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Art of constructive destruction

The vulnerability of ecosystems, and, therefore, human beings, has resulted in this enormous global effort being made towards tackling the problem of climate change. By themselves, temperature variations and climatic changes that are off the mean by a few degrees would not have meant very much if millions of livelihoods, and indeed lives, were not adversely affected. As such, it would be safe to say that this unprecedented global effort to fight climate change is about nurturing and protecting the vulnerable populations in the world. Why then did we choose to ignore the vulnerability of those businesses today that are contributing significantly to the emissions of greenhouse gases? If, indeed, the developed world has to bring down its emissions by at least 80 per cent of 2005 levels by 2050 - and the developing countries by a lesser amount - it does not require a genius to deduce that a number of businesses and activities would need to be closed or transformed radically.

The magnitude of the task ahead of the world - in particular, for the developed countries - is so huge that we tend to hide behind the comfort of statistics. Mitigation action, we assert, will not negatively impact GDP growth in OECD countries by more than 1 or 1.5 per cent. Undoubtedly, this is a lower cost than the cost of global adaptation that the developed countries should bear, but this is of little solace to the coal or oil industries, or the industries involved in the meat supply chains as so many others. The jobs lost in the affected industries would be more than made up by 'green' jobs. Try telling that to the petroleum engineer who can engage in little else, but has a family to support and a personal pride to protect.

Margaret Thatcher - the Iron Lady of the UK - shut down the coal industry in that country. India, on the other hand, is seeking backdoor entry points to loosen the grip of the public sector on this industry and sneak in the private sector and market forces so as to bring some semblance of viability into its operations. The political challenges of changing a way of life are so daunting that even the governments with the strongest mandates would hesitate to venture in that direction. What the world urgently needs is models of constructive destruction - destruction that would give rise to other opportunities with little or no lags in skill re-setting, but on accelerated time scales. Sunset and sunrise industries have been part of the evolution of humankind over the last century-and-a-half, but it is the time pressure of change and its consequences, as well as the spread of industries that need to be transformed.

The most obvious example of constructive destruction that we can easily recall in recent times is that of the telecom sector. In a short period of 10 years, India has virtually thrown out the fixed line phone industry. The mobile phone industry that has taken its place has itself transformed 2-3 times with replacement of technologies and expansion of access taking place at lightning speeds, but at which no one bats an eyelid. Someone may have calculated the net greenhouse gas emissions of this transformation, but the example here is to draw attention to the confluence of technology developments, policy support, entrepreneurship, consumer demand, easy skill migration and effective regulation that provided an enabling environment for this to happen.

How can we ensure such constructive destruction takes place in other relevant sectors? One critical sector from the point of view of climate change is the power sector. In India, we are mostly dependent on coal - one of the most polluting greenhouse gas sources - for power generation. Some tentative first steps have been taken in exploring alternative renewable energy options for electricity generation with the announcement of the National Solar Mission, which targets a new capacity of 20,000 mw by 2020.

While targets signal some long-term directions, we need to identify the weak links in the creation of an environment that would facilitate a capacity expansion beyond targets. Is the technology in place? Early versions of mobile phones were elite products - not mass consumption products. Telecom regulatory systems underwent turmoil with the first chairman being summarily removed. The auctioning process of spectrum has been under intense scrutiny for some time now. But we have learnt and moved forward. Solar power is considered to be expensive today. The policy establishment and regulators seem to be willing to experiment. Industry is engaged. The unmet demand in this sector is so huge that the immediate need for skill migration is mitigated. Maybe India has already embarked on a second process of constructive destruction.

Seen to be poised as an emerging economy, placed between the developed and the developing world, India is watched as a living laboratory of experiments for social transformation. Our responsibilities today extend well beyond the boundaries of this country.

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