EcoPerspectives Blog

India’s Climate Diplomacy in 2024: Reflections on Climate Tech and Environmental Diplomacy

By Akshith Sainarayan, third-year student, School of Law, Christ (Deemed to be University and Calvert Nazareth, fourth-year student, School of Law, Christ (Deemed to be University)

May 9, 2024

 

Introduction

The World Meteorological Organization’s provisional State of the Global Climate Report recently confirmed that 2023 was the hottest year in history. The report noted that the effects of climate change and global warming are evident, courtesy of the increased number of climate disasters and extreme weather conditions. The impacts of climate change are worsening in frequency and intensity. Counterfactually, however, innovation and technology will play a pivotal role in the pursuit to overcome climate crises in the years to come. This niche branch of technology, often referred to as climate technology or climate-driven tech, aims to secure a symbiotic relationship between technological growth and environmental safe-keeping.

The United Nations Framework Convention on Climate Change defines climate technologies as “technologies that are used to address climate change . . . including technologies that help to reduce GHGs [greenhouse gasses], renewable energy technologies and adaptation technologies such as drought-resistant crops, early warning systems and sea walls.” The synergy between technology and environmental protection manifests through understanding the various opportunities and risks, building strong resilience against climate impacts and responding effectively when such impacts occur. Technology can not only tackle climate change, it also has the potential to create new jobs, promote economic growth, and lead to more innovation.

India is a global leader in climate technology, as the nation has been ambitious in achieving its net-zero targets for 2070 and its interim climate commitments for 2030. According to the Impact Investors Council Report, India boasts of housing over 120 funded climate-tech-driven start-ups, which have received funding from 272 investors from across the country. India’s push towards reducing its carbon footprint by exploring sustainable technology has three characteristics: allowing pathways for greater private investment in climate technology, collaboration through public-private partnerships, and technology transfers as a part of its global commitments.

Through the course of this discussion, we examine India’s internal business model and external trade policies concerning climate technology. This includes an analysis of the market for climate tech in India, as well as the latest trends in climate diplomacy from the 13th Ministerial Conference (“MC-13”) against this backdrop. Through this, we attempt to create a holistic understanding of how India fares in the climate tech and sustainability space, what opportunities lie in this market, and how India perceives sustainable trade in the World Trade Organization (WTO).

 

Where Does India Stand?

While India tackles its persistent air and water pollution problem, an opportunity presents itself with a growing demand for environmental technology. The Indian environmental tech market has a value of approximately $23 billion, with a projected growth rate of 7.5% between 2023 and 2028. India is also the 6th largest market globally for niche environmental tech solutions—particularly those relating to air pollution control and solid waste recycling. The market is also rife with technology for wastewater management.  India’s approach to the climate crisis is not necessarily unidimensional. These solutions are not entirely import-driven solutions and are contingent on a mix of “Make in India” and “Make for India.”

Consequently, climate tech ecosystems are crucial for India’s strategy towards energy transition and sustainability. With start-up funding and investments in green tech at an all-time high, India holds the 9th position globally for venture capital (VC) funding for climate technology. The market acts as a twofold opportunity in plowing in much-needed foreign investment and sustaining a climate-centric industry.

 

India’s Recent Climate Diplomacy

India has always been a vehement proponent of the common but differentiated responsibility policy in climate politics. Its climate policy comes as a natural consequence of furthering the cause as a proactive player in the “trans-nationalist” movement in climate advocacy; the policy engages beyond the confines of a COP-centric climate change mitigation regime, which has historically been a traditional approach opted for by multilateralist trade factions.

While India and its climate tech ecosystem booms into a profitable space for investment, its approach towards streamlining cross-border business has also been positive. In October 2023, India proposed a roadmap before the WTO’s Working Group on Trade and Transfer of Technology (“WGTTT“). The roadmap was envisioned to facilitate the development and transfer of environmentally sound technology (“ESTs“) through a multilateral process towards removing barricades on tech transfer. The roadmap includes the establishment of an environmentally sound technology database linked with a technology transfer platform, streamlining licensing practices, and enabling developing countries to use Trade-Related Aspects of Intellectual Property Rights (“TRIPS“) flexibilities.

The proposed mechanism within the TRIPS Agreement encourages open and adaptable technology licensing, specifically to research outcomes related to climate change and ESTs funded by public resources. This also includes a proposal towards establishing publicly funded technology inventories by developed nations—creating a databank of sorts to merge the asymmetry between developed and developing nations. The TRIPS mechanism will facilitate smoother movement of climate tech.  Additionally, it urges these countries to disclose information about technologies that are either directly or indirectly patented or funded by government bodies. India also suggested promoting innovative intellectual property rights-sharing arrangements between firms in developed and developing countries. These arrangements would facilitate the joint development of environmental goods and services. Furthermore, India recommended case-by-case exemptions from patentability for inventions critical to the diffusion of ESTs necessary for climate change adaptation and mitigation. It also proposed shortening patent protection terms to enhance access to specific patented ESTs in the public interest. Waiving patents on climate-friendly products and granting royalty-free voluntary licenses are additional measures to address climate crises.

India also played a pivotal role at the MC-13 of the WTO in Abu Dhabi earlier this year. India advocated for a sustainable means of living based on traditions and values of conservation, including LiFE (“Lifestyle for Environment”) as a key to combating climate change. India also expressed its concerns about using unilateral trade protectionist measures by many countries across the globe in the guise of environmental protection. In doing so, India particularly criticized the European Union’s CBAM (Carbon Border Adjustment Mechanism)—a carbon tariff policy on the usage/trade-in of carbon-intensive products.

India led the negotiations against the inclusion of this proposal, stating that it targets developing nations by studying their industrial policies and ultimately seeks onshore industries. The policy was ultimately dropped due to disagreements in arriving at a consensus on the language of the CBAM proposal such that developing countries do not take the hit, as against the original intention of possibly targeting Chinese-owned SOEs.

 

Inferences and Conclusion

India’s policy seems consistent with its original stance on common but differentiated responsibilities. On one hand, India seeks to open its borders up for sustainable tech transfers—tapping into a booming market that could bring in some much-needed foreign direct investment (“FDI“). On the other hand, it seeks to hold its ground as a developing nation, criticizing Western and European attempts to continue preferential trade policies against the global south. The events of WGTTT and MC-13 put India in a strategic position to further what is perhaps the need of the hour for the climate tech market—generating climate finance by integrating the private sector internationally. This also works as a strategy to involve the Global South in generating climate-centric solutions to strengthen its climate tech market. These events reflect a delicate balance between leveraging global partnerships for sustainable tech transfers and safeguarding the interests of developing nations in the face of evolving trade dynamics. On the domestic front too, India has attempted to ease its business regulations through the Jan Vishwas Act. This includes relaxing policies on environmental protection, compliance, disclosure standards, etc. How India seeks to integrate its domestic policies with its position in the WTO is a question not yet answered.