VZCZCXRO3880
PP RUEHHM RUEHLN RUEHMA RUEHPB RUEHPOD
DE RUEHBI #0189/01 1231052
ZNR UUUUU ZZH
P R 021052Z MAY 08
FM AMCONSUL MUMBAI
TO RUEHC/SECSTATE WASHDC PRIORITY 6223
RUEHNE/AMEMBASSY NEW DELHI 7441
INFO RUEHBI/AMCONSUL MUMBAI 1323
RHMFIUU/DEPT OF ENERGY WASHINGTON DC
RUCPDOC/USDOC WASHINGTON DC
RHMFIUU/NOAA NMFS SILVER SPRING MD
RUEHZN/ENVIRONMENT SCIENCE AND TECHNOLOGY COLLECTIVE
RUEHCI/AMCONSUL KOLKATA 1537
RUEHCG/AMCONSUL CHENNAI 1729

UNCLAS SECTION 01 OF 02 MUMBAI 000189 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR G, OES/FO, OES/PCI, OES/EGC, AND SCA/INS 
DEPT OF ENERGY FOR TCUTLER, CGILLESPIE, MGINZBERG 
USDOC FOR A/S BOHIGIAN 
NSC FOR DAN PRICE AND ROBERT DIXON 
CEQ FOR JAMES CONNAUGHTON 
 
E.O. 12958: N/A 
TAGS: SENV ENRG ECON TSPL TRGY KSCA KGHG IN
SUBJECT: SARAN ASKS INDIAN INDUSTRY TO COMMIT TO A LOW CARBON ECONOMY 
WHILE GOI NEGOTIATES ON THEIR BEHALF MULTILATERALLY 
 
REF: A. NEW DELHI 844 
     ¶B. MUMBAI 113 
 
MUMBAI 00000189  001.2 OF 002 
 
 
¶1.  Summary:  In a tough speech to Indian industry in Mumbai, 
Special Envoy for Climate Change Shyam Saran stated that the 
Indian government would resist calls for uniform standards for 
carbon emission reductions.  Any global deal would have to take 
into account a country's relative development, as well as its 
historical and current carbon output.  Saran also explained that 
despite this position, India would focus on reducing its carbon 
footprint domestically.  Indian industry was largely unmoved 
however, noting that industry has already begun to pursue clean 
and green energy solutions to avoid the increasingly high cost 
of traditional fossil-fuel based energy sources.  End Summary. 
¶2.  At a climate change conference on April 21 organized by the 
Confederation of Indian Industry, Shyam Saran, the Special Envoy 
from the Prime Minister's office, outlined the Indian 
government's position on climate change.  Saran stated that 
while India is pursuing the development of a low-carbon economy 
domestically, multilateral dynamics are different.  Multilateral 
negotiations on climate change are grounded on the principle of 
equity, Saran explained, but he assured listeners that the 
government realizes the "real" and "serious" threat of climate 
change and is taking domestic measures to address this challenge 
expeditiously. 
¶3.  Saran noted that India's contribution to total carbon 
emissions is "modest" and that India and other developing 
countries bQieve in the "polluter pays" philosophy.  Saran also 
emphasized that it is not justifiable to extrapolate current 
emission trends in India to 30-40 years in the future.  He 
highlighted the difference between "survival" emissions from 
developing countries and "lifestyle" emissions from developed 
countries.  For example, 600 million Indians do not have access 
to energy today and Saran argued that their need for energy 
cannot be compared to a more developed country's need for energy 
that can be regulated by a tax on auto emissions or a carbon 
tax.  For these reasons, he continued, developed countries 
should compensate developing countries for lowering carbon 
emissions both today and in the post 2012 period, by the 
transfer of financial resources and technical know-how. 
¶4.  Saran also laid out India's position in multilQeral climate 
change negotiations.  While the first commitment period expires 
in 2012, India believes that the only item to be renegotiated is 
the future emission reduction targets for developed countries. 
In addition, India's responsibility to support emission 
reductions is not to be linked to any conditionality.  Finally, 
developed countries cannot be allowed to use the sectoral 
approach to climate change to argue for globally binding 
industry-wide norms to address international competiveness, he 
maintained (Note: This is in contrast to what he told CODEL 
Pelosi about one month ago.  Reftel A).  Saran explained that 
the sector-based approach to climate change prescribes the 
negotiation of internationally binding emission norms for 
specific sectors; he opined that the sectors will be 
particularly energy-intensive ones like the cement industry.  He 
believes that supporters of this approach can argue that 
international competiveness requires all countries -- including 
developing countries like India - to adhere to these binding 
emission norms.  Saran warned that "developed countries who 
adopt sectoral standards among themselves will use the 
competitiveness argument to levy protectionist tariffs against 
the products of developing countries."  Developed countries 
advocate a zero tariff regime for green goods, but this can 
distort trading patterns by using trade competitiveness 
arguments, he continued.  Instead he argued that green goods 
should have their IPR regime adjusted to allow for cheaper 
adoption by developing countries.  He also argued for the 
creation of a venture capital fund, whose purpose would be to 
enable developing countries to adopt green technologies. 
¶5.  After laying out India's "tough" stance on climate change 
multilateral negotiations, Saran explained that India will 
pursue a strategy of environmentally sustainable development 
domestically.  He pointed out that energy growth in India is 
significantly lower than economic growth.  India has achieved an 
8-9 percent GDP growth rate with a mere 4 percent increase in 
energy consumption, he noted.  This trend can continue and 
accelerate if the government and the private sector works 
together to develop energy conservation measures in high-energy 
intensive industries, he continued.  The reliance on expensive 
and exhaustible energy resources will constrain India's growth, 
and new technologies and renewable sources of energy have to be 
 
MUMBAI 00000189  002.2 OF 002 
 
 
employed to ensure predictability and affordability, he warned. 
So, India will have to increase its energy efficiency standards 
and accelerate the development of renewable energy sources like 
nuclear power, wind, solar, and biomass. 
¶6.  Saran said that the government will announce a national 
action plan for climate change in June.  Previewing aspects of 
this plan, he stated the GoI wanted to create carbon sinks by 
planting additional forests, increase water conservation and 
address solid waste management.  He noted that Indian industry 
is ahead of the curve in terms of energy efficiency and as a 
result the GoI was starting to believe that market forces would 
be the best mechanism for ensuring energy conservation. 
Addressing those critics who believed India has not done its 
part to address climate change, he stated that India was already 
spending close to 2.5% of its GDP on adapting to climate change. 
 He also pointed out that India's cement industry is now the 
world's most energy efficient and a major industrial group was 
about to make a USD5 billion investment in solar energy in India. 
¶7.  After the speech, Indian corporate representatives told 
Congenoff that, in contrast to Saran's message, they really were 
not concerned whether India agrees to emissions limits or not. 
This view reflects what Indian corporate leaders told Speaker of 
the House Nancy Pelosi and her delegation in Mumbai in March 
(reftel B).  Corporate India's biggest concern appears to be how 
to help small and medium enterprises go green; it is a 
widespread belief that large enterprises will be able or are in 
the process of making the leap to green business practices 
without much government help.  Businesses also commented that 
carbon credits, though helpful, were increasingly difficult to 
secure because of increasing scrutiny by the U.N. on proposed 
projects.  Businesses also pointed out that small companies 
cannot afford the project advisory and audit fees, which amount 
to USD 5,000-10,000, that are required to get the project 
certified by the U. N.  The increasingly high prices of and 
seeming scarcity of energy in India are enough to make them look 
at energy conservation, irrespective of the carbon credit 
incentive. 
¶8.  Comment: While the Indian government continues to "talk 
tough" multilaterally and to justify India's exclusion from 
legally binding emission reductions, Indian industry is 
unilaterally increasing its R&D efforts to develop alternative 
clean energy technologies.  In discussions with clean energy 
companies, Congenoffs heard that the carbon credit trading 
incentive system under Kyoto is not the main driver behind these 
energy conserving measures.  High energy costs of around 30-40 
percent of total manufacturing costs forces Indian industry to 
conserve and efficiently use energy and to explore alternative 
non-conventional energy sources in order to remain economically 
viable and globally competitive.  Perversely, while the media 
and political classes are talking about the heavy toll high 
energy prices are taking on the economy, they appear to have 
been the best possible driver towards energy conservation and 
building a green economy in India. 
KEISER