The Climate Rifts Biden and Modi Couldn’t Heal

Listening to President Biden and his Indian counterpart Prime Minister Narendra Modi talk last week, it would be easy to think the two countries were leading partners tackling climate change. The pair touted their biggest climate domestic policies, and announced a slew of new collaborations to cut emissions.

“With this visit, we’re demonstrating once more how India and the United States are collaborating on nearly every human endeavor,” said Biden, including on “the global clean energy transition and tackling climate.”

But reading between the lines reveals a challenging rift. During his visit to Washington, Modi said that India is the only G20 country to meet the climate commitments made in the talks leading up to the Paris Agreement. And he noted the “talk” about financial support, saying that “some countries” had contributed without mentioning the U.S. (which by almost any measure hasn’t met its international climate obligations). “India has not caused any problems to the environment,” Modi said. “However, we are playing a leading role.”

For his part, Biden acknowledged that the U.S. had “caused damage” with its development over the last 300 years but cited the Inflation Reduction Act as evidence that the country is righting a wrong.

The veiled tension may have been indiscernible to the untrained eye, but it is of critical importance. Working together on climate change serves both country’s interests, not to mention the global community’s. But India is, with good reason, adamant that the world not lose sight of the west’s responsibility for the climate change we’re experiencing today—and keen to highlight the developing world’s need for further support to meet climate goals.

The U.S., on the other hand, wants to portray itself as the global climate leader, but doesn’t have the best hand of cards to play. Yes, the U.S. passed a nearly $370 billion climate law to support a domestic clean-energy renaissance, but the political dynamics in Washington don’t give much room to fully address demands from countries like India.

The result is a tricky diplomatic situation with a seemingly unbridgeable historical context, and yet officials from both countries realize that they need to at least try. To what degree they succeed will shape the climate fight for decades to come.

Since the dawn of the Industrial Revolution a century and a half ago, the U.S. has generated 20% of all emissions put into the atmosphere, far more than any other country. India developed much more slowly. The country was colonized during the Industrial Revolution, stymying its growth, and a series of economic policy decisions after independence are thought to have kept the country relatively poor. As a result, the country has contributed just 4% of emissions despite its enormous size.

That history comes up over and over again in climate diplomacy. The 1997 Kyoto Protocol gave developing countries an emissions dispensation for just that reason. In the negotiations that led to the Paris Agreement, the country demanded more finance from its developed counterparts. Today, as India’s emissions are poised to surge, its leaders consistently remind their counterparts that they haven’t contributed all that much to the problem and need industry to fuel their growth.

At the same time, Modi has set bold targets for renewable energy deployment, albeit without committing to phasing out the country’s coal industry. Officials across the political spectrum have emphasized that the country won’t get ahead of the market to take on the cost of addressing climate change. Lawmakers I’ve spoken with say consistently that their constituents are more concerned with ensuring a stable power supply than addressing climate change. “It’s very easy to say ‘move away from coal,’” Mahua Moitra, a Member of Parliament in India, told me last month at an event I moderated at the University of Chicago. But “it’s a little more of a tightrope walk for us because we have to deal with energy needs.”

Amitabh Kant, the Indian official charged with shepherding this year’s G20 summit in India, articulated the country’s nuanced position to me in December at his office in Delhi. He repeated the oft-cited history: “India has not contributed much to climate change, and has only taken up 1.5% of the global carbon space.” But despite that, he said, the country could lead the transition: “It has the size and scale. It has the climatic conditions.”

The key, he told me, is for the market to change. That would mean a global push for renewable energy pushing the cost of green technologies down, making them more economical. Greater availability of capital and lower costs to finance renewable energy projects in India would also help, as would favorable trade relations that could give India a market to export the green products it manufactures.

The U.S. could play a key role delivering on all of those objectives, but the Biden administration’s ability to deliver is limited. The Inflation Reduction Act will push down the cost of clean energy technologies globally, but the law has also rankled Indian policymakers who are upset with its pro-U.S. subsidies, which they say have hurt India’s industry and chances of growing its own clean energy economy. It’s “the most protectionist act ever drafted in the world,” Kant told me. U.S. financing for clean energy projects in India could help, but is limited. In 2021, Biden promised more than $11 billion to help developing countries with their climate efforts, a small sum compared to the scale of the challenge; Congress has yet to allocate that money.

None of which makes for a good sound bite in discussions with India. Instead, the administration has sought to rally the private sector and multi-lateral development banks—most importantly the World Bank—to provide India with the capital it needs. Last week, the U.S. and India said they would create “investment platforms” to help private capital find renewable energy projects in India. “There’s a real unity within the administration of wanting to get the banks to do more lending, more engagement on climate, and to help leverage private sector deployment of the trillions of dollars,” John Kerry, Biden’s climate envoy, told me earlier this year.

At the University of Chicago event, Vinay Chawla, senior advisor for climate finance at the U.S. State Department, said that the two countries could also focus on aligning strategic government investments so that both countries benefit from each other’s commitments to clean energy. “Coordinating industrial policy between countries like the United States and India is a real opportunity to tackle climate change and find the investment opportunity,” he said.

These steps may help move the U.S.-India climate relationship in the right direction, but without a dramatic acceleration there will be no escaping the enormous historical and political context in conversations between the two countries. At best, that’s a distraction. At worst, it’s a serious impediment that could throw global climate efforts off track.