India needs about $10 trillion to meet net zero targets: CEEW

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• To meet its goals of net zero, or being able to effectively eliminate carbon dioxide emissions by 2070, India will need close to $10 trillion according to an analysis by climate and energy research firm, CEEW Centre for Energy Finance (CEEW-CEF).

Major Highlights

• Think tank: CEEW is the Council for Energy, Environment and Water Research, a think tank in New Delhi.
• Utilization of the funds: Most of this money, around $8.4 trillion, would be needed to significantly scale up generation from renewable energy and bring together the necessary integration, distribution and transmission infrastructure.
  • Another $1.5 trillion would have to be invested in the industrial sector for setting up green hydrogen production capacity to advance the sector’s decarbonisation.
    • Green hydrogen is hydrogen gas made from renewable energy and can be used for many things, from heating to powering batteries as well as fuelling vehicles.

• The study estimates that India would fall short by $3.5 trillion to achieve net-zero emissions by 2070 and hence, investment support of $1.4 trillion, in the form of concessional finance, would be required from developed economies to mobilise foreign capital that bridges the gap.
  • Concessional finance refers to loans at below-market interest rates.

India’s goals

• Glasgow summit: At the recently concluded summit in Glasgow, Scotland, Prime Minister announced India’s national goals to significantly improve the proportion of renewable energy in its installed capacity and be net zero by 2070.
• Reaching net zero by 2050 is earth’s best chance: to keep the globe’s average temperature from exceeding 1.5C by the end of the century.
• Near-term and long-term climate targets: At COP26, India announced bold near-term and long-term climate targets.
• Other targets: The commitment of 500GW of renewable energy by 2030, which is more than twice the installed capacity of coal currently, should set the stage for a quick transformation of the energy sector.
• Updated Nationally Determined Contribution (NDC): As per the new NDC, 50% of electricity generation will come from renewable energy sources by 2030 and the target of achieving 450 GW non-fossil energy capacity has been increased to 500 GW by 2030.
  • For the first time, India announced the target of achieving net zero emission by 2070 and that it will reduce carbon emissions by one billion tonnes by 2030. These were not a part of the 2015 NDCs.

Challenges to be faced in future

• Injustice against developing nations: there hasn’t been as much focus on climate adaptation as much as mitigation and that is an injustice against developing nations.
• Environmental shocks: There are changes in cropping patterns; there are floods and a great need to make agriculture resilient to these shocks.
• Global carbon budget: limiting the increase in the world’s average temperature from pre-industrial levels to those agreed in the Paris Agreement requires global cumulative emissions of carbon dioxide to be capped at the global carbon budget.
• The top three emitters of the world: China, the U.S. and the European Union even after taking account of their net zero commitments and their enhanced emission reduction commitments for 2030; will emit more than 500 billion tonnes of carbon dioxide before net zero.
• Non-effective: Neither the Paris Agreement nor climate science requires that net zero be reached individually by countries by 2050.

Steps to be taken for its effective implementation

• Investment support: Analysis finds that a transition to net zero emissions would require mammoth investment support from developed countries.
• Targets for Developed countries to be upped: Developed countries must ramp up hard targets for climate finance over the coming years.
• Domestic front: Also, on the domestic front, financial regulators such as the RBI and SEBI need to create an enabling ecosystem for financing India’s transition to a green economy.
• Investments in existing and emerging clean technologies: Finally, given the size of the investments required, private capital, from both domestic and international institutions, should form the bulk of investment, while public funds should play a catalytic role by de-risking investments in existing and emerging clean technologies.
• Solar power: to achieve net zero by 2070, India’s total installed solar power capacity would need to increase to 5,630 GW by 2070.
  • The usage of coal, especially for power generation, would need to peak by 2040 and drop by 99% between 2040 and 2060.
• Crude oil consumption: Crude oil consumption across sectors would need to peak by 2050 and fall substantially by 90% between 2050 and 2070. Green hydrogen could contribute 19% of the total energy needs of the industrial sector.
• Change in lifestyles: If we cannot fix how we live, we cannot fix the planet on which we live.
• Lessons from India: sustainable modes of living being practised in certain traditional communities ought to be made part of school curricula and the lessons from India’s efforts at adaptation in programmes such as Jal Jeevan mission, Swachh Bharat mission and mission ujwala ought to be popularized globally.

Source: TH