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The Rediff Business Interview /Kathleen A McGinty

'There's a no-cost opportunity to make projects eco-friendly. India must seize it'

Kathleen A McGinty, a senior American consultant and researcher, is in India for a project on infrastructure partnerships between the US and Indian companies. Her mission is to introduce the business community to the concept of clean infrastructure investments. She calls it Clean Development Mechanism which is apparently included in environmental treaties. Shobha Warrier learnt more about McGinty's efforts when she was in Madras recently to take part in Dynamic South summit.

What is Clean Development Mechanism?

It comes out of something called the 'Climate Change Treaty' that the nations of the world including India agreed to in 1997. The basic principle is that companies in the United States, Europe and Japan are required to reduce their pollution to become more efficient. But the treaty gives them a choice; they can put up clean infrastructure in the US, Europe or Japan or they can invest in clean infrastructure for power, water, roads in countries like India, China or Mexico.

Basically, it is cheaper to invest in India, China or Mexico. So, it is a win-win situation for the US businesses and for the Indian economy.

You must have interacted with a lot of US investors. Any interesting observations about their concerns?

I think there are some encouraging signs. We see corporations like Enron, for example, moving ahead with their deals and becoming quite successful. We also see some power deals being finalised and moving ahead. That India excels in information technology is very encouraging to the US businesses because business needs information infrastructure as much as roads, water and other infrastructure.

According to a university survey of 53 countries, India tops in infotech but is at the bottom infrastructure-wise.

Quite interesting. But if you look at some of the industries of the present and the future, the good news for the most promising industries is that they are not dependent and reliant on some of those traditional forms of infrastructure. Information infrastructure becomes more important in some respects than transport and water and those kinds of infrastructure. Still these sectors can survive and thrive even as India improves its space infrastructure.

How can environment friendly infrastructure be developed?

If it is in the power sector, you can see a partnership between a US company and an Indian company put in place more generating capability. For example, it can be based on hydro- electric potential or even coal fire generation. And if it uses the new technology very efficiently rather than the traditional coal fire power generation, the clean development mechanism can help.

Do you expect more and more developing countries following "green" development programmes?

This is a new opportunity. But it is so much in India's economic as well as environmental interests to seize this opportunity. We are keen on working with people in India so that they see the new possibility and its potential.

Can a developing country afford the technical knowhow?

One of the most attractive features of the Clean Development Mechanism is that the technology or the capital or the technical assistance would come free of charge to the Indian government or the Indian company that might be involved.

What the US or the EU or the Japanese company would get in return is not money. What they would get in return is credit for having reduced pollution in India. So, it is a whole new source of capital that is not based on rupees or dollars, it is based on an exchange of credit for having reduced pollution. I hope to spread information about this facility in India.

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