 "pollution, climate change")
McKinsey recently released a report that presents an insight into opportunities and mechanisms to decarbonise six polluting sectors that contribute to around 70 per cent of India’s overall emissions — power, steel, transportation, cement, aviation and agriculture. The report titled, "Decarbonising India: Charting a pathway for sustainable growth", propose more than 100 decarbonisation levers across these key sectors and takes a deeper look at four cross-cutting decarbonisation opportunities: green hydrogen; carbon capture, usage, and storage (CCUS); natural climate solutions; and material circularity.
"We modeled outcomes on India’s net-zero journey along two scenarios: first, the current line-of-sight (LoS) scenario with current (and announced) policies and foreseeable technology adoption; and second, the accelerated scenario with far-reaching polices like carbon pricing and accelerated technology adoption, including technologies like CCUS. Our analysis shows that the benefits of a well-planned, orderly, accelerated transition could outweigh the downsides, given India’s growth outlook." The report said.
India announced its ambition to become a net-zero emitter by 2070 at COP26—an important milestone in the fight against climate change. The report highlights that, despite low per-capita emissions (1.8 tons CO2), India is the third-largest emitter globally, emitting a net 2.9 gigatons of carbon-dioxide equivalent (GtCO2e) every year as of 2019. The bulk of these emissions (about 70 per cent) are driven by six sectors: power, steel, automotive, aviation, cement, and agriculture.
McKinsey in its latest not only gives a detailed review for India's current situation but also lists following ten actions India may consider to accelerate its decarbonisation effort:
- Lay out a detailed medium-term decarbonisation plan with sector-specific priorities and policy frameworks that account for interdependencies across sectors and provide demand signals to guide corporates to invest.
- Accelerate implementation of a compliance carbon market (within three years). This would also require the creation of demand signals, especially in hard-to-abate sectors, and incentives linked to investments in newer technologies like CCUS.
- Enable banks to support the transition, catalyzed by a green-transition bank. Banks could be asked to come up with their investment glide paths within one to two years and build the necessary capability for assessing risks in these new spaces.
- Accelerate renewable adoption in the power sector to scale up capacity addition by four times and to deepen market reforms with a 30-year outlook in a manner that ensures a stable grid fed predominantly by infirm power.
- Empower a nodal authority to define a national land-use plan. Lay clear land-use guidelines for optimized use across urbanization, industrial needs, carbon sinks, agriculture, and renewables.
- Create a resilient indigenous manufacturing capability and increase investment in cleantech R&D. Efforts would be needed to develop local raw-material resources (such as rare earths), secure materials from elsewhere in the world, and produce equipment locally through mechanisms like production-linked incentive (PLI).
- Evaluate five carbon capture and storage hubs in Gujarat (Jamnagar), Odisha (Paradeep), Rajasthan (Barmer), Maharashtra (Pune), and Andhra Pradesh (Vizag) potentially in public–private partnership for utilization and storage of captured carbon.
- Create a national circularity mission with recycling hubs in the top 20 Indian cities (contributing 35 percent of municipal solid waste), mandated targets on recycling rates, recycled raw-material use (for example, blending norms), and landfill levies.
- Enhance the National Hydrogen Mission with government playing a key role in accelerating demand through blending mandates, boosting cost competitiveness via capital subsidies and R&D investments, and enabling export opportunities via international trade agreements.
- Empower companies to play on the front foot, evaluating investment opportunities that this green trend will unlock, aligned with India’s national plans or opportunities opened up by decarbonisation of other countries (for example, green-hydrogen derivative exports).
The report emphasizes the need for India to take thoughtful actions now to set itself up for an accelerated and orderly transition. "Looking beyond the short term and laying the foundation for this transformation within this next decade is the imperative for a decarbonised India and world." The report read.
