My Friend on 104th Floor calls Beijing to get back a blue sky in Mumbai

Most of my readers know about my friend who lives on the 104th floor in the tallest building in Mumbai. For those who don’t know, this friend of mine is the richest person in the world. His wealth is more than the wealth of Ambani’s (I mean Mukesh), Adanis, Tatas (including Shapoorji’s), Birla’s and Mahindra’s, Agarwal’s and Mittal’s all put together. He pays income tax as much as the annual budget of the Municipal Corporation of Greater Mumbai. But despite the financial power he holds, he is an amazingly simple, friendly, well-meaning and a warm gentleman.

Generally, my friend does not have a time enough to look down from his terrace on 104th floor. But last week when he did, he didn’t see any thing below, absolutely nothing and it looked like the city was under a blanket of a fog. There was no Queens neckless shining at night at the Marine drive nor did he see the flares burnt on the stacks of petroleum industries in Chembur.

He got a bid worried and even thought that he was hijacked to somewhere in the outer space. He asked his personal secretary the reason and  he was told that this was not the fog but a smog that was formed in Mumbai as a result of air pollution.

Since the problem sounded a bit technical, he called my Professor Friend for a Sunday breakfast. As usual I tagged along.

Professor explained my Friend the basics of air pollution. He spoke the National Clean Air Programme (NCAP), a Graded Response Action Plan (GRAP) for the NCR. He ran some statistics on the automated air quality monitoring networks operating in cities across the country that provide air quality data on 24×7 basis and this data is transmitted to the servers at Central and State Pollution Control Boards. Prediction models are also in place that forecast likely pollutant concentrations and issue warnings. Air Quality Indices (AQI) are regularly reported and broadcasted on TV channels. Everybody now knows what is AQI and its interpretation on the magnitude of air pollution.

I think Professor did pretty well because at the end of the explanation my Friend asked “if we all know enough about this subject, and doing something (or spending money ) then why are we not able to solve the problem”.  I was about to say that that this was a million, oops billion dollar (I corrected as my Friend is not interested in the millions) question.

“Professor, has anyone solved this kind of a problem?” My Friend asked. He sounded curious.

Professor then spoke about the Blue Sky program of China where a remarkable result was achieved on air pollution reduction in the Beijing-Tianjin and Hebei (BTH) region. Since its launch in March 2017, the PM10 and PM2.5 concentrations in the region have been remarkably reduced. In addition to the reduction in average PM10 and PM2.5 concentrations, there has been a significant decrease in the number of heavily polluted days, especially in the winter period.

“Oh, then let us get the Chinese. Why are we wasting time? “ My Friend muttered and asked his personal secretary to connect to the office of the President in Beijing. Call from my Friend is always globally respected and so the Chinese Premier immediately came online. My Friend spoke in Chinese I guess as he said Nǐ hǎo ma? Means how are you?  By the way, apart from the lingo of business, my Friend fluently speaks 12 languages of the world that covers 80% of the global population.

He put the phone down after a brief 5 minute conversation with the Premier and said “Chinese experts on air pollution will arrive tomorrow in Mumbai. I am dispatching my chartered plane right away that runs on Sustainable Aviation Fuel (SAF).

Next day, we were summoned to listen to Dr Wu, head of the Chinese mission. My Friend had invited his Head of CSR and Chief Finance Officer (CFO) as well for the purpose of actioning

“Do you know Professor that the President Xi of PRC said that “air quality is direct indicator of happiness” and “air pollution is one the top three national priorities”. Dr Wu started the conversation.

Yes, that was indeed true.

My Friend immediately called the PMO and said that he is dispatching a top notch global air pollution consultant to draft a similar or even better statement for the Hon Prime Minister.

“We lack the political will to push towards a committed and concerted action on reducing air pollution unless it becomes part of the election manifest” Professor whispered. I reminded him that 2024 elections are coming up soon, so talking about air pollution could be a good timing.

Dr Wu explained the Chinese approach. He said that much of the emission reduction in BTH region was achieved by shutting down and relocating highly polluting and economically weak industries, closing obsolete industrial boilers and moving from coal-based heating & cooking to natural gas. In September and October 2017, over 130,000 polluting industries in the BTH were closed.

We were a bit stunned after listening to this kind of bulldozing approach.

Seeing that we were dumbfounded, Dr Wu said that just the political will would not work. A supreme power of enforcement is necessary to bring in the desired change.

Professor lighted his cigar and said “In India, do you think such a kind of enforcement is possible? Take the case of the challenge of relocation of polluting industries in Delhi. In 1996, the Delhi State Industrial and Infrastructure Development Corporation (DSIIDC) had, under the relocation scheme for industrial establishments, allotted plots to factory owners running their units from residential areas. And as far back as 2003, the Supreme Court, in its judgment in MC Mehta v Union of India, had directed that all industrial units that had come up in non-conforming areas on or after August 1, 1990, should be closed within a given timeframe. But, even in 2018, as the DSIIDC listing proves, these industrial units continue operations from residential areas.” I thought Professor made an interesting point. Dr Wu smiled. “This wont happen in China” he said.

“It’s all related to financing” my Friend said. He asked his CFO to set up a special fund on ecological modernization of highly polluting and economically weak industries in Mumbai so there was no question on relocation.  I will finance this line of credit if the Government cannot. He quietly said. But  I knew he had sensed a good IRR, of course at higher risk, in such a modernization scheme and was willing to play the game.

I remembered recent directions given by the Maharashtra Pollution Control Board (MPCB) to bakeries in Mumbai to shift to cleaner fuels. And what about the directions by BMC asking erection of 35 feet high tin/metal sheets around the periphery of construction projects having a height of more than 70 meters. (Don’t ask me how the numbers like 35 and 70 were decided. And please note that two times 35 makes 70 but former is in ft and latter in meters)

My Friend told his CSR head to finance all the bakeries in Mumbai for moving to cleaner fuels as a grant from his CSR Fund. “Oh, this is so strange and so generous”, Dr Wu exclaimed as he was perhaps not used to the term generosity. Only I knew the real secret that my Friend was addicted to the famous bun musca from the Crown Bakery and couldn’t have tolerated its shutdown. Professor suggested more such sectors.

Dr Wu informed that the action plans in the BTH were assessed on conducting a cost benefit analyses of various policy packages to identify  least cost solutions while aligning with the long term goals. Special plans were developed to deal with episodic conditions in the winter period. The bottom line was that all action plans or policy packages should make an economic sense.

In contrast, in India we follow a checklist approach and do not attempt to do cost-benefit analyses. Many times we look at actions without supporting policies, institutional framework and financing. We also look at actions in isolation and not in “packages”. Green financing platforms such as BTH Air Quality Improvement Fund were created to lend industries for needed investments. Projects were assessed based on quantification of economic, environmental and social benefits.

I remembered the grant fund provided by the World Bank to replace two stroke rikshaws with 4 stroke engines in Dhaka. This cost of grant financing was found to be lower than the costs saved to abate the health impacts of air pollution on the citizens. But in India for that matter in most of the world, who cares for such environmental externalities?

We were a bit surprised to see how the action plan in BTH had a strong element of financing. Dr Wu pointed out that a leap frogging fund (with assistance of ADB), was established to promote “high end technologies” and innovations in the BTH region. The idea is to achieve “deep industry transformation” and apply the directives under the law on circular economy to improve the energy mix through cleaner fuels and promotion of renewable energy. This transformation gave a competitive advantage to the industries while curbing air emissions. I thought the scope could be extended to cover more investments in public transport (based on the principles of circular construction) and in electrification of transport using renewable energy and battery recyling infrastructure.

I could clearly see a much wider perception of air quality improvement infrastructure and investments in PRC. In India, we lack such an approach where innovation, modernization and financing are linked to conventional regulatory control. Our approach is limited or narrow, reactive, rather negative and not opportunistic. To us opportunities are for mask makers, those who manufacturer sensors and dust sucking devices !

No wonder that the Chinese proverb says that every crisis is an opportunity! In India all we are doing is recommend people to stay indoors, install indoor air purifiers and wear masks when outside. We install dust sucking systems at the traffic junctions to make a noise and show optical proof of “action”! Chinese did that too, but soon realized they should also focus on the economic value or opportunity in reducing air pollution.

While passing the delicious Jamaican coffee in an expensive porcelain mug to Dr Wu, my Friend asked Professor whether the task force set up by the Chief Minister included any investment banker. Professor kept shut and looked outside the window and stared at the grey sky above.

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