The euphoria around India’s announcement on five commitments in the Conference of Parties (COP) on Climate Change in Glasgow is understandable. With these announcements, India has shown its commitment to walk the talk and take a lead in mitigating climate risk, despite having low per capita emissions. However, India’s international announcements and domestic actions have been a case of many a slip twixt the cup and the lip.
India will require to rapidly scale up technologies, draft enabling policies, and strengthen domestic and international efforts to provide a robust framework of financial, technical, and social support to affected workers, sectors, and communities. Some efforts could be a starter –
1. Deploy carbon pricing and markets
The concept of carbon markets is to put a price on carbon often created through a tax to capture the cost of harms caused by GHG emissions that companies don’t currently pay for. Carbon pricing can promote cost-effective abatement, and deliver powerful innovation. India has several policy provisions on these lines, but lacks an evolved framework like that of the European Union Emission Trading System (ETS). India has a ‘Perform, Achieve, and Target (PAT)’ scheme in which energy-intensive companies are given a target to achieve, and over achievement of targets earns them a certificate of trade. The scheme was launched in 2017, and has already come under the clouds of not being ambitious enough. India also charges a cess on coal mining. Another pricing mechanism that has emerged is the Internal Carbon Pricing (ICP) in which companies can voluntarily deploy to reduce emissions, and channel investments towards innovative, clean, and energy-efficient technologies. Though these carbon pricing mechanisms exist, India misses a clear policy framework that can sustain the momentum, and most critical explore the potential for linking with the global carbon markets.
2. Focus on hard to decarbonize sectors
Shipping, transport, and heavy metal industries like aluminum, cement, and steel are all difficult places for cutting emissions. India currently does not have a comprehensive policy, or a shared vision involving all major players to co-develop practical roadmaps. India needs to conduct sectoral analyses to understand the role of different policies and technologies in reducing emissions, and create a deeper understanding amongst key stakeholders on long-term decarbonization approach.
3. Encourage innovation and cross-sector learning
Support for innovation has brought cutting-edge technology in the renewable energy sector which resulted in a lower cost of adoption. More is possible. The sectors like geothermal energy, carbon capture, and green hydrogen are new developments that can make a big difference in years to come. On a policy level, there has been greater cross-learning and cooperation among countries. Glasgow saw development of the “Breakthrough Agenda” – a framework for bringing governments and businesses together to collaborate on clean energy, and technology. The ‘breakthrough’ includes making electric vehicles the norm, further bringing down the clean energy costs, scaling up green hydrogen technology, and an ambitious near-zero-emission target for the steel industry by 2030. India will need to create an enabling regulatory framework to encourage innovation, and regional and global level cooperation, to help shape the market.
4. Prioritize green and responsible financing
Financial institutions will play an important role in financing sustainable sectors and green economy. Indian banks have been a laggard in this. Out of the 252 banks that are signatories to UNEP’s six principles of responsible banking, only Yes Bank is from India. These principles guide banks to align their visions with the Sustainable Development Goals of 2015 and the Paris Climate Agreement. The report ‘How Central Banks are fuelling Climate Crisis‘ by Oil Change International, mentions that the RBI has not taken framed any monetary policy over routing financial flows away from fossil fuels to the renewable energy projects. The same report stated that Indian banks rank fourth globally in financing coal plants, providing $155.6 billion (about Rs 11.1 lakh crore, per 2019 rates) in loans between 2012 and 2019.
Though some changes have come, Indian banks will need to step-up to finance high-impact climate action and sustainable businesses in India. Indian needs a guiding policy to make responsible and green financing the norm.
5. Reduce methane emissions
Despite being the third-largest producer of methane gas, India did not sign the COP26 pledge to stop deforestation and cut methane gas emissions by 2030. The concerns of the country’s vast agriculture sector and the role played by the livestock were the significant factors behind the move. Given that methane has a global warming potential of 28-34 times that of carbon dioxide, it will be pertinent to focus on reducing methane emissions. And since agriculture and especially the livestock rearing sector is a huge contributor to methane emissions, any strategy will mean innovation in agriculture, technology transfer, and the adoption of good farming practices.
Mitigating carbon emissions will be a long slog. And while there may not be an easy and right answer to this problem, a momentum needs to be built, and political will to exist to achieve the goals set. The five goals set with their timelines stretching from 2030 to 2070, will only be achieved when decarbonization is seen from a holistic lens and India considers the domestic policies and actions and shows will to develop a market for green practises. That will mean moving away from the path so long tread.
*Aakash Mehrotra is a novelist, blogger, and consultant in international development working in South Asia and Africa.