India, US, and allies set to sign Clean Economy agreement

The pact aims to help member countries achieve climate goals through improved market conditions and collaborative financing mechanisms

June 6, 2024

The agreement is expected to be signed at the Clean Economy Investor Forum in Singapore

Senior officials from India's commerce and industry ministry are participating in the forum

The clean economy pillar addresses greenhouse gas reduction, sustainable agriculture, carbon capture, and deforestation prevention

Experts caution against allowing the import of genetically modified seeds and foods, stressing the need to protect farmers' rights and maintain agricultural subsidies

India, the US, and 12 other countries are expected to sign an agreement to achieve climate goals through collaborative financing without imposing trade barriers. The Clean Economy Agreement, part of the Indo-Pacific Economic Framework (IPEF), seeks to enhance market conditions to support climate objectives, officials reported. The agreement is anticipated to be finalised at the two-day Clean Economy Investor Forum in Singapore, which concludes on Thursday. Notably, senior officials from India’s commerce and industry ministry actively participated in the forum, underscoring India’s commitment to the agreement.

The pact is in its final approval stages, having completed the legal review. This will be the second agreement under the 14-member IPEF, following a supply chain resilience pact signed last November. The IPEF includes countries such as India, Australia, the US, Japan, Fiji, South Korea, New Zealand, Singapore, and Thailand, collectively representing 40% of global GDP and 28% of global trade in goods and services. The IPEF focuses on four key areas: trade, supply chains, clean economy, and fair economy (covering issues like tax and anti-corruption). India has opted into all pillars except for the trade one.

The Clean Economy pillar, a key component of the Clean Economy Agreement, addresses environmental issues with specific objectives. It aims to reduce greenhouse gas emissions across industries, promote carbon capture and storage, and establish financing mechanisms for low-carbon projects. Member countries are expected to work towards decarbonising the transportation sector, adopting sustainable agricultural practices, combating deforestation, and creating conditions conducive to these efforts.

Trade experts have cautioned that India must be wary of importing genetically modified seeds and foods under the guise of food security, which could lead to an influx of subsidised agricultural commodities. A Delhi-based trade expert, speaking anonymously, warned against allowing large seed monopolies to dominate, which could force farmers to purchase seeds repeatedly. The expert stressed that India should protect farmers’ rights to reproduce or exchange seeds and maintain the ability to limit trade or provide subsidies for fertilisers, electricity, and irrigation.

Source: Economic Times

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