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Bending India's emissions curve

To build a green and competitive India, we have to strive for net zero

Bs_logoFossil fuel, carbon emissions
Jayant Sinha
6 min read Last Updated : Jan 27 2022 | 2:39 AM IST
Achieving net zero by 2070 requires India to transition to a fundamentally different development model during this decade. Scientific studies indicate that today’s development model results in greenhouse gas emissions continuing to increase every year. We now need to first flatten emissions and then drive them down so that we get close to net zero by mid-century. In short, India will have to bend its emission curve. This will require immediate and sweeping changes to our overall tax structure as well as major changes to our regulations and policies in many sectors.

Detailed modelling shows that India’s greenhouse gas emissions are likely to grow from about 3.5 billion tonnes of carbon-equivalent emissions to over 7 billion tonnes by 2050. We account for about 7 per cent of global emissions today. The two largest emitters, China and the US, have committed to net zero by 2050 and 2060, respectively. If we emit 7 billion tonnes by 2050, we will likely be the world’s largest emitter and account for a high proportion of global emissions. This is India’s business-as-usual (BAU) scenario. Moreover, in this scenario, our emissions do not flatten — instead they keep going up in a straight line along with gross domestic product (GDP) growth. Simply stated, if GDP keeps growing at 5-6 per cent and carbon intensity in the economy keeps going down by 3-4 per cent, absolute emissions can still keep growing at 2 per cent per year.

India’s BAU scenario will lead to disastrous climate change that will imperil our planet. Moreover, it will result in a highly uncompetitive Indian economy since green (zero carbon) technologies are rapidly becoming more cost-effective than brown (high carbon) technologies. In fact, just like it is necessary to become a digital economy, it is equally necessary to become a green economy. We simply have no choice.

Several expert groups have researched what it will take for India to reach net zero by 2070 (NZ70). There are various policy packages that do get us to net zero — they all require us to flatten the emissions curve so that our emissions peak in the next few years at about 3.5 to 4 billion tonnes and then begin to decline. By 2050 our emissions should be no more than 2 billion tonnes and should keep declining gradually so that we can reach net zero by 2060 or 2070. The last 1-2 billion tonnes are associated with agriculture, and these will probably require considerable effort and time.

Each of the NZ70 policy packages require us to completely transform our economy. First, we have to massively revamp our power sector. Today, we have about 400 GW of installed generation capacity with 205 GW of installed coal capacity and another 40 GW under construction. We currently have about 170 GW of renewable (including solar, wind, hydro, biomass, and nuclear) capacity. The remaining capacity is from natural gas. In the BAU scenario, we add another 300 gigawatts (GW) of renewables by 2030 so that we have about 475 GW of total renewable capacity. Experts believe that this is an extremely ambitious target and will be difficult to achieve with our current policies since it requires massive investments in building out our grid and battery storage. Reaching NZ70, requires us to increase our renewable capacity from 475 GW to about 620 GW by 2030, an increase of another 145 GW! In fact, by 2050, 90 per cent of our power generation has to come from renewable sources compared to 75 per cent in the BAU scenario.
 
In sum, the scientific evidence suggests that we will have to retire coal by 2050 if we want to achieve NZ70. This necessitates fundamental changes to our current coal and thermal power policies.

Even as we are shifting our power generation to 90 per cent renewables, the NZ70 scenario requires to generate 10 per cent more electricity. Our installed capacity in 2050 in the net zero scenario is about 2,300 GW compared to 2,100 GW in the BAU scenario. Much of this increased electricity consumption comes from the switch to electric vehicles (EVs). In the BAU scenario, about a third of our passenger vehicles and two-wheelers are EVs by 2050. In the NZ70 scenario, 40 per cent of our passenger vehicles and buses will have to be EVs. In addition, virtually all of our two-wheelers and three-wheelers will be EVs. A quarter of our commercial vehicles also have to become EVs in the NZ70 scenario. To make all this happen, our EV promotion policies will have to be much more aggressive. Like in the European Union, we will probably need to implement an EV mandate immediately that becomes progressively stricter. Moreover, we will have to rapidly build out a fast-charging network.

Many key industrial sectors such as cement, steel, chemicals, and fertilisers will have to accelerate their shift from fossil fuels to electricity and green hydrogen. In the BAU scenario, about 15 per cent of the energy usage in these sectors comes from these zero carbon sources. In the NZ70 scenario, about 60 per cent of their energy will have come from zero carbon sources. A strict emissions trading systems with high carbon taxes will likely be required to drive this transformation.

Today the central and state governments derive some Rs 6 trillion or about 20 per cent of their revenues from taxing fossil fuels. This represents around 3 per cent of India’s GDP. In the NZ70 scenario, fossil fuels will decline in usage dramatically, thus massively reducing central and state government revenues. These revenues can be made up by a carbon tax framework that eventually gets to about 2-3 per cent of GDP with carbon taxes at about $70-80 per tonne. In the BAU scenario, there is no need for carbon taxes because fossil fuel usage continues at about today’s levels.

To build a green and competitive India, we have to strive for net zero. However, our current development model will simply not get us there. All stakeholders — policymakers, company executives, financial institutions, investors, research institutes, civil society, and particularly our youth — need to engage in serious, multi-year collaborative dialogue to reformulate our policies. Future generations will not forgive us if we fail.
The writer is the Chairman of the Standing Committee on Finance in Parliament and a Lok Sabha MP from Hazaribagh, Jharkhand. Views are personal

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Topics :Climate ChangeCarbon emissionsEmission normsBS Opinion

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