A Shared Vision: Need for climate collaboration in South Asia

By Gaurav Bhatiani, Director, Energy and Environment, RTI International India

South Asia is extremely vulnerable to the impacts of climate change. Ac­cording to the World Bank, the region is already living through a new cli­mate normal and is experiencing inc­reased frequency of extreme weather ev­ents. Further, these events are geographically widespread, impacting citi­es, tow­ns and rural areas, and damaging econo­mic activity in agriculture, industry and services. The World Bank estimates that climate change will shar­ply diminish living conditions for up to 800 million people in the region. Given the co­m­mo­n­a­lity of impacts, cultural similari­ti­es and geographic proximity, it is impe­rative for South Asian countries to develop a sha­red vision and roadmap for climate ac­ti­on and financing.

An earlier effort, the SAARC Action Plan on Climate Change, which was adopted in 2008, did not yield much. A key reason is that cooperation in the past has been mired in geopolitics in the region. Ch­i­na’s economic emergence and inc­rea­s­ing influence in Nepal, Bangladesh, Pak­istan and Sri Lanka has made collaboration even more challenging. We have stressed on the role of trust and trade in the past, particularly in the context of en­­ergy cooperation. It is time for India to take the lead in building a transpare­nt, fair and mutually beneficial regional climate collaboration, given the rapid in­crease in climate risks, and addressing many of these requires collaboration.

Energy cooperation has been on the agenda for decades. While some prog­ress has been achieved, most action has been around relatively small bilateral agreements between India and one of its neighbours (Nepal, Bhutan, or Bang­la­desh). The discussion on a common ma­rket for the region is yet to be initiated. India already has a working spot ma­rket and a market for short-term con­tra­cts. Though relatively small, they wo­rk reasonably well and have demonstrated gains for consumers as well as generators. India has selectively allowed other countries to participate in the spot and bilateral markets. Several independent re­search studies have demonstrated economic gains from energy cooperation and trade.

Therefore, a dialogue needs to be initiated to evolve the common market. India is already considering moving to market-based economic despatch. Convin­c­ing co­untries to develop a common mar­ket will require adopting a strategic and long-term approach. A key aspect is to build trust and gain confidence by convincing interested countries that a common market will be a win-win for all. While several studies have theoretically demonstrated the advantages, stakeholders are still co­ncerned. For example, the role of private companies, driven primarily by co­m­mercial interests, is often viewed with suspicion. This may simply be a lack of familiarity with private companies given that the energy sector continues to be dominated by public utilities. This needs to be addressed.

Being the largest economy in the region with a significantly advanced energy se­c­tor, India must play an enabling role and demonstrate its willingness to in­cor­porate the interests of other countries. There are various ways to enhance trust and understanding, leading to the evolution of a common market.

First, a demonstrated commitment from the respective governments is critical. India should take the initiative to reactivate a regional energy group, SAARC, or otherwise. A biannual meeting with a structured agenda should plan and revi­ew progress to enhance energy cooperation in the region. The ultimate objective of evolving a common market and an in­tegrated grid should be the “North Star” for the discussions.

Second, India’s experience and learnings in renewable energy have relevance across South Asia, particularly the accelerated scale-up and low prices achieved through innovations brought by the MNRE, SECI, etc. Clean energy transition is of interest to many countries such as Bangladesh and Sri Lanka, given their growing demand, fossil fuel dependence and significant commitments under th­eir Nationally Determined Contribu­ti­o­ns. Bilateral cooperation with India will offer an opportunity to develop structured solutions based on individual circumstances. Alternatively, agencies su­ch as the International Solar Alliance can play an enabling role given their fo­cus on solar as well as the One Sun One World One Grid programme.

Third, the proactive sharing of information and knowledge about market products, prices, regulations and procedures will be seen as a positive step. It will en­sure that stakeholders across the region have access to all relevant information even if they are not actively trading. A step further is to conduct awareness sessions for utilities and stakeholders on a regular basis. These sessions sh­ould be led by staff from the regulators’ office. If re­quired, a dedicated regional energy co­­operation and regulation wing can be institutionalised. Further, market platforms and academic experts may be invited to contribute, and existing official platforms such as BIMSTEC or the Forum of Regulators can be used. It is, however, important to have high-level participation from the respective ministries to provide strategic guidance.

Beyond energy cooperation, there are at least three other areas to prioritise climate action in the region. First, enhancing the adaptation capability, that is, de­veloping resilience, given the reality of climate change impacts. A large population in many South Asian countries de­pen­ds on water from the Himalayan ri­v­e­rs and annual monsoons for survival and income. Noticeable deviations from long-term trends are causing floods and droughts across the region, resulting in da­mage to crops, homes and urban in­fra­­structure. Most importantly, lives and livelihoods are being lost. Therefore, it is crucial for all countries to work together to mitigate this challenge.

The collection and sharing of meteorological, hydrological and marine data can improve forecast capabilities. Joint activities and active collaboration will se­­rve farmers and the common man on the street and should be above politics. That such a collaboration is possible is evident from the World Bank-supported South Asia Hydromet Forum. A broader and more strategic engagement such as shared infrastructure, can enhance benefits by providing timely and accurate in­formation at a lower cost.

Further, many rivers flow across countries. Therefore, it is crucial to develop cr­oss-country joint adaptation projects including nature-based solutions such as check dams, wetlands and, wherever required, reservoirs to avoid floods and provide water during the dry season. Like­wi­se, projects for building coastal resi­lience and developing a blue economy can be a collaborative effort, given the shared interest in the Indian ocean. A jo­int working group comprising senior go­vernment officials should be constituted to evolve principles and action pl­ans for undertaking these projects.

Second, developing climate-resilient ag­riculture is crucial for food security and livelihoods in the region. Collaborative re­search and knowledge sharing on re­silient crops, improved agricultural pra­c­tices, water-energy nexus, and nature-based solutions can accelerate adaptation capabilities. Given the similar agro-climatic zones, food preferences and fa­rming practices, the agricultural sector can enable wider cooperation including active collaboration between universities, research institutes and people-to-people connections.

Last but not least, South Asian countries should jointly devise and implement strategies for enhancing climate financing for the region. While the loss and da­mage fund launched at COP27 is a positive, it will be at least a few years be­fore the actual funds flow through this mechanism. Even other existing mechanisms are relatively slow and insufficient. The­refore, it is necessary to develop shared mechanisms and products to meet the growing requirements for clean energy transition as well as adaptation. India has experience in issuing green bonds as well as some of the more innovative ins­truments such as the InvITs. Sharing this experience may be a first step towards developing an active collaboration. This will enable common standards, regulations and products. An example is to de­velop products for covering risks, such as parametric insurance, which off­er quick payouts based on the occurrence of a specific event, for example, a cyclo­ne. Given the frequent occurrence of ex­tre­me weather events, common regulations can enable market players to offer similar products, driving down the cost and increasing accessibility for a greater number of beneficiaries.

There has been significant damage over the last few years, and many have experienced loss and pain due to climate ch­ange. There is significant support for eff­ective government action. Develo­p­ing a shared vision and a collaborative action plan is a technically sound and a politically savvy move. The Hopi quote “One finger cannot lift a pebble” is appropriate, as we move forward to lift the clima­te change mountain. n

(The views expressed are personal and do not reflect those of the organisation.)