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TAKING THE INITITIVE

By Carl Pope

Clash of the Low-Carbon Titans
India battles China for clean-energy supremacy


KAL Kallaugher/The Economist/www.kaltoons.com
U.S. politicians often lump India and China together as job stealers and looming global-warming heavies, but that vision is dangerously limited. China is on its way to becoming the world's largest economy, but rival behemoth India may soon surpass its neighbor's explosive growth rate. Both countries assume that their rapid expansion will continue but worry about the environmental consequences. Like the United States, neither is keen about a binding international climate agreement; but unlike us, both are serious about limiting their carbon dioxide emissions. Whether we like it or not, the energy paths they choose may affect our own.

India is relatively poor in carbon fuels, and it worries about competing with China on the international oil and coal markets. It emits far less CO2 than China, both overall and per capita, so it is not yet locked into carbon-based growth. Gas and diesel are heavily taxed in India, the government just placed a new levy on coal, and it has put together an ambitious energy-efficiency program.

In China, renewables provide a larger percentage of power than in the United States or in India. China's big concern is its need to import energy and raw materials. In 2010, Premier Wen Jiabao warned that he would employ an "iron fist" to make sure the country cut its energy use by 20 percent by year's end. China also aims to move away from fossil fuels, reducing CO2 emissions by 40 to 45 percent by 2020 via a massive government stimulus of $750 billion.

Unlike China, which gives huge state subsidies to clean-tech companies, India subsidizes poor consumers, including those who rely on kerosene for lighting and cooking. Farmers get electricity for free—if only for a few hours a day. But the electrical grid has not yet been built out, and hundreds of thousands of Indian villages have no electricity at all. The cost of wiring them is enormous: Generating dirty electricity from coal costs 6 cents per kilowatt-hour, and every additional kilometer of wiring needed to connect a village to the grid adds 2 cents per kWh. So, for many remote villages, local or "distributed" solar (currently running about 20 cents per kWh) is cheaper than conventional power. India has an ambitious 20-gigawatt solar goal—most of which, sadly, focuses on centralized, utility-scale projects that won't reach remote villages. But in spite of India's ideological affection for village development, it has not yet brought sustainable technologies to the local level.

India's strategic approach, which emphasizes building globally competitive companies, is very different from China's, which focuses on government-financed state corporations. But India's hugely decentralized, democratic society doesn't move as quickly as its highly controlled neighbor's. (Ambitious government announcements in India are routinely scorned as unlikely to be effectively implemented.) Both countries, in fact, find governance challenging. China plans to move hundreds of millions of citizens to new cities, but it needs to find strong mayors to run and manage them. India is trying to maintain its current social structure of small towns and villages while its big cities suffer their own failures.

The competition between the two nations for low-carbon preeminence is critical for the climate, because it will influence which development model the rest of the world is likely to embrace: China's top-down approach or India's bottom-up version. Since the U.S. model has far more in common with India's, there ought to be opportunities for our nations to collaborate more closely. If bottom-up India can't compete with top-down China, then the bottom-up U.S. economy is likely to be in big trouble.

CARL POPE is the chairman of the Sierra Club. E-mail carl.pope@sierraclub.org; read his blog at sierraclub.org/carlpope.

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