The low carbon pact proposed between the UK and India may well be the first of many such technology agreements.
Commenting on the plans outlined yesterday to forge an alliance between the two countries to work on cleaner technologies, Dr Samuel Frankhauser, principal research fellow at the Grantham Research Institute on Climate Change and the Environment at the London School of Economics, said it was very important that the UK teamed up with emerging economies like India. But he added that the announcement from business heavyweights such as Sir Stuart Rose must be followed up with real action if it is to be effective.
He explained: “This is a positive thing for the UK – it wants to be a leader in low carbon technologies and so if needs to cultivate the export market. There’s clearly potential, there’s a lot of interaction between India and the UK, there’s a kind of cultural affinity there.”
Yesterday’s call for a “low carbon collaboration” between the UK and India came in a report from the UK-India Business Leaders Climate Group (BLCG).
BLCG members said they wanted closer trade ties on green technologies with the aim of boosting economic growth as well as cutting carbon emissions. They added that it was the first time business leaders had come together to look at the practical steps necessary to deliver a low carbon economy.
The report included a new Charter of Principles as well as “practical ways that India and the UK can work together to unlock a new era of green growth and economic collaboration”.
Member companies want to see a faster shift to a low carbon economy – taking advantage of “significant opportunities” in areas such as clean energy, low carbon technology and energy efficiency. The companies behind BLCG are collectively valued at more than £200 billion, which should help their case. As should the fact that the group is led by M&S chairman Sir Stuart and Rajan Bharti Mittal, MD of Bharti Enterprises.
The announcement followed reports that the UK and India could more than double their bilateral commerce to $24 billion (£15 billion) in the next five years. A survey by Ficci-Grant Thornton revealed this would be achieved by upping trade and investment co-operation in areas such as IT, science and energy.
BLCG, which was set up by David Cameron when he was still in opposition, recommended the following be implemented immediately:
• An online Clean Technology Development Directory of early stage Indian technologies across a range of sectors to give information to prospective UK investors.
• A Low Carbon Capital Manual “providing technical information on the financial tools, and the methods for creating them, for raising capital and increasing public private investment in low carbon projects in India”.
• A Low Carbon Economy Summit to be held in India next year. This will bring together the “private equity/venture capital community in the UK with the technology innovators of India”.
The group also wants to get rid of barriers to capital flows to stimulate investment in the low carbon economy and joint R&D programmes as well as a skills exchange.
The British government has been very keen to improve relations with emerging economies such as India and China, with the PM visiting both countries in the past few months.
Meanwhile, India has called for developed nations to make green technology available to developing countries free of charge.
Dr Frankhauser said the BLCG report was a step in the right direction but warned that it was “the stuff that happens underneath it that really matters”.
He added: “There’s potential in it, it may well be effective. This idea just depends on whether somebody is willing to grab it and run with it. Working level firms from one country need to work with firms from another country. The Summit and these other proposals are ways of facilitating this.
“The UK needs exports and India needs technology development. But the medium and long-term, the UK needs India more than India needs the UK.”
Dr Frankhauser said he hoped this would be the first of many such agreements, adding that similar pacts in the future would point towards China and Brazil. He said: “David Cameron was in India shortly before he was in China. I’m sure he said some very similar things while he was there. We’ve heard some positive noises about China in relation to David Cameron’s visit there.”