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COP26 Summit: Economic Implications of India's emission-reduction targets

At the COP26, PM Narendra Modi set forth a five-pronged target for India and its commitment to Net-Zero emissions by 2070. What does this mean for the Indian economy and what will be the challenges?

Topics
Climate Change | Climate Change talks  | COP

Bhaswar Kumar  |  New Delhi 

PM Modi at COP26
PM Narendra Modi speaking at COP26 Summit | Photo: ANI

At the COP26 climate summit on Monday, Prime Minister Narendra Modi announced 2070 as the target for India to reach net zero carbon emissions. India’s announcement came as a surprise to delegates at the climate talks in Glasgow, as it had rejected calls to announce such a target only last week. Environment secretary RP Gupta had argued that it was more important for the world to lay out a pathway to reduce emissions than just achieving carbon neutrality. A net-zero target refers to the date by which point a country will only emit carbon dioxide or other greenhouse gases that can be absorbed by forests, crops, soil and developing technologies like carbon capture technology. OTHERS’ NET-ZERO TARGETS 2050: US, UK, Japan, EU 2060: Saudi Arabia, China, Russia 2070: India Rich nations like the US, UK and Japan as well as the European Union went for a 2050 goal, whereas China, Saudi Arabia and Russia have set targets of 2060. But as a developing country, it is more difficult for India to do away with fossil fuels like coal. TOP GREENHOUSE GAS EMITTERS

  1. China
  2. United States
  3. India
  4. Russia
As the world’s third-biggest emitter of greenhouse gases – next only to China and the US – India is also among the countries most vulnerable to the effects of climate change. According to the Global Climate Risk Index 2021 published by the think-tank GermanWatch, India is the seventh-most affected country by extreme weather events. India’s goal of achieving net-zero emissions by 2070 may seem far-fetched. To support this goal, Prime Minister Modi made four other aggressive pledges, all of them to be achieved by 2030. INDIA’S SHORTER-TERM TARGETS FOR 2030
  1. 50% of power to come from renewables
  2. Reach 500 GW of installed renewable energy capacity
  3. Reduce carbon intensity by 45%
  4. Reduce projected total carbon emissions by 1 billion tonnes
The Prime Minister said that in another nine years, India would increase the share of renewables in its energy mix to 50% from about 38% last year. He also raised the target for installed capacity of renewable energy to 500 GW by 2030 from the previous 450 GW goal. India’s current renewable energy capacity stands at 175 GW. India will also reduce the carbon intensity of its economy by 45% from 2005 levels, up from the previous commitment of 33-35%.

Emissions intensity refers to the volume of emissions per unit of GDP. And finally, the Prime Minister said India would reduce its projected total carbon emissions by 1 billion tonnes by the end of the decade. India emitted 2.62 billion tonnes of CO2 in 2019 and it is projected to reach 4.5 billion tonnes in 2030. Given this context, India’s target is quite considerable. According to Rahul Tongia, Senior Fellow, CSEP:

  • Short-term ambitions more interesting than 2070 net-zero goal
  • 500GW of RE by 2030 not entirely new, but it’s ambitious
  • India to add 300-350GW in 9 years
  • Managing RE to be a challenge, viable storage technologies required
  • To cut carbon intensity by 45%, India should go beyond power sector
  • This may drive clean industrial processes
However, in order for India to achieve its ambitious targets, it will have to make substantial changes to its coal-reliant power sector. According to BloombergNEF data, more than 70% of India’s electricity came from coal power plants last year. India still has to frame a comprehensive plan for the 40 years from 2030 to deliver on its goal of carbon neutrality. But what underpins the progress on this issue is money.
  • Wealthy countries should contribute $1 trillion in climate finance
  • A promised $100 billion in annual climate finance promised in 2009 yet to come
  • In 2018, India had said it would need $2.5 trillion to achieve its 2030 target
PM Modi called on the wealthy countries to contribute $1 trillion in climate finance to developing economies. This, even as a promised $100 billion in annual climate finance is yet to be delivered after developed countries promised in 2009. Consider that in 2018, the government said India would need $2.5 trillion to achieve its 2030 climate change targets under the Nationally Determined Contributions or NDCs agreed at the Paris Climate Accords. According to Chirag Gajjar, head Subnational Climate Action, WRI India:
  • Climate finance to play key role in achieving goals
  • MSME sector needs greater access to resources
  • Climate finance should flow from developed to developing countries
  • India asked for $2.5 trillion to meet first NDC goals
  • Updated NDC goals to need more money
Time alone will tell whether India will succeed with its ambitious targets or not. For now, however, it clear that India has taken on more than its fair share when it comes to combating climate change.

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First Published: Wed, November 03 2021. 08:15 IST

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