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RUEHBI/AMCONSUL MUMBAI 2589

UNCLAS SECTION 01 OF 05 MUMBAI 000320 
 
SENSITIVE 
SIPDIS 
 
STATE FOR OES/PCI, OES/EGC, AND SCA/INS 
STATE FOR SECC TODD STERN 
DEPT OF ENERGY FOR TCUTLER, CGILLESPIE, MGINZBERG 
 
E.O. 12958: N/A 
TAGS: SENV ENRG ECON TSPL TRGY ETRD IN
SUBJECT: SPECIAL ENVOY STERN HEARS THAT INDIAN INDUSTRY IS READY TO 
COOPERATE ON CLIMATE CHANGE 
 
MUMBAI 00000320  001.2 OF 005 
 
 
¶1.  (SBU)  Summary.  Special Envoy for Climate Change Todd Stern 
met with several leading private Indian businessmen to ascertain 
their views on mitigating climate change.  He found that India's 
private sector is actively engaged in clean technology 
investment, particularly for renewable energy.  In contrast to 
the conventional rhetoric of the Indian government, the 
corporate sector is looking for pragmatic cooperation with U.S. 
industry and government, particularly in regard to accessing the 
latest technology and training to use that technology.  Indian 
business leaders also believe that nuclear energy is a viable 
clean technology option to meet India's energy needs and are 
waiting for legislation from the Government of India (GoI) that 
would allow private section entry into this arena.  The Special 
Envoy (S/E) came away believing that the Indian private sector 
is eager to move forward on clean energy.  End Summary. 
 
 
 
Indian Business Leaders Certain That Government of India Wants a 
Positive Outcome at Copenhagen 
 
------------------------------------------- 
 
 
 
¶2.  (SBU) On July 18, S/E Stern met Jamshyd Godrej, the Chairman 
of consumer durables manufacturer Godrej and Boyce, senior 
executives of the $60 billion Tata Group, and Mukesh Ambani, 
Chairman of Reliance Industries, India's largest privately 
sector corporation.  Throughout the three meetings, these 
business leaders shared their opinions about potential USG 
cooperation with the Indian government and the likelihood and 
desire for a deal at Copenhagen.  Both Jamshyd Godrej, and 
senior officials from the $60 billion Tata group of companies 
believe that the Indian government ultimately wants a successful 
round of negotiations at Copenhagen.  They acknowledge that the 
GOI's public rhetoric is at times bellicose, but believe that 
the GOI is much more willing in private to pursue a deal.  Dr. 
Jamshed Irani, the Director of the Tata Sons group, pointed out 
that in a vibrant democracy like India, it is difficult for 
politicians to publicly focus on an issue like climate change 
that will not win them votes. As a result, Irani noted, there is 
a questionable commitment to renewable energy and climate change 
at the ministerial level in India.  When asked by S/E Stern, the 
businessmen gave very different answers to his question about 
who in the GoI is influential in making climate change policy 
besides the Prime Minister and his special envoy Shyam Saran. 
Godrej singled out Jairam Ramesh, the Minister for the 
Environment and Forests as being very important.  In contrast, 
Mukesh Ambani disagreed and stated that Ramesh was not very 
influential.  Ambani thought that Finance Minister Pranab 
Mukherjee, Power Minister Sushilkumar Shinde, and Oil and 
Natural Gas Minister Murli Deora were far more important than 
the Environment Minister.  Ambani also told Stern that the U.S. 
should ask India to open up the country's nuclear industry to 
private investment; he believes that nuclear power was a clean, 
cost-effective and proven alternative to the high carbon 
emitting coal-fired plants that India is currently building. 
 
 
 
Godrej Stresses that Indian Government Is Serious About Climate 
Change Despite Public Posturing 
 
----------------------------------- 
 
 
 
¶3.  (SBU)  Godrej expanded that, from Copenhagen, the Indian 
government wanted two deliverables: access to clean technology 
being developed in the West through partnerships with Indian 
companies, and access to the funding necessary to utilize that 
technology at home.  S/E Stern said that the U.S. is ready to 
enthusiastically encourage partnerships in technology 
 
MUMBAI 00000320  002.2 OF 005 
 
 
development, but unwilling to compromise on intellectual 
property.  S/E Stern also stated that he agreed with U.K. Prime 
Minister Gordon Brown's statement that significant financial 
assistance should be provided to the developing world, stating 
that the U.S. would be a major contributor to this effort. 
Godrej pointed out that funding is the bigger deliverable 
because it can be used to bring in technology, training, and 
resources.   Godrej also highlighted that the Indian public 
sector was already playing a part in mitigating climate change, 
notwithstanding the government of India's (GOI) reluctance to 
accept binding emission reductions.  For example, the government 
put labels on appliance products which informed consumers about 
the energy saving potential of purchasing this product; this 
successful program was modeled after the U.S. EnergyStar program. 
 
 
 
Godrej Emphasizes Need For Clean Technology To Be Economically 
Viable 
 
------------------ 
 
 
 
¶4.  (SBU)  Jamshyd Godrej also explained his personal 
involvement in the development of the Godrej-CII Green building 
in Hyderabad, which at the time of its completion in 2004 was 
the most energy efficient building in the world and the first 
building in India to receive a platinum rating under the U.S. 
Green Building Council's (USGBC) LEED Green Building Rating 
System.  Godrej highlighted the economic potential of green 
buildings; he claimed that such buildings cost five percent more 
to build but save 30 to 40 percent in annual operating costs due 
to energy savings.  Godrej emphasized that he did not believe in 
government subsidies for clean technology, and that green 
projects must be commercially viable without government 
subsidies.  However, he agreed that commercializing renewable 
energy sources like solar may need government assistance to 
kick-start development, but ultimately must stand on their own. 
Consumers will only "go green" based on cost, and not because of 
altruistic motives, he continued. 
 
 
 
Adoption of an Increasing Share of Renewable Energy Sources 
Challenging -- But Not Impossible 
 
-------------------------------------- 
 
 
 
¶5.  (SBU)  In a meeting with  Dr. Jamshed Irani and other senior 
Tata executives, Irani emphasized that equitable and inclusive 
growth is still a challenge for India despite the country's over 
7 percent growth rate over the past five years.  Prasad Menon, 
the Managing Director of Tata Power, acknowledged that India's 
development must take a different -- and more sustainable -- 
path from the one taken by developed nations.  Although India's 
per capita energy consumption is extremely low, using 
non-renewable energy sources to provide electricity to the 400 
million Indians who currently have no access to electricity 
would have disastrous consequences both for India and the world, 
he continued.  Menon stated that sustainability is a core 
strategy for Tata Power, which is India's largest private sector 
power utility company.  Currently, the company draws 17 percent 
of its power capacity from hydroelectric and wind power, with a 
goal of increasing this to 25 percent by 2017 and 35 percent by 
¶2030.  The company is focusing on solar, wind and geo-thermal 
energy sources to achieve this goal.  However, Menon emphasized 
that coal, which due to its abundance in India currently 
accounts for over 60 percent of India's energy mix, continues - 
and will continue - to be the primary source of fuel for power 
generation both for Tata and within India.  Unfortunately, he 
added, Indian coal tends to be dirtier and less efficient than 
 
MUMBAI 00000320  003.2 OF 005 
 
 
coal used in the developed world.  Development of clean coal 
technology is therefore extremely important, he said.  Irani 
remarked that he sees the potential for Tata to draw perhaps 5-7 
percent of their electricity from nuclear power by 2030, and 
remarked that current Indian law does not permit privately 
operated nuclear facilities.  In short, the Tata group believes 
that there is the potential for approximately 40 percent of 
India's power to be drawn from renewable sources (including 
hydroelectricity) or nuclear sources if the GOI pursues an 
aggressive renewable energy strategy and provided private 
participation in nuclear power generation is allowed.  However, 
they pointed out that renewable energy alone (excluding 
hydroelectricity) can at best account for only 14-20 percent of 
India's energy basket. 
 
 
 
¶6. (SBU)  Both Irani and Menon had several suggestions for 
encouraging the adoption of renewable energy sources within 
India.  Irani pointed out that India had already leapfrogged 
technologies in the telecommunications realm; he noted that 
currently 600 million people use mobile phones today even in 
small villages; this is a stark contrast to even a decade ago 
when only India's urban elite had access to landline phones 
operated by government-owned companies.  Similarly, a renewable 
or clean energy revolution could take place in India if 
awareness about the benefits of this technology spread to rural 
India's population of over 700 million.  Knowledge of the 
benefits of this technology would cause rapid adoption, even in 
villages, if it were seen to be in the interest of the people, 
Irani explained.  Menon agreed and added that a large push needs 
to be made for the promotion of clean technology and renewable 
energy in rural areas of India and to convert rural villages to 
green villages.  Solar, agri-mass and wind can be packaged as a 
total energy solution to the rural population and they can be 
encouraged to grow crops which capture carbon dioxide. 
 
 
 
Assistance and Partnership with the West is Key to Clean 
Technology R&D 
 
------------------ 
 
 
 
¶7.  (SBU)  Menon elaborated on Tata Power's ongoing research and 
development in renewable technology.  Tata is currently 
developing an enhanced geothermal power project in Australia 
after acquiring a stake in Australian firm Geodynamics, with the 
ultimate aim of using this technology in India for similar 
renewable energy projects.  Menon believes that this technology 
is still many years away from being put into use, both from a 
technical and from a cost point of view but has the potential to 
generate 5000 MW of power.  The company is also working with the 
state-owned Oil & Natural Gas Corporation on carbon capture and 
sequestration for an enhanced oil recovery project that captures 
carbon dioxide from the plant, compresses it and transports it 
to depleted oil wells. 
 
 
 
¶8. (SBU)  Menon noted that the technology for carbon 
gasification and storage, like most other renewable energy 
technologies, is expensive.  U.S. technological and financial 
assistance is needed to commercialize this technology as a 
source of income.  Similar cooperation on solar technology, 
storage, and batteries would also help India develop more 
renewable energy sources.  Banmali Agrawala, Executive Director 
of Tata Power, pointed out the need for technologies to be 
suited to Indian conditions; he gave the example of wind 
turbines being developed for wind speeds in India rather than 
those in the U.S.  Menon also suggested the formation of a 
consortium of countries working to develop key renewable energy 
 
MUMBAI 00000320  004.2 OF 005 
 
 
or clean energy technologies.  Such a consortium, in Menon's 
view, could initially work on the development of three critical 
technologies with soft loans provided by international funding 
agencies.  Soft loans and grants are needed to encourage R&D in 
clean energy, he added. 
 
 
 
¶9. (SBU) Menon expressed concern about language in the U.S. 
climate change legislation that was recently passed by the House 
which appears to be directed towards countries like India who do 
not accept binding emission reductions.  He suggested that a 
Congressional delegation of eight or nine senators that are 
particularly opposed to concessions or compromise with India on 
emission caps come to India and see what private industry is 
already doing to reduce carbon emissions, which he believes 
would alleviate some of their concerns.  Irani questioned the 
ministerial commitment from the GOI towards a concerted effort 
regarding climate change; he notably called the Prime Minister's 
plan on emissions "bulky" and believes that the private sector 
is the better avenue for results on the issue.  Irani and Menon 
both believe, however, that the GOI wants a deal on climate 
change.  They both also believe that the GOI is putting on the 
table much less than what is actually being done in India at 
this point. 
 
 
 
Mukesh Ambani Sees Nuclear Power As Part Of The Solution To The 
Climate Change Problem 
 
------------------ 
 
 
 
¶10.   (SBU)  In another meeting, Mukesh Ambani of Reliance 
Industries Limited echoed Irani's remarks about the mobile phone 
technology revolution in India, and further emphasized the role 
of the private sector as well as his personal role in this 
dramatic shift.  Ambani pointed to the emergence of nuclear 
energy as a significant source of power in India; S/E Stern 
agreed that nuclear is becoming part of the solution to climate 
change, causing many opponents of nuclear power to reassess 
their views.  Ambani told S/E Stern that the key to the 
transformation of nuclear energy in India would be for the 
Indian Government to allow private companies to participate in 
this sector.  Ambani gave the example that 75,000 MW of nuclear 
power is superior to 75,000 MW of coal, but that India is 
currently building 75,000 MW of coal using inexpensive Chinese 
technology that is difficult to retrofit.  Ambani believes that 
nuclear power will be cheaper than coal in the long run due to 
low labor costs in India and if the cost of pollution is 
factored.  (Note:  Anil Ambani, the estranged brother of Mukesh 
Ambani, owns the company Reliance Power which is building 
several of the coal-fired plants that Mukesh Ambani described. 
Anil Ambani is also planning to move into the nuclear power 
arena.  Past experience shows that when the Ambani brothers 
compete against each other, the competition is fierce and often 
ends with legal action.  End Note). 
 
 
 
¶11.  (SBU)  Ambani predicted that solar energy would also be an 
economical solution to climate change.  He explained that at a 
research facility in Thane, near Mumbai, Reliance was 
experimenting on developing a "solar cold chain."  In order to 
ensure that pharmaceutical products that require refrigeration 
reach their rural destinations safely, his engineers are 
developing solar powered refrigeration units.  Ambani expanded 
that the answer to meeting the needs of the hundreds of millions 
without electricity is decentralized electrification, which can 
best be provided by solar energy.  The key he noted was to make 
any solution affordable to the masses in India because then it 
can be affordable anywhere in the world. 
 
MUMBAI 00000320  005.2 OF 005 
 
 
 
 
 
¶12.  (SBU)  Comment:  All interlocutors seemed to recognize the 
need for further action on the issue of climate change, and in 
fact are already working on a variety of renewable energy 
projects.  These individuals are all from the highest echelon of 
Indian industry, and hold a great deal of influence within 
India.  They are motivated by the fact that developing renewable 
energy is economically expedient and not because of government 
support or subsidies.  They all recognize that the GoI has taken 
a hard line in negotiations on the issues of emission caps and 
renewable energy, but insist that India is willing to do more on 
renewable energy than they are willing to offer.  It may useful 
to continue to further engage with Indian industry in the run up 
to Copenhagen to ascertain India's true commitment to mitigating 
climate change. 
FOLMSBEE