Thursday, November 14, 2024

How India can achieve its net-zero emissions goal

Sunday, April 4, 2021, 19:04
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A net-zero target must be preceded by peaking of emissions. Industrialised countries that have pledged to achieve net-zero by 2050 peaked their emissions in the 1990s-early 2000s. India is likely to peak around 2040. So why push India to announce net-zero within a decade of peaking when industrialised countries have had at least 50 years?For a global net-zero by 2050, individual countries must achieve net-zero emissions around the same time. Industrialised countries have to become net-zero around 2040. Countries like India can aspire for a net-zero status around the late 2060s. Conceptually, no country should have any objection to peaking and net-zero. The traditional argument made is that among the G20 countries, India has the lowest GDP per capita, low final energy consumption per capita, lowest power consumption per capita and lowest greenhouse gas (GHG) emissions per capita, and that it will meet and exceed its climate commitments. The merits of this position notwithstanding, the world must move to a positive discussion focusing on the solution space. Five aspects of the solution space must be considered. First, acknowledging that climate action needs financing. India puts in about $100 billion each year for climate adaptation and ringfencing its population and systems. This is likely to touch $300 billion by 2050. It is high time that the industrialised countries make good on their promise of providing $100 billion each year by 2020 and till 2025. Not even 10% of this amount has been provided so far.These transfers could be linked to the ‘excess’ per capita emissions of each country over the global average per capita GHG emissions. Each country will contribute funds equal to their excess emissions, multiplied by some agreed value per ton. If the total collection has to equal $100 billion a year, this will be around $10 per ton of GHG emissions. This should be applicable to all countries, including India. Second, creating a common technology development pool in which industrialised and developing countries are equal partners.These technologies should include battery storage for the power sector and for electric vehicles (EVs), CO2 capture utilisation and storage (CCUS), hydrogen, advanced bioenergy and nuclear power. An important aspect for India is the question of energy security and making it clean. Coal is the mainstay of the Indian energy system.India has retired 16,400 MW of old and inefficient coal-based plants recently, and plans to retire another 6,000 MW in the next 3-4 years. The plant load factor of existing coal plants is around 50% — almost half the time they are not producing power. Alongside is the very ambitious renewable energy plan of 450,000 MW solar capacity by 2030. To take in so much renewable power in the national power grid, India needs to create flexibility in the system. Storage is the main method for this.Global battery storage technologies are not ready at scale, and may take a few years. The price of power has to remain affordable. This does not mean that we don’t enhance efficiency of our power generation, transmission, distribution and usage. India should also bring climate change-supportive technologies into the ‘Make in India’ basket.Third, involving business and industry in climate change discussions and action. Financing should be made available to businesses at the same terms as those in the industrialised countries — at a cheaper cost of capital. These are now not available. However, the $100 billion a year funding could be used for ‘interest rate subsidy’, reducing the cost of finance by about 10 percentage points. This way the $100 billion could finance $1 trillion worth of climate actions every year. Furthermore, climate change-dependent risk disclosures should be made compulsory for businesses, especially for those with high exposure to climate change. Risk awareness and management should be promoted to curb the risks on general public.Fourth, net-zero is for the basket of all six GHGs and not CO2 alone. Around 15% of India’s total GHG emissions are in the form of methane and NO2 from the agriculture sector. These are very hard to mitigate due to the micro and dispersed nature of livestock and crop production. Agriculture would require special solutions and international institutional inputs on the lines of the Green Revolution.Fifth, bringing back the adaptation discussion to the table along with net-zero. We cannot forget climate change impacts on the vast poor population in India, adaptation needs for them, and the concepts of climate equity and justice. The writer is professor, Indian Institute of Management Ahmedabad.

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