INDIA: REMOVING CLEAN TECHNOLOGY BARRIERS

UNCLAS SECTION 01 OF 02 NEW DELHI 003603

SIPDIS

SENSITIVE BUT UNCLASSIFIED
SIPDIS

DEPT OF ENERGY FOR TOM CUTLER, MARK GINSBERG
DEPT OF COMMERCE FOR DAVID BOHIGIAN, JOE NEUHOFF, WILLIAM ZARIT,
GREG LOOSE, LINDA DROKER

E.O. 12958: N/A
TAGS: SENV ECON ENRG TSPL TRGY EFIN BEXP IN
SUBJECT: INDIA: REMOVING CLEAN TECHNOLOGY BARRIERS

REF: A) 2007 NEW DELHI 3262, B) 2007 NEW DELHI 2078, C) 2007 NEW
DELHI 2085

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1. (SBU) Summary: Clean technology transfer to India faces several
market and policy challenges. (Ref A) By raising awareness on the
anthropogenic causes of climate change via television and reviving
eco-labeling, a viable market can be created. In addition,
manufacturers should look to partner with microfinance institutions
involved in clean technology financing. Finally, from a policy
perspective, more effort is needed to inform the Government of India
(GOI) on the public costs of conventional energy and to emphasize
the power of cooperatives. End Summary.

Raise Climate Change Awareness via Television
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2. (SBU) From a market perspective, the first step will be raising
awareness among consumers and businesses on the impacts of climate
change. The Times of India recently reported on a survey conducted
by HSBC, The Hong Kong and Shanghai Banking Corporation, which found
that Indians are more aware of the anthropogenic causes of climate
change than the people of any other developing or developed country,
citing a 60% awareness rate. However, the article clearly stated
the findings were based on a sample size of 9,000 respondents across
four continents, of which the Indian population was described as
"urban mass affluent" - indicating those surveyed were not
representative of India's population as a whole. These types of
misleading figures give the public, or at least the urban affluent
and middle class English readers of the Times of India, a false
sense of complacency about India's eco-friendliness.


3. (SBU) In order to raise awareness among the population at
large, New Delhi SciOffs are consulting on a project with award
winning Indian documentarian, Nila Madhab Panda, to develop a
multilingual television series on the potential effects of climate
change on local communities. Panda had success in raising awareness
on feticide in Orissa via a televised series in 2004, sponsored by
USAID. The New Delhi Environment, Science, Technology and Health
(ESTH) Office plans to develop a grant request to fund thirteen
episodes of Panda's climate change series in seven local languages.
While there are countless local and national newspapers, television
is the one unified medium that is far reaching, with even the
poorest households of the slums owning a set. Moreover, with
India's literacy rate of 61%, television will be able to reach an
audience much broader than print.

Revive Eco-Labeling to Create a Market
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4. (SBU) To help create a market for eco-friendly products and
business practices, the GOI should look to better publicize its
EcoMark scheme (Ref A),as the initial launch had virtually no
publicity leaving consumers unaware. In addition, EcoMark differs
from other foreign eco-labeling initiatives in that it requires
quality standards in addition to environmental standards. At a time
when the eco-friendly market is in a nascent stage, manufacturers
will be reluctant to endure such a rigorous selection process. More
importantly, Ecomark's steering committee lacked representation from
environmental groups and the private sector, which were hallmarks of
the successful eco-labeling schemes of Japan, Germany, Canada, and
Sweden. To spur manufacturer interest in EcoMark, the GOI should
look to financially reward companies that produce EcoMark products
with incentives such as tax and excise duty concessions. For larger
appliances such as washers and refrigerators, the GOI should look to
offer rebates to customers to help with higher prices. Finally, for
manufacturers doubting the potential of an eco-friendly consumer
base in India, greater emphasis should be put on the value of green
products in export markets, where developing country manufacturing
practices are constantly scrutinized.

Tech Firms Should Build Relationships with Indian Banks
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5. (SBU) While financing options for the average Indian consumer
have been limited, microfinance institutions and international aid

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organizations have moved in to provide their services.
Historically, microfinance loans were geared towards those that have
an entrepreneurial spirit and were awarded based on an individual or
group's business case. Today, more and more initiatives are
combining microfinancing with clean technology proliferation, such
as Selco India. (Ref A) In another example, the United Nations
Environment Programme has aided over 100,000 people in 18,000
households in financing their solar photovoltaic electric home
systems through the Indian Solar Loan Programme. The success of
this initiative, based on innovative interest subsidies, has helped
the growth of a credit market among India's poor and today there are
20 mainstream banks with over 2,000 branches providing solar
financing to this previously ignored customer base. These
initiatives typically establish an exclusive list of qualified
vendors to provide technology. As the credit market flourishes in
the vast rural and poor communities, both foreign and domestic
technology providers should be vying for inclusion.

Influence Policy through Public Costs of Conventional Energy
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6. (SBU) From a policy perspective, as the GOI has been well aware
of climate change risk from a normative perspective, more effort is
needed to show the true impacts made on society and the environment.
New Delhi SciOffs are working on an externality valuation
initiative with the World Institute of Sustainable Energy (WISE),
based in Pune, India. WISE has solid experience in policy advocacy
studies and consultancy projects with the GOI, such as the drafting
of the Model Renewable Energy Law for India that addresses the
renewable energy gap in the Electricity Act of 2003. SciOffs will
work with WISE to assess the public cost, which is made up of the
social and environmental costs, of conventional versus renewable
energy. The overall goal of the study is to help generate policy
that is more favorable to renewable energy and clean technology
growth and to eliminate the public perception that renewable energy
is expensive since it may prove to be much cheaper in terms of
long-term public cost. The New Delhi ESTH Office plans to develop a
grant request to fund this data-rich study.

Address Scale via Large Scale Procurement
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7. (SBU) To address the issue of scale, the GOI could arrange for
large scale procurement of clean technology which would bring down
prices for end users as well as help manufacturers achieve minimum
efficient scales. An example of this is the Bureau of Energy
Efficiency's recent announcement that they will make energy-saving
compact fluorescent light bulbs available at the same price as
standard light bulbs, with the lost revenue offset by carbon credits
under the clean development mechanism of the Kyoto Protocol.

Cooperatives Create Economies of Scale
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8. (SBU) If large scale procurement of clean technology is not
feasible, the GOI should look to promote the formation of
cooperatives among consumers and businesses. These cooperatives
will increase buying power, open up financing options, and also
serve as a platform for the sharing of best practices in energy
efficiency. The Warana Cooperative, formed in 1978 in Kolhapur,
Maharashtra, is illustrative. Still functioning today, Warana
empowers the rural interior by bringing agricultural supplies such
as farm equipment and fertilizers to farmers and consumer packaged
goods to households at reduced prices. The Warana Wired Village
Project, started in 1998, was a joint initiative between Warana, the
GOI, and technology providers to build an IT infrastructure for 70
rural villages via internet-equipped 'facilitation booths'. By
pooling orders these cooperatives are able to bring cost-prohibitive
technologies to the masses and could be used as a model for the
distribution of clean technology throughout rural India.

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