The world is constantly and almost instantaneously transforming right before our eyes. Given the complexity and interconnectedness of resulting emerging challenges it is advisable for policymakers to attempt to get ahead of the curve. This is exactly what the World Economic Forum’s “Outlook on the Global Agenda 2015” is envisioned to offer to a broad audience; namely, in the words of Klaus Schwab, Founder and Executive Chairman of the World Economic Forum, “a comprehensive overview of the world today, as well as an analysis of how [it is expected] to develop in the coming 12-18 months [while outlining] the nature of global trends, regional challenges, (…) as well as the emerging issues that should be on the agendas of global leaders.” The Forum launched its 2015 version of the “Outlook on the Global Agenda” at a respective summit held in Dubai in November 2014. The report identifies the Top Ten Global Trends (see entire report here) with “Rising Pollution in the Developing World” claiming the sixth position overall.
Everyone who travels to Beijing is familiar with the onslaught of toxic smog – where a breath of fresh air becomes a scarce commodity, almost unattainable within the Chinese urban confines. Tellingly, Zou Ji – Deputy Director-General of the National Centre for Climate Change Strategy and International Cooperation (China) – summarizes the ramifications of the outdoor air pollution problem – a direct result of the “biggest historical increases in power generation capacity” – as follows:
“The industrialization of the developing world is creating unsustainable pollution levels. Rising pollution in the developing world is ranked as the sixth most significant global trend this year – and in Asia it’s the third. (…) Even 2°C warming above pre-industrial temperatures – the minimum the world will experience – would result in 4-5% of African and South Asian GDP being lost and developing countries are expected to bear 75-80% of impact costs. (…) According to analysis by the Global Burden of Disease Study, air pollution in China contributed to 1.2 million premature deaths in 2010.”
Therefore, Zou Ji advocates for investments “in a power generation network that can replace coal, including renewables, nuclear and gas, and phasing out low-efficiency generators” and suggests that a ‘first-mover’ China is critical for other developing nations to follow suit in tackling climate change. His proposed measures include setting targets for renewable power generation and sticking with those targets, ensuring the proper regulation of high-polluting industries, and promoting clean energy in general, thereby reasoning “that once high-carbon solutions have been implemented, they are difficult to replace. This means the decisions being made today on power generation, and the way our cities and transport networks are designed, are absolutely crucial.”
Source: World Economic Forum / GAC14
The map shows that Asia is expected to be the region most affected by rising pollution, which brings us to the South Asian behemoth India.
In the context of Zou Ji’s remarks regarding the pitfalls of implementing high-carbon solutions, the case of India gains new significance; above all, for its huge infrastructure deficit (e.g. logistics or transmission lines) and its lack of adequate as well as reliable power generation capacity, which helps to explain prevalent energy poverty in the country (also read Breaking Energy’s ‘The West Will Have to Recognize we Have the Needs of the Poor’), and the abundance of domestic coal reserves (the world’s fifth-largest) which generate “three-fifths of India’s power supply”.
It is paramount for the new Indian leadership under Prime Minister Narendra Modi to learn the ‘right’ lessons from China’s example and pursue a distinctly different path in ‘electrifying’ vast swaths of its territory. A solely coal-based economy will incur huge economic and societal costs down the road. Actually, India still has the chance to turn a negative – it is often viewed lagging behind China on multiple indicators – into something positive by adequately incorporating renewables et alia into a future sustainable and affordable energy mix, which – to make this very clear – will have to include a significant share of coal given its domestic abundance and the country’s developmental stage. In this respect, Prime Minister Modi’s decision to open up commercial coal mining to private (international) companies is not surprising. The authors of a Reuters article even regard Modi’s decision as absolutely indispensable for “bringing order to the country’s chaotic power industry and ending the chronic blackouts that impede its economic rise.”
Meanwhile, a McKinsey & Co. study titled “India’s economic geography in 2025: States, clusters and cities” (October 2014) provides this graphic snapshot – headlined ‘The Rapid Pace of Urbanization’- of India’s development out to the year 2025:
India’s Rapid Pace of Urbanization (2012-2025)
Source: McKinsey & Co. “Understanding India’s Economic Geography”
The above graphic underscores that “India’s districts are at different stages of development” – with urban districts richer and growing much faster. “[M]ore than half of India’s GDP growth between now and 2025 will come from just eight states (Gujarat, Haryana, Himachal Pradesh, Kerala, Maharashtra, Tamil Nadu, Andhra Pradesh, and Uttarakhand), home to just 31% of the country’s population,” the study notes. The ‘difference maker’ here is also in no small part access to electricity.
Another interesting graphic illustrates how dramatically urban air pollution is projected to change – with India, rather than China, in clear pole position to potentially spoil global efforts of meaningful climate protection.
Source: World Economic Forum / GAC14
Obviously, demographics are a critical factor in the urbanization wave with the top three countries – India, China, and Indonesia – notably being some of the most populous in the world.
