28 June 2021
While the terrible coronavirus pandemic has been devastating our country, we have also been grappling with a rapidly warming planet. Cyclones Tauktae and Yaas have wreaked death and destruction on India’s western and eastern coasts. Every year we are confronting more frequent extreme weather events, heat waves, and deadly droughts. In fact, scientists have shown that zoonotic (such as SARS, MERS, and AIDS) viruses are spilling over into us from animals because we are swamping their natural habitats. Nature is sending us a clear warning that we must move to a more sustainable, greener future.
Based on a recent report of the Intergovernmental Panel on Climate Change, global carbon emission must reach net-zero by 2050 to keep warming within 1.5 degrees centigrade by 2100. Unfortunately, the world is spewing so much carbon into the atmosphere that we will warm up the planet by 3 degrees! As a result, along with other major emitters, India is confronting immense pressure to bring carbon emission down to net-zero by mid-century.
While the coronavirus pandemic is a sudden global crisis, climate change is a slow-motion global disaster. It is gradually destroying our planet’s temperate climate and diminishing the lives of our children. To address global climate change, every country must immediately commit itself to a suitable decarbonisation approach, a green development pathway.
Today, India emits about 3.5 billion tons of carbon equivalent emissions per year. India can therefore either adopt an ambitious net-zero approach that gets us to net-zero emission by mid-century, or we can adopt a low-carbon approach that does not lead to net-zero but instead keeps our emission at 3-5 billion tons per year.
The net-zero approach will require committing ourselves to a legally binding net-zero target by a fixed year. Such a target, passed by Parliament, would likely require each ministry and state to define annual carbon budgets leading to net-zero by mid-century. There would be coordinated policies and actions to ensure rapid peaking in carbon emission and a dramatic decline thereafter. The net-zero target would force the Central and state governments to quickly build the necessary state capacity for monitoring and compliance.
A legally binding net-zero target and supportive government policies could lead to massive investments in green technologies and equipment.
India requires at least $100 billion per year in green investments to reach a net-zero target by mid-century.
Electricity generation, transportation, construction, real estate, agriculture, cement, steel, and many other industries will have to be thoroughly transformed. Given the financial constraints facing our Central and state governments, this green transformation will largely have to be driven by private sector capital.
These massive green investments will likely drive fast economic growth and create high-quality jobs. In fact, there may not be any trade-off between development and emission reductions if we are able to attract sufficient global capital. These green investments will require our industries to invest in the most competitive, advanced technologies and business models. They could get us to the Green Frontier — representing long-term, sustainable prosperity — and enable us to stay there.
Diplomatically, a legally binding net-zero target by mid-century could win us enormous global goodwill and lead to much more supportive technology transfer and global trade agreements. More importantly, it will signal to the trillions of dollars of global capital that India is soliciting green investment. A stable government framework and policy predictability are vital to reducing investment risk and attracting global capital.
Rather than this disruptive net-zero approach, we could alternatively follow the low-carbon approach. The Paris Agreement, and all other international negotiations on climate change, recognise the common but differentiated responsibilities of developing countries versus richer countries. Diplomatically, India is not obliged to reduce carbon emission to net-zero by 2050; we could follow a much more gradual glide path. Instead of our carbon emission peaking by 2030 or so, we could peak by 2050 or 2060. Our emission could then get to a stable, low-carbon level by 2080 or even later.
In support of this approach, we could come up with clear sectoral targets — such as the current 450 GW target for solar energy or various building efficiency standards. This would gradually reduce our carbon intensity per unit of GDP. It would also provide a clear sectoral roadmap for the private sector for its investment plans. Importantly, it would allow us to slowly decommission many of our high-carbon sources such as coal-fired power plants and diesel trucks. Our investment requirements would be reduced and we would be able to gradually move people out of high-carbon industries. Overall, this could be a more practical approach than committing to a net-zero target, which may impose high transition costs for our people.
There are two broad development pathways for India: A net-zero approach and a low-carbon approach. Choosing between these two pathways depends on how we assess imminent climate risks, our state capacity, ability to attract green investments and transform our industries, impact on our population, and our strategic global partnerships.
On balance, I favour the net-zero approach over the low-carbon approach. Net-zero technologies, such as solar power and electric vehicles, are likely to be much more efficient. Moreover, the rest of the world might impose high carbon taxes on exports from carbon-emitting countries. Therefore, if we follow the low-carbon approach, we may be disadvantaged relative to our peer economies and face significant export challenges. Instead, by declaring a legally binding net-zero target and building the necessary state capacity, we will spark an entrepreneurial explosion and build a more competitive, sustainable future. To that end, I have introduced a Private Member Climate Change (Net-Zero Carbon) Bill in the 2021 Budget Session. A net-zero approach will surely get us to the Green Frontier.
Jayant Sinha is Chairman of the Standing Committee on Finance in Parliament and a
Lok Sabha MP from Hazaribagh, Jharkhand.