Net-Zero Vow for India
“By 2070 India will achieve the target of net-zero emissions.” Prime Minister Narendra Modi made a strong commitment during the Cop26 Global Climate Summit. India currently is the world’s third-biggest emitter of greenhouse gases after China that announced a net-zero target for 2060 and the United States, with a large historical emission, claiming to decarbonize by 2035.
This signal of climate action, if implemented properly, could yield great results to abate global warming. But first, we need to understand what exactly does it mean to be net-zero? It means to achieve a balance between the greenhouse gases put into the atmosphere and those taken out. In simpler terms cutting down the carbon, we produce. These greenhouse gases could be removed via nature, as trees absorb carbon dioxide from the atmosphere, or through new technology or changing industrial processes.
During the summit, 5 pivotal points were presented by the Prime Minister to fight against this challenge. Associating them with the ‘Gift of 5 Elixirs’; the pledge included increasing its non-fossil energy capacity to 500GW by 2030 as well as enabling 50% of the power generated due to the usage of renewable energy. Moreover, reducing the projected carbon emissions by 1bn tonnes and the carbon intensity by 45% between now and 2030.
At present, the Indian economy is heavily conditioned on coal, compounding up to 6.8% of the total global emissions. The average carbon footprint of every person is estimated at 0.56 tones per year, food and electricity being the two routes of expenditure that account for it. The country has already experienced its worst power crisis due to fuel shortages despite holding the world's fourth-largest coal reserves. The spike in inflation, fall in trade revenue, and huge infrastructural change would require our country to redouble its efforts. Also, the growing energy demands can result in huge economic loss due to shifts in investment patterns across sectors needed to achieve the peaking and net-zero targets.
To bring significant changes, India would need to set up its game by weeding out its coal usage, fossil fuel use in primary energy would have to decline. Also, a switch towards zero-carbon fuels could bring forward a way for technologies efficient in hydrogen and solar energy production. Some researchers also suggest adding carbon pricing, a tax on goods and services on carbon emission.
Peeking at the business dynamic, the increasing regulatory and disclosure requirement is empowering customers as well as investors to focus on sustainability. A soaring number of companies like Reliance Industries (RIL), Tata Consultancy Services, Wipro, ITC, and other 64 Indian companies have pledged to reduce greenhouse gas (GHG) emissions towards their net-zero ambition. Their journey in reaching the carbon-neutral state will reshape the flow of money directed toward companies that are providing ‘green solutions’ to society’s needs. It would also facilitate expanding technological operations, forming strategic alliances, and identifying new market entry points, creating strong environmental policies towards affluence and welfare.
This particular transitional move has painted a bumpy road ahead in figuring out how to finance a multi-dollar investment. In his remarks during the meeting, Modi said, “It is India’s expectation that the world’s developed nations make $1 trillion available as climate finance as soon as possible”. Emphasizing the much-needed funding he appealed to rich countries to help support poor nations by raising more money to whisk the shift towards renewable energy.
Since we are already on the front line of an economic crisis due to a pandemic, obtaining a balance between economic growth and the environment seems like a bold promise coming from a developing country. But the extreme climate changes are something India will have to deal with inevitably.
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