| Climate change's impact on India's business, tech, finance, & politics. Analysed and explained every Wednesday. | Good Morning Dear Reader, Climate change is the most consequential story of our times. India requires $1.4 trillion over the next 20 years in financing green energy tech alone, according to the International Energy Agency. Just India’s electric vehicle transition offers an investment opportunity of $177 billion and a sales opportunity of $206 billion by 2030. You don’t want to read about this issue—perhaps the most important one of our lives—through a tinted prism as the world swings between denialism, adhocism, and fatalism. Because there’s a lot we can still do to save ourselves, not just the planet. Green Margins is a weekly newsletter that will bring you solutions-driven insights, because as individuals we might contribute only marginally, but as a collective we have to mainstream climate tech, climate finance, and climate policy. Like The Ken’s stories, Green Margins will be nuanced, facts-driven, agenda-free, and more importantly, accessible. Without alarmism (“The world as we know is coming to a hot end!”) or evoking guilt (“You are not doing enough.”), it’ll keep you updated on how the wheels of carbon move every week. Lastly, climate change is not a monolith, nor is writing about it akin to typical beat coverage. Its impact cuts across all sectors, regions, and entities. Having written for over two decades on a wide swathe of subjects—from science to deep tech to business—and having co-founded The Ken, I’ll bring to bear my experience and learnability to make Green Margins worthy of your intelligence, curiosity, and concern for the planet. Green Margins will land in your inbox at 7:00 am India time every Wednesday. I value having you as a reader and consider it my privilege to talk to you each week. Tell me how you find my stories and analysis by writing to me at greenmargins@the-ken.com. And finally, do be on the lookout for another brand-new newsletter from The Ken this evening! |  | Kiss The Target If you are not facing a power crunch in your homes already, you will shortly. Brace up. The energy crisis has hit Indian shores. On Friday, India said its 135 thermal power plants had an average of just four days of coal stocks, down from 13 days of supplies in early August. Among other things, unexpectedly heavy rains in September hit both the production and delivery of coal, a fossil fuel that accounts for 74% of India’s energy supply. It was also the day when India raised natural gas prices by 62%. This pales in comparison to the 500% price rise that Europe has seen lately, but you can imagine the cascading effect on fuel, cooking gas, fertilizers, and overall food inflation. Apart from the pandemic-induced supply disruptions, the volatility owes it to the energy transition that many regions, especially Europe, are making. Let’s just say the energy shortage is not because the world is moving away from coal, it’s because we don’t have enough renewables. How quickly we make the global green transition—from 80% fossil fuel today to 80+% non-fossil fuel energy by 2050 or later—will determine what shape we leave the planet in. Hotter by 1.5°C from pre-industrial levels and hanging on to somewhat-normal life; or hotter by 2°C with an additional 420 million people exposed to record heat. In three weeks, at the Glasgow climate summit, India will face tremendous pressure to declare its targeted net zero year. China, the world’s largest carbon emitter, has said it’d be carbon neutral by 2060. Emitter number two, the US, has set itself up for becoming net zero by 2050, decarbonising its power sector by 2035. India, the third largest carbon emitter, is silent on its net zero year. It has also not submitted an updated plan to the UN with higher carbon-reduction ambitions as required by the Paris agreement. And to an extent, rightly so. India’s stance has been that finance and technology must be made available to developing countries in the true “spirit of common but differentiated responsibility”. At COP-26 in Glasgow, the world will see up close how developed countries, the historical emitters, put their money where their emission is. They had promised to mobilise $100 billion per year by 2020 to support climate action in developing countries. The goal hasn’t been met. If all this sounds too macro, then it is. We are, in any case, past the micro stage. Planting a few million trees or electrifying a city’s transportation, enforcing rooftop solar or creating bicycle lanes, won’t cut it. We need wholesale action. Last month, the European Central Bank calculated the impact of climate change on 4 million companies and 1,600 banks in Europe over the next 30 years. It concluded that the costs of transitioning to a low-carbon economy is far less than the actual impact of climate change. In the worst case, where nothing is done to stop global warming, 10% of European GDP would be knocked off and there’d be a 30% rise in defaults on corporate loans to the most exposed companies. In India, the Reserve Bank of India (RBI) is warming up to the idea. Even though late, it joined the Network for Greening of the Financial Systems earlier this year. It is now also a member of the Basel Committee on Banking Supervision’s Task Force on Climate-related Financial Risks (TFCR). As the apex bank begins to focus on green finance, it’ll impact how Indian businesses raise funds for their projects. But like in all matters climate change, there is an equal and opposite PhD at work at every step. Former RBI governor Raghuram Rajan thinks it’s not the job of the central bank to talk of green finance: | | Asking the Central Bank to say you buy only green bonds, not brown bonds etc., is asking the central bank to impose its views on something which is primarily a fiscal matter. | | Raghuram Rajan, Former RBI Governor | | | Rajan’s successor, and ex-RBI governor, Urjit Patel thinks otherwise: | | If sustainability is a defining characteristic of potential output, then it has to incorporate climate considerations…Climate change is a damaging permanent shock to potential output and (not considering it in central bank policy functions) will lead to suboptimal policy choices | | Urjit Patel, Former RBI Governor | | |  | When I was starting out in journalism more than two decades ago, reporting on climate change was confusing, if not hard. Science was getting surer; scientists’ first warnings were clear, but every significant finding ended with “a margin of error” that couldn’t be ignored. Or at least some equal and opposite PhD ensured the uncertainties were played up. While the role of climate deniers among scientists has been well documented, that of another group has received less attention: economists. Recently, a Stanford historian laid it bare: Several high profile economists have, over the years, counselled against policy action on climate change suggesting that “global warming might not be that bad”. You see, economists have an inherent bias when they model—they overestimate costs and underestimate benefits. (Most economists are aware of these biases, yet they carry on.) Today, science is so sure that soon after the IPCC published Part 1 of the report Climate Change 2021: The Physical Science Basis in May, authors of the remaining two parts that were to be published in February and March 2022 leaked their reports. Why? As an act of rebellion—“there’s no time to wait around; there’s no time for continued inaction”. Yesterday, the Nobel Prize in physics was awarded to a group of three for their contributions to the “physics of climate and other complex phenomena”. The Glasgow meeting next month is the last ditch effort to get a global solution for humanity. The leaked Part II of the report says: | “Life on Earth can recover from a drastic climate shift by evolving into new species and creating new ecosystems. Humans cannot…We need transformational change operating on processes and behaviours at all levels: individual, communities, business, institutions and governments. We must redefine our way of life and consumption.” | | Climate Change 2021: The Physical Science Basis, Part II (Leaked Edition) | | | The key takeaway from this is that anything we do is to save “us”, not the planet. Because however hot the earth gets, it’ll continue in its orbit around the sun. Meanwhile, Newton’s third law of motion of equal and opposite reaction continues.
Jayant Sinha, a Member of Parliament and chairman of the Standing Committee on Finance, believes that India should “consider” laying a path to hit net zero by 2050. With commercial capital raises in mind, he believes that this goal could jumpstart green financing—which is larger than both government money or impact capital.
In the opposite camp is the union environment minister Bhupender Yadav. Flagging issues of climate justice, he has said, “The world needs rapid, sustained and deep emission cuts in this decade rather than distant targets.”
These tugs of war will intensify. Already in the startup community, there’s the electric vehicle camp that is getting all the limelight, and then there’s everyone else with their decarbonising tech and solutions jostling for attention.
Today’s Green Margins is a warm-up edition, to say we all have a hand in the solution.
Join me, we have a lot to learn and unlearn. | | | Share this Edition Here's the link to this edition for you to share. Or you can use the easy share buttons below | Take care. Regards,
Seema Singh | Climate change's impact on India's business, tech, finance, & politics. Analysed and explained every Wednesday Know someone who would like Trade Tricks? Want to receive Trade Tricks every week? | | Green Margins is published by The Ken—a digital, subscription-driven publication focussing on technology, business, science and healthcare. | Want to unsubscribe from our weekly newsletter, Green Margins? Click here. Or set your email preferences here © 2021 The Ken | | | | |
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