Need more irrigation, caution on West’s carbon imperialism: CEA Arvind Subramanian

Releasing a World Bank report on South Asia’s Hotspots: The Impact of Temperature and Precipitation Changes on Living Standards at the Indian Council for Research on International Economic Relations here, Subramanian also said that since agriculture and irrigation are state subjects, a mechanism like the GST Council is required for effective cooperative federal action in the areas.

The share of irrigated agricultural land in India is still less than 50 per cent, said Subramanian, who has announced his intent to leave the CEA post to return to research work in the US.

“The impact of climate change is much more severe in unirrigated areas... much more of India has to be irrigated. There needs to be a marriage of development goals with climate change action by increasing both irrigation and the efficient use of that water.

“India’s push to renewables is commendable, but it should be wary of the carbon imperialism of the West... this definitely exists,” he added.

The report says rising temperatures and changing monsoon rainfall patterns from climate change could cost India 2.8 per cent of the GDP and depress the living standards of nearly half its population by 2050.

The CEA elaborated that the real challenge for India is how to make its resources like coal less polluting.

“How do we make our endowments like coal greener and cleaner. The World Bank is no longer financing coal-fired projects.

“The only way to reconcile climate change and development is to clean coal. We need to get the social costing of renewables right so as to include assets getting stranded by the focus on renewables,” he said.

In the last Economic Survey authored by Subramanian, he said coal-fired thermal power should be encouraged, especially if one factors in the “social cost” of generating electricity from renewables for a country with a large population of poor.

Estimating the true cost of renewable energy at Rs 11 a kilowatt hour as against the much lower tariffs discovered through auctions, the Survey recommends going slow on renewables.

Subramanian elaborated later that overemphasis on renewables would result in reducing the viability of coal-fired plants, adding to the massive non-performing assets, or bad loans, of state-run banks.