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A research paper from the Observer Research foundation proposes a Green Development Compact that integrates Northern capital, innovation, and corporate capacity with Southern scale, speed, and renewable endowments.
Authored by Samir Saran and Amitabh Kant the research argues that the United States (US) and the European Union (EU) have shifted beyond market-led climate action toward state-backed green industrial policy, driven by competitiveness, economic security, and technological leadership concerns. Despite differences in approach, Atlantic strategies share an inward focus that positions the Global South primarily as a consumer market or supplier of intermediate inputs. Such models are politically unsustainable for developing economies and economically inefficient for achieving the scale required for the global energy transition. The paper outlines practical instruments to operationalise this framework, including long-term offtake guarantees, shared innovation commons, and financial mechanisms that reduce risk for Southern projects. In the research, the authors argue that the US and the European Union (EU) have moved past the Paris Agreement, and that they should be spending their already cash strapped economies in green industrialization. "The global transition to energy-efficient production is the defining economic event of the century. As is the case with all such large-scale, global transformations, views and plans are filtered through as many prisms as there are national and sectional interests," their research observes. It further said that the US is now massively focused on retaining American superiority and increasing foreign investments. The US is also assuming that it'll be ahead in retaining an input-cost advantage as compared to its peers. The EU needs to grapple with job crises and securing fuel. They also have to exercise control over private sector that is not directly under their control. For India, the research says, "As we have argued, however, for the Global South--including for India--the climate transition must be about development as much as decarbonisation. In other words, no country expects that its future within a new green world order is to remain at the periphery of the global value chain." The Deese proposal for a "Clean Energy Marshall Plan" plans the subsidisation of domestic US manufacturing, alongside access to foreign markets that will absorb the goods so produced. Shorn of its green fledging, this is also broadly the Trump economic mandate. This is why, as many have already argued, Trump's industrial policy - with or without federal subsidies - will impact the global green transition similarly to Biden-era proposals such as Deese's. Both share an injection of liquidity alongside protectionist impulses, the research says. The research brife argues that India and the Global South stand ready to be partners in this effort, and invite our Atlantic partners to look beyond models of the past to invent new ones for our shared future. Mutual dependence is a reality; the North needs our scale as much as we need their capital and technology. What is needed is for the institutions we build and the compact we design to reflect that reality, the research concludes. (ANI)
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