India's massive energy needs offer the US — and by implication, Canada — new ways to build a global energy strategy.
For the past seventy years, one of the features of the international economic system (which the West benefited from) was continuous access to relatively cheap energy and an unlimited right to emit carbon into the atmosphere. Take away either or both of those features and the system changes significantly. So from the emerging powers’ perspective, if the West is not serious about mitigating climate change or refuses to absorb the lions’ share of the costs of a transition to clean energy, then it will be pulling up the ladder behind it.
For an American audience, it is perhaps easier to see this in the context of India rather than China. Put yourself in the shoes of a democratically elected Indian politician. There are still over 600 million poor people in your country — almost as many as in the rest of the world combined — and 400 million of them have no access to electricity. Many of them have no access to modern energy sources at all, such as modern cooking fuels. But India has a lot of coal and can import oil and gas — all carbon-emitting fuels. Is any democratic Indian government going to consign its people to a future of poverty because global climate negotiations with the West dictate that India cannot burn carbon the way the West did during its economic rise? It is impossible. There is simply no way that any Indian politician can argue that India should curtail its own growth — or put more sympathetically, its effort at poverty reduction — to accommodate the West’s belated concern for climate change. (In the United States, there is a parallel argument made about the need to continue to develop coal as a cheap energy source accessible to America’s poor — though of course the United States has more options than India on this front.)
Here, though, India and China face a dilemma: carbon emissions affect them directly. In China, the continued burning of huge volumes of carbon is producing pollution on an epic scale, such that it poses a political challenge to the legitimacy of the regime. India is also terribly polluted and faces a different challenge as well: access to water. A major source of its drinkable water comes from Himalayan glaciers, and India fears that these could be threatened as climate change picks up pace.
Neither country can avoid the reality of a changing climate. If they want to grow, reduce poverty, and at the same time not face a barren climate future, they have no choice but to engage with the West on navigating a movement away from carbon-based fuels. This may seem unfair — no, actually, it is, grossly unfair; but it is a reality. How fast countries are expected to shift from carbon-intensive fuels, and who pays what share of the cost, will be hugely controversial issues and will shape each country’s perception of the West. But there the simple fact that they cannot escape the consequences of climate change means that while the impulse to challenge unfair agreements and the impulse to rivalry may be strong in the realm of climate and energy, the core realities will necessitate some degree of restraint and cooperation.
There is a big bet that the United States could make, perhaps a surprising one, that would serve both to strengthen our strategic position and to improve the options for climate change. That bet is on clean energy in India. The math is simple and compelling. India has, as noted, 600 million poor people, with 400 million of them with no access to modern energy; and India’s population is set to keep rising. In spite of these figures, politicians in India feel that they have no choice but to continue to -pursue every source of energy, clean or not. India simply will continue to try to grow, and that inevitably means greater energy use in the near term. If India succeeds in doing what China did before, pulling 300 million people out of poverty, it means adding a population the size of Europe to the overall carbon emissions mix. They are certainly justified in doing this — what possible ethical or moral precepts could justify the West continuing to emit carbon while 600 million Indians languish in poverty. But this will crater any credible efforts to stabilize the climate.
That is, global climate mitigation will crater unless India develops on a green-energy pathway — or at least a less carbon-intensive pathway. To do this, India needs to invest between $50 billion and $100 billion over the next ten years in natural gas infrastructure, renewables, and clean building technologies. Even that sum does not capture the scale of resources necessary when considering what needs to be done at more local levels. As India’s rural poor increasingly move to cities, its cities will require new infrastructure; 70 percent of its buildings of 2050 have yet to be built. If these are built with existing building technologies, massive carbon emissions will be built in. The new building can be done with green technology, but India by itself does not have the resources — financial, technological, or planning — to manage it.
So India is going to need help if it is going to navigate the clean energy transition it now faces. Granted, it could reprioritize its spending and cut down drastically on its navy and other defense spending. But here is the thing: the United States does not want it to. As long as China increases its defense budget, the United States wants India to do so, too. As long as China is investing in its blue-water navy, the United States wants India to do so, too. It is profoundly in the U.S. interest that there be a strong and growing India, an India that is domestically stable and contributing to a stable Asia and Indian Ocean.
The United States can make a critical difference here. It could reapportion part of its international development budget toward India’s effort and push for greater allocations by the World Bank and other international institutions. It could create a way for U.S. cities that have successfully used clean building techniques to work with Indian cities. It could invest in Indian education in urban development that uses the latest science.
This is the only way India can navigate the energy transition it faces — and also the only hope of stabilizing the climate. If the United States takes the lead on helping India navigate toward clean energy — not using climate negotiations to pull up the carbon ladder behind it but using bilateral ties and the MEF [Major Economies Forum on Energy and Climate] to offer to help build a clean energy ladder for India — it could be the kind of investment that cements ties between these two countries…
In the strategic debate about the great powers, energy and, even more so, climate change are often treated as stand-alone issues. In fact, in the emerging powers’ perceptions of great-power relations and international order, energy and climate loom large and are inseparable. Balancing the emerging powers’ continued thirst for energy with the intensifying pressures to find a credible climate change regime will be a major test of American leadership in the decade ahead — and beyond.
It could be argued that America’s growing ability to provide for its energy needs from domestic supply and from its own region (drawing on Canadian, Brazilian, and Venezuelan supplies) means that it is uncoupled from global energy insecurity. This is a very partial truth. The fact remains that should there be major disruptions to the flow of oil from the Persian Gulf, the global price of oil will rise steeply — and Americans will feel the effects of that immediately, especially in gasoline prices. And American allies, not just putative adversaries, will be badly affected. The U.S. energy position is an important fallback should relations with China or other emerging powers deteriorate. In the meantime, though, the country should use its strong energy position (coupled with its still-dominant global naval position) as a carrot, not a stick. The United States has something that all the rising powers need, and it should be willing to continue to supply it as long as the rising powers begin to deal responsibly with energy exploration and, in time, contribute to the security of energy flows.
The starting point should be using the country’s increasing energy security to reinforce alliances, through approval of natural gas sales, in particular. But what should immediately follow goes beyond allies: countries like India should be high on the list of recipients of energy. And with India, there is a double reason: to solidify the relationship and to secure an ally in climate discussions.
But the United States is also going to have to take the lead in driving new arrangements for energy security at the global level, including bringing the new major consumers into a coordinating mechanism. Most proposals to deal with this suggest bringing the emerging powers into the International Energy Agency, a subsidiary body of the OECD, which in November 2013 created an “outreach mechanism” for relations with the emerging powers. However, such outreach mechanisms have been tried before, by the G-8 and the OECD, and they tend to underperform. The psychology of rise, and the instinct of these states to avoid participating in unequal treaties, means that the rising powers hesitate before engaging with a body whose rules they had no role in shaping and in which they are structurally outvoted. More likely to succeed is a forum in which Western and non-Western powers already sit together, such as the Major Economies Forum or the G-20. These bodies bring together the right countries on the right terms. There is a problem in that the domestic bureaucratic arrangements of these bodies are often staffed by the wrong parts of government (frequently environment and finance ministries, rather than energy and foreign policy ministries) — but that is comparatively easily fixed. And these bodies can draw on the existing tools of the International Energy Agency without those having to be renegotiated — as the G-20 has drawn on the technical capacities of the IMF.
When it comes to climate, the most practical thing is to pursue a back-to-basics approach, which combines a focus on natural gas (which emits carbon at roughly half the intensity of oil), efficiency, and joint investment in renewables. Here, the concentric circles start with the United States and China, where these two largest emitters can lead the way by increasing energy efficiency and reducing carbon emissions. Then the focus can shift to India. Helping India navigate a pathway to clean energy growth is win-win in terms of climate and international order. More widely in Asia, the United States can play a critical role in helping the region develop a natural gas infrastructure. Long-standing tensions in the region — among China, Japan, Korea, and Russia, in particular — will impede regional cooperation; but the United States can help the region not only develop a shared gas infrastructure but also reduce carbon emissions. Beyond that small circle, the Major Economies Forum offers wider action. When there is real progress under way with the MEF, the UN can be brought in.
Some climate scholars have begun to imagine alternatives for global arrangements. Strobe Talbott and William Antholis, motivated by both economic and moral concerns, propose a mechanism for free trade in clean energy instruments modeled on the General Agreement on Tariffs and Trade, which promoted global free trade after World War II. Warren McKibbin, an Australian climate scholar and adviser, argues that the United States should use its dominant financial position to establish a price for carbon — and to leave it to global finance markets to figure out how to structure that into the market. Others look at the critical role that cities play and the possibility that clean energy action by leading cities could happen more quickly and more effectively than at the state level. Although some of these proposals are variously based on free trade principles, subsidiarity, or monetary policy, they align on three critical points: they work in concentric circles from the most important economies outward, they require diplomatic innovation, and the United States must lead the effort to establish them.
Excerpted from Still Ours to Lead: America, Rising Powers, and the Tension between Rivalry and Restraint (Washington, DC: Brookings Institution Press). © 2014 The Brookings Institution. Used with permission from the publisher.