Towards net zero

India's 2030 climate targets more relevant than 2070

Prime Minister Narendra Modi, speaking at the Glasgow meeting of the United Nations Framework Convention on Climate Change Conference of Parties (COP26), surprised the world by announcing a “net zero” target for India. The target is far in the future, as Mr Modi committed India to carbon neutrality by 2070, two decades after the European Union and the United States and a decade after the People’s Republic of China. Yet this is not surprising, as India has a harder path to traverse if it is to balance its growth needs with the decarbonisation of the economy. Mr Modi did not make clear what had led him to reverse the unwillingness expressed by senior Indian officials in the recent past about such a target, but it is another sign that the Indian government is unwilling to be seen globally as a hurdle to a broader agreement on action against climate change.

It is not clear what such a distant target, predicated as it is on undeveloped technologies —such as for carbon capture and storage at scale — means for the immediate growth trajectory of India. More imperative is to analyse the prime minister’s scaling up of the 2030 targets for the Indian economy. He announced at COP26 that the proportion of renewable energy in the country’s electricity mix would be 50 per cent. That is up from the current target of 40 per cent. He also said the carbon intensity of India’s gross domestic product would decline further than previously promised. The 50 per cent target for renewables is not all that it seems; the share of renewables in installed capacity tends to be larger than its share in generation, as thermal power plants that have a constant supply of fossil fuels are more reliable than current renewable sources, and take the lion’s share of the base load. The renewable energy sector in India had many years of excellent growth since the Paris Agreement in 2015, but it is also a fact that there are growing problems of scale that it is facing — from increasing storage capacity to ensuring that state discoms honour their agreements, to managing grid integration on favourable terms. Higher expectations for future capacity in the sector will have to be matched with greater efforts at reforming the broader power sector in co-operation with state governments. Since most of the investment in this scale-up will have to come from private capital, the investment protection regime in the sector will also have to be re-examined.

Mr Modi was right to highlight the fact that India’s green transition would depend crucially on the global regimes governing investment and technology. India’s achievement of targets, whether those for 2030 or for 2070, will be subject to major changes that enable the greater flow of capital, including global private capital, into the sectors that drive the transition, such as renewable power, but also electric vehicles and energy efficiency in industries. It will also depend upon access to the technology that will enable these sectoral changes — such as green hydrogen, perhaps, for steel-making. It is now generally understood that these changes can be wrought on an international scale only through the mobilisation of private investment. Yet governments and multilateral organisations still have a role in ensuring that this investment flows from the global north to the south, and into the relevant sectors. This must be the focus of India’s climate diplomacy, now that the pledges have been made.