India has an opportunity to improve the quality and quantity of economic growth, according to the Global Commission on the Economy and Climate.
The research conducted for the Global Commission on the Economy and Climate, led by former President of Mexico Felipe Calderon, highlights the enormous opportunities for India in developing renewable energy and improving urban development.
However, future growth in both Indian cities but also the agricultural sector is at risk from climate change.
"India can create better growth, and at the same time ensure a safe climate for its citizens. Prime Minister Modi has set out a bold vision for India that will make it a leader in solar energy. We believe it is in India's economic self-interest to go even further," Calderon said during a visit to India.
"The Global Commission highlights huge opportunities for India. It recommends practical steps to make renewable energy cheaper and available to more people, building smarter, better connected cities and harnessing the enormous potential of India's villages by investing in agricultural innovation," Calderon added.
India's economic prospects hinge on its ability to meet fast rising demand for energy and securing access to the approximately 300 million people who currently lack it. The research conducted for the Commission finds that while the cost of foreign coal is projected to increase, the cost of renewable energy is likely to substantially decrease.
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Rajat Kathuria, Director and Chief Executive of ICRIER, a partner institution that contributed to the research, said: "Key reforms in three Indian sectors - energy, agriculture and land use, and cities - can allow India to significantly boost its economic development, ensure inclusive growth and reduce the risk of dangerous climate change."
"For instance, energy sector reforms, with the right social protections in place, can play a major role in helping India meet its development challenges and will not negatively impact the poorest people," added Kathuria.
The research conducted for the Commission suggests utilising innovative financing and distribution models to unlock the potential of renewable energy, for example by lowering the cost of capital for renewable energy.
It also notes how fuel subsidy reform can correct distortions and market failures and reduce crippling power sector losses. The immediate effects of such reforms are likely to be more easily absorbed due to low global oil prices.
Urban development in India is projected to continue to grow at a staggering rate: in the next 15 years, India's urban population will cross 600 million. Its cities will account for 75 percent of national GDP and 70 percent of all net new jobs. But urban sprawl, congestion and severe air pollution are reducing productivity. Half the world's most polluted cities are in India, including the top four in the world: Delhi, Patna, Gwalior and Raipur.
In response, research conducted for the Commission recommends loosening building restrictions in order to contain urban sprawl and building better infrastructure including improving public transport. It alsomsuggests strengthening the hand of urban governments to enable them to lead better urban development
Speaking at the event, Paul Polman, Chief Executive Officer of consumer goods multinational Unilever, who is also a member of the Global Commission, highlighted the importance of reforms to land use and agriculture:
"India's agricultural sector faces significant risks from climate change but it also has enormous potential to become part of the solution. Innovation in this sector has the potential to change the lives of over 600 million people," he said.
With this in mind a shift in public spending from agricultural subsidies towards Research and Development, which has a much higher return on investment, could be extremely beneficial.