure programs that are halting and troubled? And second, will the Indian economy’s 7–8 percent economic growth pull solar power into the market to fuel rising demand, or will the difficulties of building out new power infrastructure hold India’s economy back? These are questions that the policymakers in the Modi administration are grappling with as they try to remove obstacles from solar’s path that have tripped up other infrastructure projects. But after meeting with several officials, I am struck by their sincere conviction that the 100 GW solar target is achievable. 2. Recent bids for utility-scale solar are unsustainable, but solar in general is already very competitive with coal. Everybody was talking about SunEdison’s astonishingly low recent bid: the company promised to charge fewer than 7 cents per kilowatt-hour (kWh) to sell power to the state of Andhra Pradesh from a 500 MW solar project. Most developers and engineering companies I talked to scratched their heads wondering how this low price could possibly result in SunEdison making money off the project. And many Indian energy analysts used this data point, along with SunEdison’s recent woes, to infer that solar is not actually competitive. Rather, they contend, at present solar is only artificially competitive because companies are bidding numbers that they cannot possibly deliver (at least profitably). But 7 cents/kWh need not be the figure of merit to justify solar’s competitiveness. Indeed, 9 cents/kWh is the rough cost of power from new coal power plants, which is what solar power must compete with. This is a crucial insight—existing coal power plants that are already fully depreciated can afford to sell power at prices below 6 cents/kWh. But remembering that solar developers aim to serve the new power demand to fuel India’s economic growth, solar power’s relevant competitor is power from new coal power plants. Whether or not the SunEdison bid is sustainable or not, most developers and public officials I talked to agreed that 8 cents/kWh is a sustainable price for solar power plants to charge, and at that level, solar is still very attractive as a new source of power. 3. After a slow start, distributed/rooftop solar deployment could soon take off. As is evident in the figure below from our report, the deployment of smaller-scale solar (i.e., less than kW-scale projects, often on rooftops, that are tied into the urban distribution grid) has increased much slower than that of utility-scale (> 1MW) solar. In fact, of the 4.5 GW of solar currently installed, roughly 4 GW is utility-scale solar, even though distributed solar is supposed to account for 40 GW of the total 100 GW Modi administration target. Nevertheless, in my conversations with state government officials and utility regulators, I gathered that distributed solar is gaining momentum. State regulators in India are grappling with some of the same problems as we have been dealing with at the state level in the United States—for example, should states allow “net metering,” in which distributed solar power production can offset purchases from the grid, and at what rate should utilities compensate solar power for their exports to the grid? A majority of Indian states have now adopted net metering policies, and the trend is toward policies that make it worthwhile to install distributed solar. Distributed Solar Deployment is Projected to Dramatically Lag Official Targets   Still, more policy support is necessary to drive financing toward the distributed solar sector, especially to support third party financing models, which have driven rapid distributed solar adoption in the United States. One area for improvement is to ensure that federal tax credits (e.g., accelerated depreciation) apply to third parties who finance distributed solar. Another policy suggestion—which I heard from Tobias Engelmeier from the Bridge to India consultancy—is to make it easier for a third party who owns a distributed solar asset to sell the power to a customer other than the one on top of whose roof the solar panels sit. This could reduce default risks faced by third party financiers if the customer who owns the roof cannot pay for the power. It also foreshadows a business model in which a third party developer builds a microgrid in an industrial area, connecting up several rooftop solar systems to offer a robust, self-sufficient alternative to the grid to businesses in the area. 4. Business model innovation is the most important opportunity for off-grid solar. I entered India under the assumption that off-grid solar was an economics play against kerosene. If a developer can provide energy—through a solar home system or a small “microgrid” powered by solar panels and batteries—that is cheaper than the energy from kerosene used for lighting and heat, then off-grid solar should naturally succeed. Unfortunately, because the government heavily subsidizes kerosene, the per-kWh cost of kerosene energy is often lower than the per-kWh cost of off-grid solar systems. Therefore, I assumed, off-grid solar just could not take off until politicians solved the heretofore intractable problem of subsidy reform. In fact, I found out that the economic comparison of per kWh costs between kerosene and off-grid solar has very little to do with whether off-grid solar can succeed. Rather, off-grid solar will succeed if it provides energy services that customers value—not kilowatt-hours of electricity that customers find inexpensive. Thus, if an off-grid developer (like Selco, whose founder Harish Hande was kind enough to explain all of this to me) offers an electric sewing machine to boost economic output, or a television set that the whole community uses to watch cricket, then rural customers will be very willing to reliably pay for off-grid solar every month. Currently, off-grid solar systems that only power lights, fans, and cell-phones face serious collection issues, because rural customers can miss a payment and tolerate service interruptions. But when innovative companies provide services that anchor the livelihoods and entertainment of customers currently off the grid, they will access a vast, untapped market and improve access to energy. Each of these four insights entails opportunities for solar but also immediate barriers that India will have to surmount. My final day in Delhi, the air pollution was so bad that the government announced an emergency scheme to take half the cars off the road. Solar, if deployed as a diverse mix of centralized and decentralized installations, can help alleviate air pollution and achieve several other domestic co-benefits at the same time. For this reason, Prime Minister Modi has referred to solar as India’s “ultimate energy solution.” But can his administration execute a wide-ranging strategy to realize this potential? After asking a lot of hard questions, I’m now willing to bet that the answer is yes.
  • Climate Change
    Molina and Zaelke: Cutting Short-Lived Pollutants Can Give Quick Wins on Warming
    Policymakers should look to reductions in potent, short-lived pollutants to reduce warming faster than cuts to carbon dioxide emissions alone, write Nobel Prize-winner Mario Molina and Institute for Governance and Sustainable Development founder Durwood Zaelke in this guest post. This piece is part of our ongoing guest blog series surrounding the Paris climate talks, which has included posts on China’s political rhetoric, international climate institutions beyond the UN talks, and the links between climate and conflict in northern Nigeria. The Paris meeting to negotiate a climate agreement is about spirit and trust as much as any specific numerical emissions target. This is because whatever the delegates are prepared to agree to in Paris will not, on its own, slow warming fast enough to keep us safe. This doesn’t mean humanity is doomed. But it does mean that negotiators need to reach an agreement that fosters a level of trust and a spirit of urgent optimism to raise our ambition after Paris, both as the Paris agreement evolves in the coming years, and, immediately, through other national and international venues. And it means that policymakers need to look beyond the national carbon dioxide (CO2) limits that are the primary focus at the Paris talks, to the highly potent short-term climate pollutants that can make a faster contribution to limiting warming. Targets and Timelines The nominal upper warming limit, driven by economics and politics more than science, is that temperatures should not be allowed to increase more than two degrees Celsius above pre-Industrial levels. But the impacts already being seen at the current increased warming of about one degree Celsius strongly suggest that two degrees is too risky. At this point, the rate of the warming is becoming as important as the absolute limit. The rate is accelerating and in the process triggering self-reinforcing feedback mechanisms, where the initial warming feeds upon itself and causes still more warming. One illustration is the reduction of Arctic sea ice, a white shield that reflects incoming solar energy back to space. The warming since 1979 has reduced the ice shield enough to add another quarter as much warming as carbon dioxide caused during this period. Another example is the northward migration of permafrost, where soil that was once permanently frozen is now melting and releasing methane that causes still more warming. At the current accelerating rate of warming, there is not enough time for ecosystems to adapt, nor to protect food production and economic development. The rate of warming needs to be reduced quickly, to slow these feedbacks, and to reduce climate impacts that are already hammering many areas of the world, including floods made worse by climate change such as those that have been destroying parts of India in recent days, and the sea-level rise and more powerful storm surges that are already damaging low-lying island and coastal countries. Lever One: Carbon Dioxide Emissions There are two main levers to slow climate warming. The first lever is to reduce the carbon dioxide emitted when coal and other fossil fuels are burned. To insure long-term stabilization of climate pollutants this lever should be pulled, now, as fast and as far as possible, promoting energy efficiency and clean energy sources to slow and ultimately halt carbon dioxide emissions. Forests and other natural processes that pull carbon dioxide from the atmosphere must also be protected. But, while it is essential to pull back this carbon dioxide lever, it does not do enough to cut the current rate of warming: by mid-century an aggressive effort to reduce carbon dioxide can avoid about 0.1 degrees Celsius of warming, out of an expected two degrees Celsius or more of warming by 2050 under business as usual. Lever Two: Short-Lived Climate Pollutants This means policymakers need to pull back the other lever and reduce the short-lived climate pollutants, including black carbon (soot) air pollution, tropospheric ozone (the principal component of smog), methane, and hydrofluorocarbons (HFCs) — factory-made gases used in air conditioning and refrigeration. Pulling this lever can avoid about 0.6 degrees Celsius of warming by mid-century, much more than the carbon dioxide can in this same period. At the end of the century, the avoided warming from cutting the short-lived climate pollutants is 1.5 degrees Celsius compared to 1.1 degrees for carbon dioxide. Strategies that reduce short-lived climate pollutants provide fast mitigation that can slow the rate of warming this decade. While all climate models have uncertainties, there is little doubt about the relative speed at which these strategies can produce their results. Black carbon stays in the air for only a matter of weeks, and methane and most HFCs last only for one or two decades. In contrast, carbon dioxide can last far longer—five hundred years to thousands of years. Both the carbon dioxide and short-lived climate pollutant strategies are essential at this point—and probably still-to-be developed carbon removal strategies will be, as well. Paris and Beyond During his speech in Paris, President Obama noted what may be the fastest strategy available today. He first reminded the world that climate is changing faster than our solutions and that one of the enemies is cynicism—the notion that humanity can’t do anything about it. But he added that that last “month in Dubai, after years of delay, the world agreed to work together to cut the super-pollutants known as HFCs. That’s progress." And such progress should give people hope. The strategy to phase down HFCs under the Montreal Protocol was initiated by the Federated States of Micronesia and other low-lying states, and then championed by Mexico, Canada, and the United States,  which negotiated bilateral agreements to support the HFC phase-down with China, India, Brazil, and Pakistan. The HFC phase-down will eliminate warming from one of the six main greenhouse gases, avoiding up to 0.5 degrees Celsius by the end of the century, and the equivalent of up to 100 billion tons of carbon dioxide by 2050. Parallel improvements in the efficiency of the air conditioners as manufacturers phase down HFCs refrigerants can avoid another 100 billion tons of carbon dioxide by 2050, according to a recent report by the Lawrence Berkeley National Laboratory. With the threat of terrorism on everyone’s mind in Paris, many are asking what the connection may be with climate change.  The answer is that climate change is the envelope within which all of society’s other problems are unfolding. If the rate of warming continues to accelerate, and if impacts including sea-level rise and super storms continue with greater frequency, then the world will have to divert more and more of its scarce governance resources to conflict management, disaster relief, and the resettlement of millions of climate refugees.  The wiser and more economic course is to cut the rate of warming immediately by cutting the short-lived climate pollutants as fast as possible. When the Paris talks conclude there must be a new level of not just trust and optimism, but also a far greater appreciation of the urgent need for speed, which must become the rallying cry going forward. Mario Molina, who shared the Nobel Prize in Chemistry in 1995 for his work on chlorofluorocarbons in the atmosphere, teaches at the University of California, San Diego, and is President of the Mario Molina Center for Strategic Studies, in Mexico.  Durwood J. Zaelke is the founder of the Institute for Governance and Sustainable Development, and co-directs a related program at UC Santa Barbara.