India can accelerate decarbonization at scale while pursuing economic growth.
At COP26, India committed to becoming a net-zero emitter by 2070, marking a significant step in addressing climate change. Despite having low per-capita emissions (1.8 tons CO2), India is the third-largest emitter globally, releasing 2.9 gigatons of carbon dioxide equivalent (GtCO2e) annually as of 2019.
The main contributors to these emissions (about 70%) come from six key sectors:
India has to speed up its shift to a low-carbon economy, lower emissions, and support sustainable growth. The impact will extend across multiple sectors, helping India achieve its climate goals while driving innovation and economic progress focusing on these efforts.
The following areas highlight key opportunities that can accelerate decarbonization across various industries:
Green hydrogen can serve as a clean energy carrier and is vital for sectors like heavy industry and transport, where direct electrification is difficult.
CCUS technologies can capture CO2 emissions from industrial processes and power generation and either use or store them, preventing them from entering the atmosphere.
Solutions like reforestation, soil carbon sequestration, and sustainable agriculture practices absorb CO2 and enhance carbon storage in natural systems.
Moving toward a circular economy, including recycling, reusing, and repurposing materials, to reduce waste, resource extraction, and emissions from manufacturing.
India's net-zero journey has been shaped along two distinct scenarios:
This scenario reflects the outcomes based on current (and announced) policies and foreseeable technology adoption. In this scenario, India could reduce annual emissions from 11.8 GtCO2e to 1.9 GtCO2e by 2070, representing a 90% reduction in economic emissions intensity compared to 2019 levels.
This scenario reflects a more ambitious approach with far-reaching policies such as carbon pricing and accelerated technology adoption. With enhanced policies and technologies, India could reduce emissions to 0.4 GtCO2e by 2050, paving the way for achieving net-zero emissions by 2070. This would require breakthroughs like direct air capture technologies over the next few decades.
Despite India's ambitious goals, the pace of emissions intensity reduction is not enough to meet future targets given the country's expected growth. India needs substantial efforts to accelerate its decarbonization process.
India has the potential to create 287 gigatons of carbon space for the world, nearly half of the global carbon budget required to limit warming to 1.5°C. This underscores the significant role India can play in global decarbonization efforts. However, there are critical challenges and opportunities for India to realize this potential.
India must prepare for orderly and accelerated decarbonization methods within the current decade to meet its climate goals. With over three-fourths of India's infrastructure for 2050 yet to be built, this presents a significant opportunity for India to grow sustainably and lead the way in green industries.
India's infrastructure growth will drive massive demand across several key sectors:
By setting up the right policy this decade, India can build low-carbon capacities in the upcoming decades.
Example: Implementing a carbon price of $50 per Mt by 2030 would make green steel competitive, shifting 211 Mt of steel production to low-carbon hydrogen routes instead of traditional coal methods by 2045.
To ensure India remains on track to meet its ambitious climate commitments and economic growth, accelerating the adoption of green technologies and progressive policies is critical. If India succeeds in implementing these changes, it can significantly contribute to global decarbonization while fostering economic growth and job creation in green industries.
India's transition from fossil fuels to clean energy offers substantial benefits:
Today, fossil fuels comprise 75% of India's commercial energy mix. However, by 2050:
By 2050, in an accelerated scenario, over 60% of India's refining capacity, 90% of coal mining, and 100% of coal-based power generation may become unnecessary. India's tax revenue from auto fuels could decrease from $85 billion today to $36 billion as the transportation sector shifts to electric vehicles. Additionally, resources like biomass, currently used for cooking, may need to be redirected to more difficult-to-decarbonize sectors, such as cement production, as part of the transition.
In the accelerated decarbonization scenario, India may require 45 million more hectares of land than is currently available:
To meet these demands, innovative techniques will be essential, such as:
By 2040, the impact of decarbonization on household spending is expected to be moderate. Housing costs may increase, but these could be balanced by:
Accelerated decarbonisation could result in the transformation of over 30 million jobs by 2050:
Specific regions, like coal mining, could be more heavily impacted (e.g., Eastern India), requiring support, re-skilling programs, and the development of alternative industries in these areas.
Implementing decarbonization policies poorly or too quickly will have economic impact and disadvantages that will affect the populations with greater adverse impacts. This could result in increased financial strain for certain households.
India will need an estimated $7.2 trillion in green investments by 2050 for the LoS scenario (current policies and technology). The accelerated scenario would require an additional $4.9 trillion, totalling $12.1 trillion.
50% of the required investment for decarbonization is already in the money, particularly in:
Other sectors will require additional government policy support to ensure sufficient investment.
A significant portion of the required funds will be front-loaded, particularly in the earlier decades (2030-40):
All stakeholders must come together and take action now. The government can help by offering policy support and incentives, such as tax breaks for electric vehicles (EVs) and fuel-cell EVs. The government can also simplify rules for building new power and grid infrastructure, encourage the use of more expensive green materials like eco-friendly steel, and support the development of technologies like electrolyzers. Additionally, it's important to make sure that this transition is fair, especially for low-income households, to prevent energy shortages and rising prices.
For India to make progress, both the public and private sectors need to invest in new technologies. Business leaders and policymakers must be open to adopting innovations such as long-duration storage to better use renewable energy, improve fuel cell technologies, and advance recycling techniques. These breakthroughs will be crucial for achieving decarbonization goals in the country.
India has immense potential to decarbonize, but reaching net-zero emissions by 2070 will require bold actions and coordinated efforts across various sectors. By focusing on developing low-carbon infrastructure and promoting clean energy adoption, India can not only meet its own emissions reduction goals but also play a key role in global climate action. The next decade is crucial for laying the foundation for a sustainable, low-carbon future, positioning India as a leader in green technologies and climate solutions.
Successfully transitioning to a low-carbon economy will require strategic planning, substantial investments, and strong policies. Challenges such as land availability, household spending, and job shifts must be addressed with innovative solutions. While the investment required is significant, many areas—such as renewable energy, electric vehicles, and agriculture—already present viable funding opportunities. With the right approach, India can unlock its potential for sustainable growth and lead the way in green industries, benefiting both its people and the global climate.
India must take careful steps now to prepare for a smooth and fast transition to a low-carbon future. Focusing beyond the short-term goals and building the necessary foundations over the next decade is crucial for achieving a decarbonized India and a sustainable world.
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