India’s commitment towards attaining net zero emissions by 2070 lies at the core of the global climate change framework. This vow accords with worldwide goals on climate action, thereby underlining the role developing nations can play in combating climate change. Intermediate milestones and proactive actions are essential in showing the way towards achieving long-term objectives. If it focuses on these short-term goals, India will not only be able to meet its reduction targets for greenhouse gas but also pave the way for sustainable economic progress, thus ensuring the right balance between development and conservation of the environment.
Net zero emissions refer to a situation where the amount of greenhouse gases released is balanced with those taken out. By 2070, India has set an ambitious plan to reach net zero. Notably, this move is indispensable since India has become the third largest greenhouse gas emitter globally despite India’s per capita carbon emissions being one of the lowest in the world. We look into how far India has come regarding this target by mid-2024, highlighting some initiatives and crucial gaps that must be filled.
Progress Made So Far (2021 to Mid-2024)
India is the third-largest emitter of greenhouse gases, with annual emissions reaching ~ 3 Billion Tonnes, marking up to an 8% YoY increase from pandemic levels. Many initiatives have been introduced under the Panchamrit Action Plan to reduce emissions across key sectors through subsidies, frameworks, and mandates.
To decarbonise the energy sector, the primary source of emissions, GOI aims to increase non-fossil fuel capacity to 500 GW and meet up to 50 percent of consumer demand through renewables by 2030. The government prioritises domestic production of photovoltaic modules under the PLI scheme, builds resilient transmission infrastructure for renewable energy under the Green Energy Corridor Initiative, and offers heavy subsidies to solarise irrigation pumps under the PM-KUSUM scheme. To address grid stability issues arising from intermittent renewable output, the Ministry of Power is promoting the development of pumped storage and small hydel projects.
The government has doubled efforts to produce hydrogen, a critical element in industry processes, through clean energy to decarbonise energy-intensive industries and transportation. Although in nascent stages, India, under the National Green Hydrogen Mission, aspires to become the global hub for producing, using, and exporting green hydrogen. Further, India made a bold move by making the carbon credits market more inclusive by allowing non-obligated companies to voluntarily participate and reduce their carbon footprint.
Further, to make EVs financially viable by reducing battery costs, which account for ~ 40 percent of vehicle cost, GOI has introduced a Battery swapping policy and PLI Scheme on Advanced Chemistry Cell (ACC). To enhance carbon sequestration through natural carbon sinks, the Ministry of Environment plans to build up to 1000 Nagar vans (urban forests) across India under the Nagar Van Yojana, 380 of which are already sanctioned.
The progress seems encouraging on several fronts. Today, India stands fourth globally in total renewable capacity, demonstrating a 400 percent growth over the last decade. On the other hand, EVs accounted for nearly 5 percent of total vehicle sales last year. With ~50 percent penetration of EVs in the 3-wheeler segment, growth is led by an attractive value proposition for last-mile EV asset operators and ride-hailing providers.
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Challenges and Gaps to the Goal
The road map toward the objective of net-zero emissions by 2070 is filled with formidable gaps and challenges in India. One of the urgent issues that looms over this journey is the continuing reliance on coal and other fossil fuels. The energy sector accounts for ~40 percent of India’s emissions, with the combustion of coal contributing to 65 percent of total fossil-fuel CO2 emissions. In 2021, coal contributed 72 percent of India’s electricity generation, thus remaining the primary energy source. While a few states, such as Gujarat and Tamil Nadu, have progressed with renewable energy like solar, wind and tidal, others lag far behind. India’s solar and wind capacity would have to increase from 100 GW to over 7400 GW by 2070 to achieve net-zero targets.
Another critical area is the slowed infrastructure development for electric vehicles. The pace of charging network development and the high fixed and maintenance costs make large-scale adoption a tough nut to crack. As of 2023, India had fewer than 2,000 public EV charging stations– far below what would be required to support mass EV adoption.
Agricultural emissions are the largest share of methane (~45 percent) and nitrous oxide (~80 percent). The same is true for industrial sectors like cement, steel, and chemicals, which are large emitters of GHG. It is reported that more than 40 percent of the associated emissions from these industries stem from fossil fuel use. Deep decarbonisation in these sectors, with high costs and technology limitations, becomes challenging.
With the largest population in the world and increased consumerism, the country’s green transformation necessitated substantial capital expenditures, creating friction in policy implementations. The Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme, which aims to promote EV adoption, has faced several implementation challenges. The deployment of Carbon Capture, Utilization, and Storage (CCUS) technologies has been slower than planned, with projects in the cement and steel sectors still in the pilot phase.
Strategies for India’s Sustainable Growth in the Move Towards Net Zero
Any drastic measure in a developing economy needs to be evaluated against social costs, such as associated job losses. A recent analysis by McKinsey suggests that, given India’s growth outlook, the benefits from a well-planned, orderly net-zero transition far outweigh the associated costs.
Based on a study conducted by CEEW-Centre for Energy Finance, India would need a total investment of $10.1 Trillion to achieve net-zero emissions by 2070. As proposed in the 2022 Union Budget, the issuance of sovereign green bonds can further mobilise resources for large-scale infrastructure projects. Other levers such as tax rebates, low-interest loans, subsidies, blended financing models requiring public-private partnership, and, most importantly, enabling a supportive environment for FDIs will help stimulate investments in capital-intensive greenfield projects.
Based on the data collected by McKinsey in its recent report on decarbonising India, the infographic below illustrates how additional investment could accelerate India’s net-zero transition. Without intervention, India is projected to emit 160 Gt of carbon from 2020-2070. However, with an extra $5 trillion investment, emissions could be halved to 80 Gt, a 50 percent reduction. Seven key pillars anchor this reduction. With robust policies supporting these pillars, India could not only minimise climate change impacts but also achieve its Net-Zero targets more rapidly.
Figure Source adapted from: Decarbonising India: Charting a pathway for sustainable growth. (2022, October 27). McKinsey & Company.
Investing in research and development will be crucial. Allocating dedicated funds and establishing centres of excellence can accelerate breakthroughs in renewable energy, EVs, hydrogen technologies, and carbon capture. Carbon taxes for non-essential products could lead to the adoption of greener practices in business operations. Further, mandating eco-labelling on products and services could help raise awareness and create consumer-side pressure on companies to fast-track the green transition.
As India transitions to a low-carbon economy, the loss of jobs in energy-intensive industries such as coal is inevitable. Therefore, it becomes crucial to design upskilling programs to ensure a smooth transition for the vulnerable workforce and meet the demands of a green economy.
Lastly, community engagement and public awareness will be vital. Localised and targeted campaigns emphasising climate literacy in academic curricula will be important in building a feeling of ownership and accountability for the journey ahead towards net zero in India.
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India’s Net Zero Journey: The Path Forward
India’s journey toward achieving net zero emissions by 2070 reveals a mix of promising initiatives and significant challenges. While strides have been made in expanding renewable energy capacity and promoting electric vehicles, critical gaps remain, including a heavy reliance on coal and inadequate charging infrastructure. The urgency for immediate and sustained action cannot be overstated; collaborative efforts across all sectors are essential to remain on track for the 2070 target.
Policymakers must implement robust policies, businesses should invest in sustainable practices, and citizens must raise awareness and engage in green actions. By coming together and fostering a culture of accountability and innovation, India has the potential to not only meet its net zero goal but also serve as a global leader in sustainable development. Now is the time for decisive action, ensuring that economic growth and environmental responsibility go hand in hand.
Anjal Prakash is a clinical associate professor (research) and research director at Bharti Institute of Public Policy, Indian School of Business (ISB). He contributes to IPCC reports and teaches sustainability at ISB.
Nishant Gupta is a PGP student at ISB and an alumnus of Punjab Engineering College, Chandigarh. Working at the centre of sustainability and analytics, he has developed data science-led solutions for CPG companies to eliminate wastage and optimise demand planning and energy consumption.
Ayush Chakraborty is a PGP student at ISB and an alumnus of IIT-BHU, Varanasi. He has worked in the supply chain divisions of Unilever and AB InBev, where he contributed to building sustainable strategies for global operations before transitioning to a Strategic role at Jodo.
[This article has been reproduced with permission from the Indian School of Business, India]