Imagining a climate-resilient economy

Should India commit to eliminating greenhouse gas (GHG) emissions by a certain date in future (net zero)? This is an important but a partial question. The question we should be asking is: How can India’s climate policy help transform the economy to be more resilient and competitive in a climate changed world?

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It is not the pressure of international negotiations but the imperative of economic transformation that matters more for India. Will India make steel in 2050? Yes. Will steel manufacturing look the same then as now? Very unlikely. Will India make cars in 2040? Yes. Will it be able to export petrol cars then? Almost certainly not. Will India face carbon-related trade barriers in 2030? Very possible. Every major economic sector now faces a choice: Pursue brown growth and short-term competitiveness, or low-carbon growth, green jobs and long-term resilience?

Read More: Don’t forget air pollution

India must build its international climate narrative against that core objective and around four themes: Planetary impact; equitable differentiation; upgraded nationally determined contributions (NDCs); and contingent commitments.

First, rather than be defensive, India should speak for the planet. What matters is atmospheric concentration of greenhouse gases (GHGs). CO2, once emitted, stays in the atmosphere for a long time, so historical and future emissions matter.

In 2007, India pledged that its per capita emissions would never exceed that of developed countries. As a genuine custodian of the planet, India should now commit that its per capita as well as its cumulative emissions (1901-2100) would never exceed that of China, the European Union or the United States. In fact, if India’s emissions peak in 2040 and the country aims for net zero emissions by 2070, then even its future emissions would be lower than that of China or the US. This is why it is critical that India adopts a peaking year as well as set the direction of travel towards net zero.

Second, India should demand that developed countries advance their net zero commitments. Leaving aside economies in transition (post-Soviet countries), which witnessed a drop in emissions thanks to economic collapse, developed countries reduced emissions by only 1.6% during 1990-2018. The record of the past 30 years offers little by way of confidence in their promises for the next 30 years.

Whereas the Intergovernmental Panel on Climate Change argues that the world should aim for net zero emissions by 2050, the same cannot apply to all countries. No race is won by all participants reaching the finishing line at the same time. Climate justice would dictate that the largest cumulative emitters achieve net zero before 2050, giving smaller and poorer developing countries additional years of carbon space to aim for net zero after 2050. This approach would also put a premium on near-term actions in developed countries.

Third, India should translate its domestic pronouncements into policy and its domestic policies into upgraded NDC submitted to the UN Framework Convention on Climate Change. In September 2019, Prime Minister Narendra Modi first talked about India aiming for 450 gigawatts of renewable energy. Later, the target year was set as 2030. However, this target is not enshrined in law or policy. Similarly, there have been announcements that 30% of vehicles sold in 2030 would be electric. While laudable, there is no policy to back this up.

Such ambitions must be enshrined in policy to send credible signals to the market. Moreover, India should translate these targets into emissions intensity reduction commitments. If India managed 450GW of renewables by 2030, it would mean 54% reduction in emissions intensity against 2005 levels (far above the 33-35% reduction India has promised).

Fourth, India should propose contingent commitments, wherein its target year for net zero emissions would be contingent on technological progress and availability of investment. A recent analysis from CEEW showed that for India to peak emissions in 2030 and achieve net zero emissions by 2050 would be unprecedented. Developed countries are giving themselves more than 40 years, and up to 77 years, for their transition.

India should not declare 2050 as net zero but a year in the future. But it should make the commitment contingent, which would give certainty (for net zero), credibility (by declaring a peaking year sooner than later) and flexibility (by reviewing and revising decisions based on market developments).

India needs hundreds of billions of dollars for investment in renewables, e-mobility, industrial energy efficiency and shutting down dirtier power plants. These investments would have net benefits in terms of avoided costs of pollution and damages from climate crisis. But available capital is insufficient and expensive. India should propose a green finance platform to deepen financial markets at home but demand that public money be used to de-risk international institutional investment.

Equally, India must stop waiting for technology handouts and instead co-develop disruptive technologies such as green hydrogen, advanced biofuels and carbon capture and sequestration. Significant R&D investment will be needed. India should propose multi-country tech development platforms with targeted goals for price reduction and deployment at scale.

Our approach to climate negotiations should create opportunities for an economic transformation, not just an energy transition. For sustainability to shift from the margins of environmental negotiations to the mainstream of political discourse, we must reimagine our economy of the future.

Imagining a climate-resilient economy

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