India's G20 Presidency: Balancing Energy Security and Climate Goals | ft. Arunabha Ghosh
Guest: Arunabha Ghosh, Climate Expert & CEO of CEEW
Host: Sandeep Pai
Producer: Tejas Dayananda Sagar
[Podcast intro]
Welcome to Season 3 of The India Energy Hour podcast! The India Energy Hour podcast explores the most pressing hurdles and promising opportunities of India's energy transition through an in-depth discussion on policies, financial markets, social movements and science. The podcast is hosted by energy transition researcher and author Dr. Sandeep Pai and senior energy and climate journalist Shreya Jai. The show is produced by multimedia journalist Tejas Dayananda Sagar and is presented by 101Reporters, a pan-India network of grassroots reporters that produces original stories from Rural India.
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[Guest intro]
India's G20 presidency started amidst major geopolitical events, including the Russian invasion of Ukraine. These events reshaped energy markets and climate policies globally. As energy security considerations took center stage, countries started re-evaluating climate and energy policies. Most countries started looking inward, pushing for policies that secure energy security for them instead of building a global consensus on climate action.
To understand how India is navigating the G20 presidency amidst geopolitical realignments and what the key challenges and opportunities are for building a global consensus on energy and climate policy, we interviewed Dr. Arunabha Ghosh, founder and CEO of the Council on Energy, Environment, and Water, one of the leading think tanks in India. Dr. Ghosh is an internationally recognized climate and energy policy expert, author, columnist, and institution builder.
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[Podcast interview]
Sandeep Pai: Welcome to The India Energy Hour podcast. We have been wanting to have you for a long time to understand both your personal journey but also the story of India's climate and energy policy and how you view India's current and future energy and climate pathways. So welcome.
Arunabha Ghosh: Thank you Sandeep. Thank you so much for having me. I have listened to some of the episodes of The India Energy Hour podcast. So now I am very honored to be in one of them.
Sandeep Pai: Wonderful. So you know we have this tradition that we spend some time in the beginning about the person rather than the topic which kind of comes from the person's journey.
So tell us about your story, your journey, where were you born, what did you study, how did you kind of get into this field, was it your childhood dream that I will someday study climate and work on climate, or like how did you stumble upon it and then if you can also talk about the CEEW's journey and your own journey within CEEW that would be great.
Arunabha Ghosh: Sure. Thank you. I am now a middle-aged man so whenever someone asks me about my journey it becomes about you know reinforcing that I am a middle-aged man. But I was born in Kolkata since you asked but I was raised in Delhi. We are a third-generation Bengali family from Delhi. And I happened to have gone to the same school throughout called Mounts and Marys. I just came from there this morning. I was the chief guest for a recitation competition for kids. But my school is finishing 60 years this year. So that's where I spent my formative years. And then I went to St. Stephen's to study economics. And while I was doing that I was also quite interested in international affairs as well as regional kind of politics. So from Stevens I moved on to Oxford to read philosophy, politics and economics. And thereafter did an MPhil in international relations but focused more on public health, access to medicine. Many of the issues of global governance that we still talk about now more than 20 years hence or about 20 years since I have been I was working on that stuff then. Because it mattered to me what how international relations was organized to put people at the center. Not just what the high politics was about war and conflict and high diplomacy but how did that translate into impacting lives. I then moved on as a result in a way to the United Nations headquarters in New York where I became a co-author and a core author of the human development reports of the United Nations. Their flagship publication that is released every year and in a way that was giving me that opportunity to translate my academic training in economics and politics and international relations. But also my thematic training whether it's farmers and public health and development issues and translated it down into what that meant for broader development frameworks that we were pursuing. This was the era of what was called the Millennium Development Goals. Well before the Sustainable Development Goals came about. So during that time I did work on a range of different things from terrorism and extremism and to the impact of conflict and armed conflict and development to the issue of the human rights. Or making global trade work for people to looking at issues of transboundary water disputes. But in all of this I was able to work on a range of different things. I had no prior training in the issues that I currently work on. In fact after my time at the UN I went back to Oxford to read my PhD. Which was on the issue of transboundary water disputes. And I simultaneously worked at the WTO in Geneva for a little while and also worked on developing a governance program on trade on global trade out of Oxford and Geneva. And then I became after my PhD I became an academic for a couple of years. And I was able to work on a range of different things. And then I became after my PhD I became an academic for a couple of years with a position both at Oxford and at Princeton. And this was an interesting role because it was for PhDs but those who did not want an academic track. So those who were sort of policy practitioners. So I was privileged to have in my cohort other people from a former Ethiopian cabinet minister to someone from the Brazilian Senate to an advisor to the Bolivian president and so forth. And that gave me, so my work at the UN my PhD my work at the WTO my academic role. All of this gave me a very closed up view of what it meant to translate research into something that would have an impact on the ground. Even though that distance is vast. And it was in thinking about those naughty problems that I encountered climate change. And if you know international trade international aid international monetary issues were all challenging to me the climate crisis at that time it was not called the climate crisis. It was just changed. But it became evident to me that this was going to be a far more complex and not a problem to solve. And that's what got me interested to understand where where the negotiations stood but also where technology was going, how the investment was flowing and how the politics was shaping up.
So I worked on all of these issues especially when it came to the climate crisis. And how the politics was shaping up. So I was I worked on all of these issues especially with an energy lens during my academic years. And the epiphany so to speak occurred when I was when I was at the first COP conference of the parties that I attended and this was the 2009 COP in Copenhagen. And I was a complete newbie to that world standing in -8 degrees Celsius in a long queue of chaos. And I choose my words carefully because it was a long queue not just of people standing but of countries waiting for solutions and resources. But the actual unfolding of the negotiations was very chaotic. And it occurred to me then literally standing in that queue that this was not the way that the problem could be solved. And something had to change. It had to change in how we collectively approached the challenge but also how we approached it as a country. So a month later this was all happening in December 2009. And in January 2010 I was hanging around in India as a visiting fellow at another think tank taking I mean during the winter break at Princeton. And I spoke to some people including those who are now on my board and they asked me to write a concept note. And I went back and turned out the concept note for CEEW. And the mission then is the same mission now to use data integrated analysis and strategic outreach to explain and change the use reuse and misuse of resources. So we are. We are now still in a way the same institution as we were then.
So I packed up my bags from Princeton and came back on the 10th of August of 2010 and started up CEEW in one empty room on the 11th of August. And we in some ways have remained the same because our median age then was under 30 and our median age now is under 30 of the staff. We're obviously just short of 300 people. But the point was that a new institution has to be completely independent. But it also has to reflect the demography of India in order to be at the top of the list. In order to be at the cutting edge of research and the cutting edge of policy solutions to be delivering solutions that matter to the vast majority of the country's population.
We also wanted to have an integrated approach towards our work and we wanted to make sure that we had an international outlook. Because while we were establishing CEEW in India, we wanted to be right from the beginning a think tank for the world, maybe from the global south, but for the world. And, you know, to be able to shape narratives based on our research that that mattered for everybody. In Princeton and some of my lectures I used to joke with many of the American students that the south is not a case study. So you can't just assume that all the framings and the narratives and the theories will be developed in the north. And then, you know, you turn to an Indian and say, give me the Indian perspective, you turn to an Ethiopian and say, give me the Ethiopian perspective. The South can very well also position itself to frame global narratives. And so that international outlook was very germane and central to why CEEW was set up and how we think.
13 years on, we just celebrated our 13th anniversary a few days ago. We are still learning, still developing new technologies. We are exploring new issues. But it's been an interesting journey and it's been a journey of the transformation India has gone through. From less than 20 megawatts of solar when we were set up to now having nearly 70,000 megawatts of solar. Over 40,000 megawatts of, or 42,000 megawatts of wind, over 180,000 megawatts of non-fossil electricity capacity. India's journey has been CEEW's journey in some ways and we've been very excited to be a part of that journey
Sandeep Pai: Thank you. This is great. This is a good start in terms of like us understanding your background.
Let's get into the topic, which is kind of like broadly focusing on energy and climate diplomacy in India's year of G20.
So one of the big things I think that has impacted or thrown the entire diplomacy or re-diplomacy of energy and climate is the Russia-Ukraine war. And so let's just start from there and try to understand like how has that war impacted energy and climate geopolitics and policies in different countries and contexts.
And if you can shed light on some key trends that has emerged after that conflict.
Arunabha Ghosh: I think the most important thing that the Russia-Ukraine war has done is that it has reinforced this balancing act that countries have to perform between responding to the urgent versus the important. We saw that playing out just prior to the war with the pandemic where a lot of the long-term or sustainable structural things that had to be done. What I mean by sustainable is not just the environment to be sustainable, but socially, politically, economically. But countries struggle to maintain that focus on structural changes when you have to respond to a shock to the system. So the Russia-Ukraine conflict is another shock to the system. And that system in this case is not just what countries can do on their own, but their dependency and interdependency in global energy markets.
Related to that was the shock to the macroeconomic conditions. Because as you know, Sandeep, that energy expenditure for developing countries is often and for poor households is often a higher share of one's income or GDP than it would be for advanced economies or richer households. So when there is a shock to the system, it has not just an energy consequence, it has an economic consequence or a macroeconomic consequence, which then pans out in a few different ways.
Number one, it increases your fiscal deficit, and reduces the room again for working on other important matters in terms of one's economic development. And it also has an implication for global supply chains, the costs of transportation of goods and goods, the costs of adding value, especially for developing countries where a lot of the value if it is coming in from extractive industries, then that even minimal value that you add on the industrial side then gets impacted when energy costs go up. And then of course it then impacts inflation and currency in depreciation in terms of where the economy stands compared to other economies. So often we think about the Russia-Ukraine conflict only in the context of, all right, is there an alternative source of oil or gas that you can import depending on whether it's America or whether it's Europe or it's countries in Asia.
But I think the issue goes well beyond that. And this is why the response from countries in the developing world is that, look, we still have to develop and we still need those options and we need to find the energy resources from the cheapest sources possible. But equally, where, so if that is one trend, the equally, even in advanced economies, there has been, the other trend has been that, okay, how do you quickly decouple from dependency, especially for gas from Russia. But then what this does is, while one thinks that that's a strategic move, it actually begins to distort markets at a global level. So now if European countries are also queuing up to Qatar, then the poorer economies have even bigger problem in a sort of seller's market.
So now you have a macroeconomic shock for poor economies and an energy shock for poor and rich economies. And then there is the climate shock. That's the third trend, that as this crisis has continued to unfold and sort of the stalemate that we are in is also overlapping with intensification of the climate crisis, including the impact of the global warming. Including the near term impacts of extreme disasters. Last year alone, $270 billion of disasters, only $120-125 billion insured, which means that there is this huge protection gap as the insurance industry claims, especially of infrastructure and productive assets in the developing world. So how do you now respond to that important crisis, even as whether you're a rich country or a poor country, getting pulled away by an urgent crisis? And that results then in a very difficult choice matrix that is a question about time scales, question about technology, question about financing and investment. And guess what? One consequence that emerges as a result of this is heavy reliance on industrial policy.
So we then see that for the ostensible purposes of climate action, etc., but for the less articulated option of decoupling from countries that one does not like, there is this huge search of industrial policy on the energy and climate side, whether it is in the United States or in Europe. And with developing countries, then floundering in a situation where your trade markets are distorted, your energy markets are distorted, your financial markets are distorted, exactly at a time when you want efficient trade energy and financial markets to drive your economic development.
Sandeep Pai: That's a fantastic answer to my, it'll help me create a nice segue for my next question, which is, you know, from what you said and from what I have followed about this field, like countries are more looking domestically now. They're, you know, they're like kind of reinforcing the importance of domestic energy security, domestic, like getting things from domestic sources, both from the impact of Russia and Ukraine war, you can walk where, you know, Europeans started hoarding gas. And so countries like Pakistan and Bangladesh were struggling to get that gas, but also then the passage of IRA in the US and, you know, all the green policies.
So now countries are increasingly looking at Atmanirbhar in India's case, but in other contexts, they may be calling something else. Given that context and given that climate is such a universal problem, no one country alone can solve.
Do you think India's G20 presidency is happening at a time where these two trends are going to make this presidency difficult? And if that is the case, then how do you think India is navigating this G20 diplomacy, given the two trends of inward-looking and, you know, like the policy around like relying on domestic sources?
Arunabha Ghosh: I think India's G20 presidency had recognized these tensions right at the outset. And that's why even when the presidency began in December of 2022, India had articulated a vision that went beyond individual working group silos to say, look, we've got to solve for some of these structured problems simultaneously. And I had written about then that our priority should be to make the finance track, which was how the G20 originally began, and the share part track, which sort of began from after the 2008 financial crisis, have them go here a lot more. And then see what are the problems that can be solved.
So among the, I mean, I'm not going to be perhaps on a podcast be able to be fully comprehensive on all the priorities, but among the priorities, therefore, were issues like the impact of our lifestyles on sustainable development, but not just in a, you know, field goat switch off the lights kind of way. But what does it really mean to be resource efficient? And how does that then begin to change some of the structural problems you're dealing with? Similarly, how do we have energy security? Because energy security, everyone wants, but it means different things. So this bridge between security for oil, gas, coal, but also what India articulated security for fuels of the future, whether it is hydrogen or solar or wind or critical minerals, and how do you create that governance architecture, that set of rules that can give us that security? Then the focus on what we call trillions for the billions of people in the global south.
So how do we go beyond conversations around $100 billion for climate change or, you know, X billion dollars for SDGs to really thinking about what is the financial architecture that can drive investment into the global south for the broader range of sustainable development? And then this focus around sustainable development, we are holding the G20 presidency right at the middle of this SDG agenda between 2015 and 2030. So how do you accelerate progress on sustainable development, not just on climate action or energy?
If you start thinking about all of these as that grander narrative, that is what India wants in the form of what it has said, you know, green development pact. And a pact itself is the word inspires this thing of it's a covenant. It's not about treaty design. It's not about a negotiation. It's not an agreement. It's a pact. You've got to at some stage understand that we're all in this together some way in one way or more. And we've got to, while we're trying to instinctively go down the route that you described Sandeep, of instinctively raising walls, instinctively trying to decouple, instinctively trying to make our economies vertically integrated firms. We must realize that at the end of the day, we are quite interdependent.
So you can then be chaotically interdependent or you can be interdependent in a rules bound manner. And that really is that approach. It is the philosophical approach that India is pursuing through its presidency.
Sandeep Pai: Great. Now that we are on the topic of India's G20, I want to understand and I know that you're someone who has followed this very closely and has been part of many discussions. In your view, how has the presidency gone so far? You know, what has worked, what hasn't worked and what do you anticipate from now until the end of the presidency are going to be some of the key issues that one should watch out for?
Arunabha Ghosh: Well, one of the things that has not worked, but which was also anticipated, right, is that the geopolitical crisis that we are in continues. And there are two types of geopolitical crises. One is the immediacy of a conflict. The other is the chronic nature of a, you know, China-U.S. split, you know, which gets papered over from time to time. But it is there. It is a background context.
Now, if you host a party where some people don't get along, that doesn't mean you don't host the party. You just have to serve different dishes or at different tables so that they can all enjoy and feel that they've taken something away. So I would say that the challenge for India's G20 presidency is not actually what the media has reported. Or there's no joint communique from X working group or Y working group. That to me is not the biggest problem because even in the absence of a communique, because a certain paragraph on the conflict or how do you define the conflict has not been agreed, does not mean that there is not consensus on a range of other things. And when I break that down, quite objectively, there are quite a few things that have already come out, which were very much then there is a one-to-one mapping of what India articulated in December and what has been, say, delivered in June or July of this year.
If you look at the development working group, the development ministers meeting that was held in June, we have this high-level principles and lifestyles for sustainable development. Now, again, one could criticize that, well, that's just high-level principles, what does it mean? But that is the nature of G20. G20 is not the United Nations. It doesn't have its own permanent secretariat. The idea is to get enough consensus on issues that you can then drive through other platforms. If these high-level principles trigger a genuine circular economy of resources and materials and minerals at scale across countries, that's hundreds of billions of dollars of new economic opportunity that begins to emerge.
Similarly, the focus on SDGs just three months before the UN Secretary General and United Nations hosts an SDG summit is encouraging. But then more concretely, if you then move to the energy transitions working group, you see many of the issues that India had articulated before coming to the fore. There is a clear reference to supply chains for energy security, which then highlights the need to maintain open markets and rather than introduce restrictions and export bans, et cetera, on clean energy products. You have that language.
We have for the first time an extensive treatment of critical minerals that will go into our low carbon technologies, including a voluntary high-level principles on critical minerals. And I think very importantly, the reference to fuels for the future with a specific focus on hydrogen and the call for and as well as the agreement on the high-level principles of hydrogen, which again can serve as the foundation to create a rules-based architecture for global hydrogen trade. I think these are very, very important outcomes, which of course sit alongside some outcomes that haven't come about. For instance, threefold increase in renewables as some countries had desired and other countries explicitly opposed.
If you look at the environment climate sustainability working group, again, yes, apart from the references to keeping temperatures below two degrees, it's important to understand what else came out of it. The focus on land degradation and an implementation roadmap on reducing land degradation, a focus on an industry-led resource efficiency and circular economy coalition, a focus on climate resilient water resources management, and of course the principles for a sustainable and climate resilient blue economy. It gives you a sense that the presidency and of course other G20 members are now beginning to think of these issues, not just as mega targets that come out at a COP negotiation. But what does that mean in terms of the foundations to make it happen? I mean, climate change is not just atmospheric concentrations of greenhouse gases or surface temperatures. Climate change is about water. It is about land degradation. It is about the oceans that are absorbing 90% of the heat.
So if you are getting outcomes that are negotiated and agreed to by all the G20 members that are giving you these foundational blocks, I'm not sure that then the criticism that well, you know, climate ambition overall did not come through is a very valid criticism. For that we have the UNFCCC and we have the Conference of the Parties. But we've got to focus on those foundational blocks.
Nevertheless, I think, and I wrote about this recently, the big issue now of course is going to be on finance. And between now and the Leaders Summit and between the Leaders Summit and the end of the presidency, end of November, we must be keeping our eyes peeled for and putting our collective efforts towards getting a financial package, which is not about just money. Again, G20 is not a bank, but it's about outlining a pathway to genuine financial reform, whether that is of the multilateral development banks as the G20 committee that Larry Summers and N.K. Singh chair, or in terms of the role of the private sector, of institutional investors, of de-risking finance. I think we do, that remains a big, big, big holy grail in a way that we are still chasing.
Sandeep Pai: Great. Let me ask you a very big picture question, both in relation to G20 and the United Nations platforms. And going forward, I mean, as you nicely articulated how climate crisis is really here and we're losing money, floods, new and new events we are seeing every day, every week.
So given the urgency of climate crisis, how does one use platforms like G20 and UN? Because I think, as you said, both does very different things. So is this a good model that we use these G20s to create that foundation, which creates the building blocks, but then you go to the United Nations to actually raise the ambition? Is that a good model? Is that a model that you would sort of articulate for others and especially people in the think tank world or in the civil society to push different agendas and different forums?
Arunabha Ghosh: Since you've asked me a larger, in principle question, let me give you a little bit more of an abstract answer.
In 2011, when we were just about a year old as an institution, we published a report called Understanding Complexity Anticipating Change. And it was about India and global governments, the first report of its kind. And the subtext was when India hosts the G20 presidency, how would it shape the framing of the world? I mean, in a way, we published that report on the 1st of December 2011 and 2022, 1st of December is when India took on the G20 presidency.
Why I draw reference to that report is that we outlined in that four shifts that we felt were occurring in global governments.
The first was that we were moving from a world where much of the developing countries were rule takers to issue specific areas where developing countries were also seeking to be rule shapers or makers.
The second shift was that from being not just looking at shaping or making some rules, there was also a case emerging for shaping new regimes altogether. New organizations that would emerge.
The third shift was on specific issues, sometimes individual or singular regimes or singular institutions were not going to suffice. And we were seeing the patterns of regime complexes emerging in various areas, whether it was in trade or energy or climate or global monetary issues.
And the fourth was that it was no longer a world of intergovernmental international relations. It was an international relations that was emerging where many stakeholders, governmental and non-governmental, including from industry and civil society who were at the table, various types of metaphorical tables.
If you reflect another, you know, more than a decade since then, you see that these trends of actually this abstract theorizing has actually played out. We've seen countries from the Global South shaping a lot of rules. We've seen them creating new institutions, including India, which created the International Solar Alliance, which created the Coalition for Disaster Resilience, which created the Coalition for Disaster Resilience infrastructure, the New Development Bank, etc., etc., all these kinds of institutions that have emerged. We've seen this complexity in regimes that have emerged. And as a result, countries and stakeholders do what is called forum shopping. They go if they don't get all the answers in one place, you go to another. You choose the institutions that you want to work with. And you see large philanthropies, large companies, large NGOs and governments and also very small governments, governments from very small countries partnering with large non-governmental entities elsewhere to shape a global agenda.
All this means that the international relations of the 21st century requires more responsive and nimble institutions and institutions are systems of rules, procedures, but also customary behavior. Institutions are not just organizations. And we are seeing these institutions and experiment in institutions underway. So therefore, if I now answer your question a little bit more directly, is this the right model that certain founding blocks are set up in the G20? And then you move to an intergovernmental platform like the UN to operationalize? Maybe yes, maybe no. The G20 was forged in crisis. It was forged again in crisis. And India's presidency has come after the third mega crisis, the pandemic combined with an ongoing conflict back in Europe.
So in a way, my French is awful, but that plus ça change plus ça l'amène chose applies. The more things change, the more they remain the same.
So the world that we left behind in 1945 is a world we have left behind. But elements of that world exist. And yet we have to create mechanisms that are more responsive and nimble for the world we are living in now.
Sandeep Pai: Lots of great quotes there. Lots of great, really interesting perspective. Let's move on to the upcoming COP. Now, with all the different things that you described in terms of like, we started talking about Russia - Ukraine, war, then we talked about India's G20 presidency and what worked and what didn't work. Given all this background, how do you think this COP is set up in terms of absorbing the issues of the time and then making sure that we are making progress and not that we go there. And given also where it's being hosted, we don't go back and there is a clear ratchet in terms of our ambition. So what do you think are some of the key things that one should watch out for at COP and what are some of the different things in which people can contribute, institutions can contribute?
Arunabha Ghosh: Well, first, let's start with the bad news. I think the COP will have, you know, there's that movie called Knives Out. I think there will be knives out, there will be daggers out. Because it is the global stock take and it is happening more than 30 years after the UNFCCC was first negotiated. And we have only continued to increase concentrations of greenhouse gases. The only thing that's happened faster than climate action is that the climate has changed faster than it had been predicted to. So I think the news, the scientific news is going to be pretty bad. The lived experience news is already very bad. The hottest month recorded ever in human recorded history from the forest fires in California or Canada or Hawaii to, you know, a third of Indian states being affected by floods in this year. And every year you see these news, but it's going to present a very grim picture of the global climate. And therefore knives will be out because, you know, these commitments don't seem to be met.
The related part about this is, you know, what kind of commitments are not being met? And this is where we have to ask ourselves, because you use that phrase, is it sufficient to keep ratcheting up ambition? So suppose I were, you know, if I wanted to win a gold medal, India did quite well at this recent Asian Athletics Championship. But then a few days later, I saw a little reel about Usain Bolt losing a race at the early stage of his career. Now, if he just said, oh, I'm ratcheting up my ambition and I'm going to win a gold medal. That's not exactly how you win gold medals. You win gold medals by working really hard. And you also, guess what, win gold medals by sacrificing a lot.
You don't eat some of the things that you really like. You don't sleep all the time that you want to. You don't have all the holidays that you aim for because you have a singular focus on a gold medal. So I have a fundamental problem in a climate regime where the primary meeting focuses on ratcheting up ambition rather than on delivery.
And I said this last year in Sharm EL Sheikh at COP 27 and I've written about it subsequently. We have converted cops into mutual admiration societies. We like to come there, want to grab the headlines. Well, and I say we, meaning everybody. It could be government representatives. It could be civil society. It could be definitely it is industry. The number of industry that comes to COP keeps increasing. Number of them making big announcements keeps increasing. And then, you know, without any accountability, they are happy to step back from those commitments. And therefore the COP has to change into from a mutual admiration society into mutual accountability society. And that is fundamentally what is missing in the entire architecture of the UNFCCC.
So then what can move us there? You know, so that's the bad news that the daggers will be out and we have to get out of the country. And we have we have by design structure to applaud each other rather than hold each other to account. What can change? What can you sheath your daggers into? And that sheath is finance. That sheath is finance as where it's not just about the 100 billion. I have said it repeatedly. It's a floor, not a ceiling. But it's also the different colors of money that we need.
Around the time when the UNFCCC was negotiated, just a couple of years before that, 1990, a famous economist, Robert Lucas, presented what is called Lucas paradox that we expect money to go from capital rich regions to capital poor regions. But actually it doesn't happen. We should even in the climate context, we should say capital should flow from rainy and shady places to dry and sunny places between the tropics. It doesn't happen. Capital keeps circulating for energy projects where the sun doesn't shine that much.
So the different colors of money that we need will be, of course, fiscal allocation, institutional investment, private investment and corporate investment in their own supply chains and even consumer investment in the choices one makes of the goods and services we purchase.
We are, I'm afraid, not developing an architecture of finance that addresses these problems in a material way. And that's why I think the Paris financing summit that President Macron held, the G20 presidency that India is hosting, the climate ambition summit that the Secretary General will host at the UN, the World Bank's annual meetings will all be staging posts towards what COP28 delivers. And what will make us convert ourselves from mutual admirers to holding each other mutually accountable is the focus on interdependency.
So again, to draw reference to something you said, Sandeep, And to, about industrial policy, the US IRA and the deal in Europe and use the same metaphor of an Olympic gold.
I have a problem if you, well, let me put it this way. I don't have a problem if you have the resources to make yourself run faster. The world is not always an equal place and not always a fair place. I mean, athletes from poor countries can also win medals. I have a problem if you inject performance-enhancing drugs to win a race. And the way industrial policy is structured now, they are not just rich countries using their resources. They're injecting performance-enhancing drugs and artificially then presenting their companies as the global leaders in the energy transition.
In the Olympics, your gold medal will be taken away. You'll be called a cheat. Documentaries will be made about you, of how you cheated the system. And the climate world is celebrating this kind of distorted market design. So these two fundamental things have to change for COP 28 and beyond. A structural reform in global finance and a structural reform to maintain open markets and interdependent markets for the rich and the poor, the North and the South, to collectively have a stake in the new economy of the future.
If you keep money away from the poor and you also distort a market in a way that poor cannot participate and have barriers to entry, then why would you assume that they will not only share the burden of a problem that you've created, but will actually be politically invested in that transition?
So these two are for me, I will judge COP 28 not by individual declarations and some more back-slapping, but really did it deliver something fundamentally different on finance and did it stop distorting markets? And right now, I'm afraid I'm not confident on either front.
Sandeep Pai: Okay, great. I wanted to end on like a positive note, but it's a very clear articulation of what you think will work rather than kind of going and declaring one more ambition and then going back next year. But thank you so much for your time.
This was really great. I really enjoyed the conversation. We touched upon topics which were very local to global. Thank you so much for your time.
Arunabha Ghosh: Thank you, Sandeep. And if I could take 30 seconds, you know, the positive note, the positive note is not climate ambition. The positive note is climate action.
And, you know, we don't have to be card-carrying nationalists to recognize the transition that India itself has gone through. So, you know, let's double down, triple down on our own experience. And to do that in a constrained, optimized way is a lesson for ourselves and for the rest of the world. So I'm still quite positive about the change that we can bring about.
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