—Updates with investment surge, pulled Adani share sale
India is seen resisting striking a Just Energy Transition Partnership deal with OECD nations, as it holds the rotating leadership of the G20, according to three people familiar with the situation.
India is seen trying to stay neutral, take a role as global climate dealmaker, as the world struggles to overcome trade disputes and surging protectionism and nationalism. Humankind has struggled to tame what’s becoming runaway climate change — for more than 30 years.
The G7 countries signed an $8.5 billion JETP deal with South Africa at COP26 in 2021, followed by a $20 billion deal with Indonesia and a $15.5 billion deal with Vietnam in 2022.
They are meant to sign one with India, too.
CarrZee: India may be hesitating because it does not trust global markets, especially because of how they are currently treating one of its national champions, the Adani group. (see below) While the JETP deals seem impressive on paper (see below), the structure may be a little colonialistic. The Just Energy Transition Partnership (JETP) with Indonesia was agreed during the climate conference in November at the G20 Summit in Bali. Public and private funding totalling $20 billion will enable Indonesia to speed up its energy transition by ten years. India may realise that to save the climate the world needs a better overarching market structure. A few JETPs won’t cut it.
“The JETP is unlikely to progress,” said a person with knowledge of the situation.
Another said: “India has/is rejecting it [the JTEP] but still unable to confirm if that’s official.”
CarrZee: Tackling global climate change would be much easier if at least the G20 nations were on board. India should try for that big prize.
While India may struggle that I believe it can.
The second person disagrees: India is “in a bind because it’s hosting G20, and not signing up to JETP would look poorly; some weasel compromise is what I am anticipating.”
The first person: “India’s stance has been that the forum for climate change action is the UNFCCC (not the G20; not the WTO. I have my doubts whether it would entertain or join a G20 climate club – others like South Africa, China may also have an issue. Seeing as how the G7 and India are divided on the JETP issue as well, specifically coal phase out, I doubt collaboration with G7 is open at this stage.
“In any case, in India the law for creating a carbon market was led by the power ministry and not the environment ministry, which decides India’s stance on climate change issues, so it’s also an issue of distributed competence. Policy coordination might be a challenge there.”
A third person said a G20 stakeholder group is considering the JETP as an agenda item.
CarrZee: What could happen, initially at least, might be some sort of debt-for-nature deal with the assistance of the US and other developed nations — between India, Sri Lanka, Bangladesh and Pakistan.
This debt-for-nature deal, or something like it, is also being considered by the G20, according to the third person.
An Indian government official has not yet answered my questions on the state of play. I will keep you updated.
(UPDATES with G20 stakeholder group)