Is it wise for India to lead the Energy Transition agenda?
Is it wise for India to lead the Energy Transition agenda?
New Delhi: COP26 in Glasgow saw India’s Hon’ble Prime Minister makea bold announcement that India will become Net Zero by 2070. Rankedas the third highest emitter of GHGs, transitioning to becoming a greeneconomy is going to be a tall ask, but as we have been witnessing, thecountry and its citizens are up for the challenge. Many progressive andaggressive policy changes have been brought about to lower the carbonfootprint, especially in the six highest polluting sectors of power,automotive, aviation, steel, cement, and agriculture.
According to the United Nations Environment Programme (UNEP), agreen economy is a low-carbon, resource-efficient and socially inclusiveeconomy. In these economies, growth in employment and income isdriven by public and private investment into economic activities,infrastructure and assets that reduce carbon emissions and pollution,enhance energy, and resource efficiency, and lower the risk of loss ofbiodiversity and ecosystem. In short, if India is looking to become agreen economy, its future economic and sustainable growth need towalk together.
For India’s decarbonization efforts to accelerate, a significant amount ofinvestment from both the public and private sectors will be needed.These funds can be used for the research and development of rawmaterials, implementation of cleantech and import or development oftechnology and equipment from overseas through affordable climatefinancing methods like Production Linked Incentive (PLI) schemes.According to a report by the parliamentary panel on finance, India needsan additional annual investment of up to $100 billion to meet its 2070net-zero carbon emissions goal, with the private sector needing todouble its existing CapEx, despite already investing $65 billion-$100billion to lower carbon emissions. When it comes to investing ininnovation and state-of-the-art technologies, internationalcollaborations are critical, especially for the modernization of thenational transmission grid. To handle the switch from traditional thermalpower to the increasing levels of renewable energy, investments areneeded for the expansion and modernization of the grid, and to improvethe reliability and efficiency of transmission lines. Also, when it comes tobuildings and infrastructure, all existing (if possible) and future buildingsneed to be made more environment-friendly, keeping sustainability atthe core of their value chain.
The question then begs itself, given the significant costs involved, does itstill make sense to sacrifice and divert investments from economicgrowth towards sustainable growth? Despite the lukewarm response ofother member nations of COP, is it feasible for India to lead the chargeand continue along its green transition journey? Or, do we followcountries like China, the US, the UK and other rich developed nationswho are economic heavyweights because they used what was availableto them in abundance - fossil fuels. Some schools of thought say thatIndia should continue to play to its strengths and focus on becoming aneconomic superpower instead of trying to achieve its net zero targets,which will require a huge amount of investment and access totechnologies that it doesn’t have at the moment.However, it is important to take note that India’s transition towardsbecoming a green economy started almost a decade ago and is wellunderway. Along with a few Scandinavian countries, India is one of thefew countries acting on its promises to reduce its carbon footprint.According to a UNEP report published in 2022, India's per capitagreenhouse gas emissions stood at 2.4 tCO2e (tonne carbon dioxideequivalent), well below the world average of 6.3 tCO2e. The US, RussianFederation and China being among the top greenhouse gas emittersstood at 14, 13 and 9.7 tCO2e respectively. Therefore, given the amountof investment needed, should India take it upon itself to pick up the slackfor all the other countries and bear the burden?
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