The Poorest Super-Emitter Needs a Different Path to Net-Zero

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(Bloomberg) — If all goes according to plan, India will be dead last among the world’s biggest economies to zero out greenhouse gas emissions. And that’s precisely as it should be.

India’s target date to reach net-zero is 2070. That’s two decades after the far wealthier U.S. and Europe. And it includes an additional 10-year cushion separating it from its neighbor China’s 2060 goal. Trying for more severe cuts to emissions much sooner could leave millions of Indians struggling for access to basic staples, including the delivery of more air conditioning to a nation that’s extremely vulnerable to heat waves. In fact, India’s challenges maintaining its fragile electric grid under the ever-increasing demand fueled by warming temperatures is a matter of life and death.

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“The challenge is fundamentally different for a country on the upward slope of emissions than for a country on the downward slope of emissions,” says Navroz Dubash, a professor at the Centre for Policy Research, in New Delhi.

For India, with its historically minor responsibility for planet-warming pollution, there’s a goal more urgent than taming climate change: lifting millions out of poverty over the next few decades. While American drivers choose from electric pickup trucks, eventually decreasing demand for oil, India is struggling to reduce its growing bill for imported fuel. While British policymakers craft subsidies to retrofit old houses for energy efficiency, India’s focus is on ensuring energy bills are as low as possible. And while New Zealand burnishes its climate standing by slashing methane emissions from its cattle farms, India still has to feed its growing population of 1.4 billion as more extreme weather events threaten agriculture.

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“The question becomes,” Dubash says, “how do you extract the most development per unit of carbon?”

China’s development path is not a particularly useful precedent. Yes, the two countries both have billion-plus populations. But the world’s No. 2 economy is the largest manufacturer of solar panels, lithium-ion batteries, and electric vehicles. China is also, by far, the top installer of offshore wind turbines, hydrogen electrolyzers, new nuclear power, and high-voltage cables that can carry renewable power from sunny and windy areas in the west to populated centers in the east. India has yet to build the capacity to manufacture any of these green technologies at scale; so far it’s mastered deploying only solar panels and onshore wind turbines.

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To meet their climate goals, all governments have to find ways to make economic growth catalysts less carbon-intensive. But India is the only lower-middle-income country among the five biggest global emitters. “In planning an alternative pathway, India doesn’t have any role models in another country,” says Ulka Kelkar, climate program director at the World Resources Institute India.

The sometimes contradictory effort to escape from poverty without rejecting the global push for decarbonization can make India’s ambitions hard to parse. Last year’s COP26 climate summit in Glasgow, Scotland, was bookended by moments in which India played champion and spoiler. The event began with Prime Minister Narendra Modi’s surprise net-zero announcement, finally aligning all 10 of the world’s largest economies–and 46% of the planet’s population–behind the requirements of the Paris Agreement. Congratulatory messages poured in from world leaders. But COP26 ended on a sour note, with some small island nations under existential jeopardy from sea-level rise blaming India for successfully scrapping, at the last minute, a global commitment to phase out the use of coal. India’s environment ministry didn’t respond to a request for comment.

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Part of the problem is that India not only needs to grow more quickly than other super-emitters, but it’s also one of the most affected by increasingly extreme weather. That means urgent investment is needed to adapt to a warmer planet, with curbing pollution sometimes becoming a secondary consideration. India’s first official assessment of climate change, published in 2020, showed that the frequency and intensity of droughts and cyclones had significantly increased in the last six decades. The number of days of intense rainfall and the pace at which sea levels are rising have more than doubled over that period. A single extreme weather event, Cyclone Amphan in 2020, affected 13 million people in India and wrought $13 billion in damage.

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The future looks even more terrifying. Under the worst-case warming scenarios, India is set to experience four times as many heat waves by the end of the century as it does now. Declining agricultural productivity and rising food prices will hit sooner, pushing 50 million people below the poverty line by 2040, according to the Overseas Development Institute.

If India in the near term needs to rely on cheap fossil fuels, that leaves open an enormous question: What does a trajectory to net-zero look like inside a nation whose escape from lower-middle-income status over the next generation will need to coincide with global decarbonization? How India goes about achieving its climate targets will look distinctively different from the efforts being pursued by the U.S., Europe, and China. This is especially true if India walks down the path to net-zero without much foreign financial support.

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“No one has come forward with constructive offers of support to help India meet its climate goals,” says Kanika Chawla, program manager at UN Energy, which coordinates energy-related issues across the United Nations. Developed countries failed to deliver on their promise to provide $100 billion in annual climate funding by 2020 to help developing nations. At COP26, meanwhile, India demanded $1 trillion in aid over the next decade–just for itself–before it could meet its 2070 target.

Without a wave of financial support from abroad, India will likely rely on homegrown tools that have lowered energy consumption and the cost of living for millions of its people. In this way the poorest super-emitter on the planet might become the role model it never had for the rest of the developing world–testing and perfecting a playbook for the most cost-effective strategies to reap climate benefits without setting back the primary need, to defeat poverty.

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Two and Three, not Four

In a market where cars remain a luxury, India’s push to electrify transport has focused on scooters, motorized bicycles, and rickshaws. By 2030 more than 80% of the two-wheelers sold in the country could be battery-powered, according to Nitin Gadkari, minister for road transport and highways. Today almost half of all three-wheelers sold are electric, says Rishabh Jain of the New Delhi-based nonprofit Council on Energy, Environment and Water. Battery swapping for smaller vehicles is becoming popular in Bengaluru, Mumbai, and other space-constrained, crowded cities.

Energy-Saving Factories

Instead of a carbon market that makes companies pay for every ton of carbon dioxide they emit–such as the one governed by the European Union–India in 2008 launched a program that forced energy-intensive industries to become more efficient. Companies that use less energy than set targets can trade the savings as credits. Cutting energy use means reducing carbon emissions, too. The program saved 87 million metric tons of CO₂ in 2020, about the same as Bangladesh’s annual footprint, and many everyday goods are adorned with energy-efficiency labels showing how well they conserve power. 

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Lightbulbs That Cut Bills

The Gram Ujala initiative, named using the Hindi words for “rural lights,” offers subsidized LED lights to villagers. The bulbs, as many as 5 million of which were distributed last year, are many times more efficient than traditional incandescent alternatives. The Bureau of Energy Efficiency says Gram Ujala and other measures targeting home appliances saved $4 billion in electricity and cut emissions by 46 million tons in 2020.

Cleaner Cooking

Air pollution generated indoors kills 1.7 million Indians each year and causes $37 billion of economic losses, according to a Global Burden of Disease study. A major contributor to noxious air in the home is the burning of firewood for heat and cooking. Switching more than 88 million poor households to liquefied petroleum gas since 2016 has significantly reduced the health risks associated with pollution. It’s also saved women from hours of collecting wood. Although the change slightly increased India’s emissions, “the development gains are so big that it’s just a no-brainer,” says the Centre for Policy Research’s Dubash. Eventually, similar programs could be used to shift to electricity or a carbon-free gas for cooking.

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Solar and Wind Boom

Coal contributes to more than 70% of all Indian electricity generation. But solar power, which has become the cheapest source of new power, is growing fast. The country aims to install 175 gigawatts of renewable energy, three times the amount currently deployed in the U.K., in 2022. While India might fall slightly short of that target because of the economic hit from the pandemic, Modi is setting his sights even higher. He wants green power capacity to reach 500GW by the end of the decade. Billionaires Mukesh Ambani and Gautam Adani are looking to invest $76 billion and $50 billion, respectively, in the sector.

India’s energy transition has been held back by the high cost of capital, with companies often finding it harder to tap international financial markets than their Western peers. There are three solutions to high borrowing costs, says Ajay Mathur of the Energy and Resources Institute: The government can get sovereign loans from international financial institutions such as the World Bank, better manage foreign exchange risks, and boost links with other green markets that could make it easier to raise cash for an expansion of renewables.

But India can also think bigger. Its cities are growing and industrialization is happening so rapidly that the country has a rare opportunity, Dubash says. Unlike rich countries that have to slowly replace existing infrastructure, a developing country such as India can reimagine how it builds cities and industries from scratch. It can avoid locking in an emissions-heavy future.

“You have a lot more decisions to make and many more alternative futures,” Dubash says. “But that also increases the complexity and cost of realizing those futures.”

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