Can India strike a balance between wealth and sustainability? The stakes couldn't be higher
As early as 1972, the wealthy observed doubts about our persistent poverty, while simultaneously warning us of our own methods, on the United Nations' first global environmental conference in Stockholm. She concluded, "We do not want to conquer the environment further, but we cannot forget the great poverty of many people."
Her words resonate now more than ever as the global debate centers around addressing the climate crisis and its impact on economic growth.
At the COP28 Climate Summit's opening ceremony in Dubai, Indian Prime Minister Narendra Modi emphasized the need for poor countries to receive a fair share of the global carbon budget, thus enabling CO2 emissions up to the amount that causes a planetary temperature rise leading to a climatic catastrophe, protective of which remains necessary to avoid a climate disaster.
The United Nations noted this year that, despite ongoing warming, many governments worldwide still rely on coal, oil, and gas for economic development, energy security, and geopolitical power.
As a result, global fossil fuel production is projected to rise more than double by 2030, in excess of what's necessary to curb a 1.5°C global temperature rise under the Paris Agreement's objectives.
Even as the world's most populous nation clings to coal, there are signs of an attempt to shift towards sustainability.
According to a United Nations Environment Programme (UNEP) report, India has made significant investments and ambitious goals in renewable energy, affirming that the world's fastest growing large economy set aside money for the energy transition in its annual budget – more than 4 billion US dollars.
Other international bodies have acknowledged India's growing ambitions in seeking sustainable energy. The Paris-based International Energy Agency (IEA) said in an October report that India was entering a "dynamic new phase in energy development, characterized by a long-term net-zero emission goal."
Prime Minister Narendra Modi promised in 2021 that India would achieve net-zero emissions by 2070, which, while still far behind developed economies, remains a promising goal.
As with any major transformation in India, the shift towards clean energy is likely to be chaotic and unpredictable, with profound consequences for global energy markets and the global race to limit climate change.
"India's goal of reaching net-zero emissions by 2070 would, if achieved in conjunction with other corresponding national targets, lead to an increase in global average temperature by 1.7°C by 2100," said Siddharth Singh, analyst for energy investment at the IEA.
Reaching this goal need not rely on economic sacrifice. "There are initial signs of a loosening of the correlation between economic development and CO2 emissions," Singh noted.
The IEA claimed in the report that if India can adhere to its commitments, its carbon emissions will decrease by more than 40% by 2050, even as its GDP quadruples in that timeframe.
Modern India is yet to be built
According to the International Energy Agency, India is the third largest energy consumer worldwide, despite its energy consumption and per-capita emissions accounting for less than half of the global average.
This could soon change. Energy demand has doubled since 2000 due to rising incomes, with 80% still being met by coal, oil, and solid biomass. India is projected to record the world's greatest growth in energy demand over the next three decades.
This impressive achievement is hardly a surprise, as analysts expect India's fifth-largest economy to grow comfortably at a rate of at least 6% per year in the coming years, making it potentially the third-largest economy with a $10 trillion annual GDP by 2035.
With growth and modernization, urban population will explode, resulting in a massive increase in residential, commercial, retail, and other construction developments.
"India's urban population will grow by the equivalent of London's population each year for the next 30 years," Singh noted.
The Modi government has also sought to boost domestic production, which has triggered a construction boom and launched numerous infrastructure projects ranging from roads and bridges to ports and railways.
This infrastructure boom will lead to increased demand for coal and steel, significant CO2 emission sources.
Electricity demand is also projected to grow strongly in the coming years due to factors like rising living standards and climate change, resulting in a significant increase in the demand for air conditioning units.
According to the IEA, by 2050, the electricity demand for air conditioning in India will exceed the total energy consumption of present-day Africa.
Coal makes up almost 70% of the electricity generation in India and is likely to remain a significant share in the near future.
The expected role of fossil fuels is one of the most contentious issues discussed at the COP28. While some advocate for an exit, others demand a watered-down version of the exit.
India maintains it is currently unrealistic to exit fossil fuels, as it lacks nuclear power and energy storage capabilities. "We cannot abandon fossil fuels as long as we do not have atomic energy or viable energy storage options," said India's energy minister R.K. Singh, even though he acknowledged that India had no immediate plans to decrease its reliance on coal.
"We will not do it ... We will not compromise on electricity supply needed for the economy to grow, even if we need to expand coal generation capacity," Singh said in November.
Ambitious Green Goals
The fact that India is at this stage in its history affords a unique opportunity to avoid replicating the green sins of wealthy countries.
India was a "reluctant signatory" to the Paris Climate Agreement in 2015, with more than 190 countries committing to limiting the strengthening of global temperatures significantly below 2°C above pre-industrial levels, with an aspiration toward 1.5°C.
These commitments still need to be fulfilled. The United Nations warned that, even with current climate policies, the world will still confront a global temperature rise of nearly 3°C.
The Modi government has set ambitious goals. It promises that renewable energy will account for 50% of India's energy needs by the end of this decade, and plans to generate 500 GW of power from non-fossil fuel sources by the same time, up from around 173 GW in the previous year.
India has introduced incentive programs to foster local production in key industries such as solar modules and advanced chemicals. If successful, India could become a reliable exporter of solar panels, IEA noted in its 2023 report.
"India is already 4th in the world in terms of installed wind and photovoltaic capacity, and will rank 3rd by next year," said Singh. "India's green energy ambitions in the sphere of clean energy are indeed very impressive."
If Asia's third-largest economy manages to deliver on its promises, it will unveil a new growth plan that will allow the world's poorest countries to become wealthy and green simultaneously.
Green Billionaire
Large corporations recognize green opportunities.
India's wealthiest men, including Mukesh Ambani and Gautam Adani, invest billions in clean energy, despite building their empires on fossil fuels.
"Now is probably the best time for India to achieve sustainable growth," said Tim Buckley, director of climate energy finance at a Sydney-based think tank.
The benefits of that are at least twicefold, explained Buckley: following the Russian invasion in Ukraine, the world has invested in clean technologies to an unprecedented extent, and solar energy has become much more affordable.
However, the funding gap remains significant. According to the International Energy Agency, India's energy investments will need to almost triple by the end of the decade to meet its net-zero emissions goal. The Modi government aspires for rich countries to contribute more to climate finance.
Developed nations made commitments more than a decade ago to annually contribute at least $100 billion to developing countries to aid in their transition to clean energy and adaptation to climate change. However, this pledge has never been met.
In his address at the opening ceremony of the COP28 parties on Friday, Modi warned that "merely thinking about one's own interests will only lead the world into darkness."
Let's hope India's vast bureaucracy will also heed the message.
"We simply need more sector-specific measures and a sense of urgency to make Modi's ambitious green energy goals a reality," said Buckley. "India must ensure coordination to meet its truly ambitious targets."
