Perspectives on Climate Policy: Embedding a development-centric, climate-ready approach to policymaking

Introduction

India is a rapidly growing country pursuing a range of challenging development objectives. Its continued growth and development – particularly in the face of a changing climate – will likely involve large structural shifts in its patterns of growth, urbanisation, and employment. Against the backdrop of this uncertain future pathway, India has also committed to decarbonising its economy over a multi-decadal timescale. To this end, it has instituted multiple targets and policies in relevant sectors, layering in further measures over time in response to evolving conditions. This approach has enabled the country to partially decouple its growth from emissions and grow its renewable electricity generation capacity over the last decade.

Like most countries, India has hitherto taken an opportunity-siezing approach to climate mitigation,green growth, and green industrialisation. But realising greater climate and development benefits requires coalescing these efforts into a strategic approach to low-carbon development that also builds climate resilience. Doing so can present significant opportunities to synergistically achieve these environmental and developmental benefits – navigating shifts in global economic conditions and the ongoing energy transition. Because the strategy-setting, coordination, and consensus building requirements of such a transition are large, such a strategy requires a capable state with a development-centric, climate-ready approach to policymaking. Such a policymaking approach requires 1) modelling capacities to estimate low-carbon pathways and their development implications; 2) institutions capable of coordinating and mainstreaming climate considerations to achieve greater coherence; 3) bureaucracies that work with industry to devise green industrial policy strategies; and 4) the ability to nudge and harness a financing ecosystem to steer investments towards low-carbon development (See Figure 1). A development-centric climate-ready approach to policymaking also requires revisiting the relative roles of the state and markets in steering the country’s low-carbon pathway and addressing problems of the global commons. The identification and appropriateness of these choices for the Indian context merits further study.

The Climate Policy group within SFC approaches policy challenges through a strategic lens, aiming for long-term structural change by shifting discourse, building stronger institutions, and aligning conditions for implementation.