States are the beating heart of climate action

Following one of Maharashtra’s worst floods in decades, the state’s environment minister, Aaditya Thackeray, has called for a new Centre-state coordination council for climate. The need for new climate-specific coordination mechanisms is undeniable. Frequent disasters are battering India’s states and creating additional burdens on state finances and administrators already stretched by Covid-19.

But reimagining 20th-century federal institutions in the age of the climate crisis requires a great deal more than just coordination bodies. The questions we ask must be aimed at transformation.

How can states be enabled to transition toward climate-resilient and low-carbon societies? How can they be empowered to experiment and learn from each other? Which mechanisms will enable slow-moving states to catch up with those taking climate consequences more seriously? These questions are important because states are the beating heart of climate action, constitutionally responsible for areas such as agriculture, water, and local government, and jointly responsible for electricity and forests, which are critical to India’s emissions.

The challenge is that Indian federalism is famously top heavy; the Centre’s bureaucratic, financial, and agenda-setting capabilities are more potent than those of the states. In a new policy brief from the Centre of Policy Research, we argue that giving the states room to innovate will require multiple strands of change: Enhanced state capacities, sharper fiscal incentives, and new coordination mechanisms.

The starting point is augmented capacity within states to address the climate crisis. Overburdened state bureaucracies have historically been unable to grapple with the complexities of climate policy, a problem made worse by Covid-19. Although challenging in present fiscal conditions, the states will need to invest in specialised personnel across core climate departments (power, agriculture, water) and in nodal climate units that coordinate across departments and with local bodies.

The Centre can play an important supporting role by providing credible analysis on low-carbon policy choices to the states when required. It can also help by expanding the capacities of central universities and agencies, and supporting knowledge creation and policy ideas emerging from civil society.

Fiscal incentives for state-level action have long been a sticking point. State Action Plans on Climate Change (SAPCCs), mandated a decade ago, faltered due to ambiguity about who would pay for the sprawling plans. States that update their plans should be given a clear sense of how much additional support they can rely on. To meet its constraints, the Centre could selectively incentivise actions that align with national priorities and international pledges.

Given the heavy central skew in India’s fiscal architecture, downward flows to the states such as finance commission (FC) allocations and centrally sponsored schemes (CSSs) could help tap into low-hanging emissions and resilience gains.

Previous FC reports have chartered a progressive course in areas such as disaster preparedness, forest management, and air pollution, while CSSs related to urban planning, electricity development and rural work (for example) are pertinent to the climate crisis. Such modifications are an interim step; long-term fiscal strategy should emphasise flexible climate funds that the states can adapt to local realities.

Greater capacity and financial incentives will lead to more policies at multiple scales, which throw up the question of coordination. Coordination is challenging because varied state efforts must ultimately coalesce into a coherent national story, even while allowing for local experimentation. A strategic national framework that lays out broad guidance and signals opportunities and priorities is an important starting point.

However, a national framework would have to be arrived at through a structured deliberative process with the states, something the National Action Plan on Climate Change (NAPCC) failed to do. In an earlier piece, we had proposed that an independent expert body at the national level, the Low-Carbon Development Commission (LCDC), be tasked with advancing an analytically sound national mitigation strategy and providing advice on demand to states. A revived SAPCC process, with updates at set intervals, would compel states to refine plans and allow them to respond to national and international incentives.

The Centre and states can coordinate this process through existing mechanisms directed toward climate ends, such as the forum of electricity regulators or the annual meeting of energy ministers; through the LCDC, which is purposely designed to seek state inputs; and through the revival of the Inter-State Council, a moribund but constitutionally-backed Centre-state coordination body, which notionally lends itself to strategic coordination across adaptation and mitigation.

Promoting state climate action requires multiple, interlocking institutional reforms at all levels of government. Crucially, it involves getting the balance between the Centre and the states right and allowing the states room to experiment despite the constraints of the federal structure. In the present context, this process is challenged by depleted state coffers and capacities. But the long-term prospects for India’s development depend on getting the institutional foundations right.

Originally published in Hindustan Times on August 2, 2021.

Environmentality is a collection of ideas, perspectives, and commentary by researchers at the Initiative on Climate, Energy and Environment, Centre for Policy Research, New Delhi. Views and opinions expressed in this blog are solely those of the authors. They do not represent institutional views.

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