India and the United States have finally signed an agreement to set up a clean energy research center to enhance research and development of less carbon-intensive technologies.

The agreement was signed by the Indian ambassador to the US Meera Shankar and US Deputy Secretary of Energy Daniel Poneman in Washington. This formal agreement follows discussions between the Indian Prime Minister Dr. Manmohan Singh and President Barack Obama during the former's visit to the United States in November 2009. The deal has come just in time for President Obama's visit to India in early November.

The two leaders had signed a Memorandum of Understanding to enhance cooperation on energy security, energy efficiency and climate change in November 2009. With barely few weeks to go for the Copenhagen Climate Summit, the agreement was seen as a major thrust towards reaching consensus on an international climate deal. However, the discussions failed to make any significant impact outside the bilateral realm of cooperation. The finer details of the deal were discussed during the first ever Indo-US strategic talks held in June in Washington.

According to the deal, the two nations will cooperate in the development of clean energy technologies like solar energy, energy efficiency, smart grid, unconventional natural gas, second-generation bio-fuels, and clean coal technologies including carbon capture and storage and integrated gasification and combined cycle.

Sustainable Economic Growth for India

India is one of the fast growing economies in the world and every year its energy demand is accelerating at a very high rate. India is also the fourth largest producer of greenhouse gases. In order to sustain its economic growth while preventing any adverse impacts on the climate, it is important that India has access to cheap clean energy technologies.

Trade Opportunity for the US

For the United States, this is a huge trade opportunity. The US has been aggressively pushing for extensive trade relations with India since it lifted the economic sanctions imposed following India's 1998 nuclear tests. The diplomatic troubles that the US went through to get the nuclear deal finalized shows the importance that the US administrations have given to the strategic and economic partnerships with India.

The nuclear deal has opened a billion dollar market for the US companies which already signed deals with the Indian government to supply equipment for the new nuclear power plants. This agreement could open up the nascent but rapidly growing market of clean energy technologies in India to the American companies.

Alternative to Climate Change Deal

There is immense pressure on both India and the US to contribute more towards finalizing an international climate deal as both as major players in the international negotiations and have responsibilities as the largest greenhouse gas emitters. However, there are several other diplomatic and technical hurdles which have almost completely stalled the multilateral negotiations.

There is no hope of seeing an American climate change bill and India asserts that it has limited responsibility towards reducing its carbon emissions as it is a developing country. Now, such initiatives would have multifold benefits and would help build consensus for a long-term climate change deal.

The agreement would be a foundation for India to build its low-carbon intensive infrastructure on which would enable it to consider making real carbon emission reductions. It would result in the invention of affordable and efficiency clean energy technologies which can be exported to other countries which would equip them to cut their carbon emissions. The deal would put pressure on other countries to commit more towards the international climate deal when they would see India and the US leading the fight against climate change.

The whole initiative is carbon-efficient in itself. The centre will be a virtual one, with no physical infrastructure, where Indian and American professionals, students and policy makers will be able to interact.

Hat tip: The Hindu
Image: Jason Reed/© Reuters 2010/PicApp

The views presented in the above article are author’s personal views and do not represent those of TERI/TERI University where the author is currently pursuing a Master’s degree.