By Arunabha Ghosh and Kanika Chawla
India was the last major economy to submit its Intended Nationally Determined Contribution (INDC) to the UN Framework Convention on Climate Change (UNFCCC), its commitments attracting much attention both from other parties to the Convention and from observer institutions, civil society organisations, research institutes and the private sector. India’s INDC highlights three clear targets for 2030. One is to reduce emissions intensity of GDP by 33%-35% from 2005 levels. Secondly, increasing the share of non-fossil electricity generating systems to 40% of the commutative installed capacity. Thirdly, to create additional carbon sinks of 2.5 to 3 billion tonnes of carbon dioxide equivalent through additional forest and tree cover. It is interesting to note that while this commitment has important international implications, Minister Javadekar has called this a domestic action plan – one that India would pursue even in the absence of any international agreement around climate change and emissions reductions. Furthermore, while international financing and technology transfer and sharing are going to be key to the realisation of these targets, India has not made any part of its INDC explicitly conditional on a quantum of finance or technology. What do these targets mean in terms of the scale of climate action, how India fares against other major economies and the scope for more effective international cooperation?
India’s INDC is important in three ways. First, it maintains ambition in emissions intensity reduction (35% should be achievable; in fact it could have been more aggressive) but balances it with the significant need for climate adaptation. Scholars at the Council on Energy, Environment and Water (CEEW) and the Indian Institute of Management Ahmedabad argue that adaptation includes development expenditure based on central government schemes in addition to costs of implementing adaptation options. This is because development is crucial in building adaptive capacity and should also include adaptation costs for sectors such as infrastructure (roads, bridges etc). This inclusion of development spending (through centrally-sponsored schemes) leads to an estimate of 0.7% of GDP annually (as compared to the INDC, which estimates 0.48% for implementing adaptation options). CEEW, IIM Ahmedabad and IIT Gandhinagar, research shows that in 2013-14, the government (both central and state) already spent USD 91.8 billion on adaptation related programmes. At 0.7% of GDP this amount of public spending compares far more favourably than the cumulative amounts pledged to let alone disbursed from the UN’s Green Climate Fund. CEEW analysts estimate that climate impacts could impose mammoth economic losses for India, in the range of INR12,480 billion (USD208 billion) for agriculture and INR1,980 billion (USD33 billion) for additional power generation in 2050.
Secondly, India’s INDC has further expanded its already aggressive renewable energy and non-fossil energy targets. At 40% non-fossil electricity capacity, this would mean a four-fold increase in absolute terms over today’s installed capacity. This will pose a significant demand in terms of finance and a significant challenge in terms of engineering. The world ought to recognise the sheer scale of this ambition.
India’s current non-fossil fuel capacity stands at 84.5 GW (37 GW of renewable Energy, 5.5 GW of nuclear and 42 GW of large hydropower). This implies that of the current total capacity of 277 GW, non-fossil fuels contribute just over 30%. The INDC target of 40% non-fossil fuel capacity by 2030 would require India to have close to 320 GW of collective renewable energy, nuclear and large hydropower capacity. As India’s total electricity capacity grows less than three times between now and 2030, the non-fossil fuel capacity would have to quadruple to reach the target of 40% share. This capacity target would result in 30% of electricity generation coming from non-fossil fuel sources by 2030, nearly double the share of non-fossil fuels in the current final electricity consumption.
Unlike China, with its large nuclear and hydropower projects, India intends to add a bulk of this non-fossil fuel capacity in the form of solar and wind power. In China’s current installed capacity mix, large hydro and nuclear together contribute 24%, significantly larger than the 7% contributed by solar and wind power. When compared with India’s current installed capacity mix, renewable energy contributes 13% of installed capacity, and large hydro and nuclear together contribute 17%. This, combined with the ambitious targets of 175GW of renewable energy by 2022, which find mention in India’s INDC too, are indicative of the difference in the composition of non-fossil fuels in the two countries. Looking forward to 2030, India will be adding 236 GW of non-fossil fuel capacity, as compared to China’s 800-1000 GW of non-fossil capacity to reach its respective commitment of 20% non-fossil share of total primary energy demand.
Between 2000 and 2010, India’s per capita GDP (PPP) grew 121%, but this occurred with a concomitant growth in absolute emissions of 69%. Chinese incomes, on the other hand, grew 216% (less than twice India’s growth rate) but registered more than double the growth rate in emissions (143%). Going forward, both India and China aim to reduce their emissions intensity but China’s emission intensity has been significantly higher than India in the past and is projected to continue being higher than that of India even in 2020.
Similarly, the share of renewable energy, as a share of electricity generation in 2010, in India was 4.4%, far ahead of China at 1.7%. Even if large hydropower were included, China’s share of renewable energy was only marginally more than India’s in 2010. In 2030 India’s target would result in 30% of electricity generation coming from non-fossil fuel sources, compared to China’s commitment of only 20% non-fossil energy by 2030.
The third important feature is the call for global technology partnerships, particularly on clean coal and energy storage. Without effective partnerships, the global ambitions cannot be met. Such partnerships have to be inclusive in membership, targeted for outcomes and innovative in terms of co-development and co-ownership of intellectual property. India’s INDC sets the ball rolling for these necessary efforts.
Technology transfer (and associated financing) has been a key demand throughout the two decades of climate negotiations. However, thanks to prohibitive costs, restrictive intellectual property rights, continued lack of capacity for domestic R&D or for cross-border joint ventures, and insufficient capital to underwrite risks, there has been persistent failure in facilitating the development and transfer of climate-friendly technologies. More effective partnerships are needed.
India has an opportunity to forge an effective partnership that promotes greater decentralised energy production. India should create a new multi-country partnership to promote much greater decentralised energy production to satisfy the potential demand from the two billion poor people who still lack access to basic modern energy. India has hundreds of entrepreneurs working in this sector and showcasing their work would draw significant credit to India. The partnership, with other developing countries as well as developed ones, would supply initial working capital for far-flung smaller entrepreneurs in developing countries, help link them to larger investors such as pension funds, establish centres to certify these new technologies, and create model regulatory codes. Energy access for all is necessary before many developing countries will accept economy-wide emissions limits.
A similar opportunity exists in the energy storage and grid balancing technology space, which is central for India as it targets the integration of large amounts of renewable energy in to its electricity mix. With energy from non-fossil fuel sources expected to account for 30% of India’s electricity mix by 2030, there is an urgent need for improved technologies for energy storage and grid balancing. India should co-chair a new multi-country partnership to speed up deployment of these technologies, which would give its research laboratories and public and private sector firms an opportunity to collaborate with the world’s leading labs and companies (in France, Germany, Japan and the United States, among others) working on energy storage. The partnership could target research and development on specific issues – increasing the life of batteries, their energy density, or the efficiency of the charging/discharging process – and Indian firms could be joint owners of new intellectual property. India offers significant market potential to both test new technologies and commercialise viable ones. If China became the factory of the world in the past decade, India’s climate contributions create opportunities to become the laboratory of the world for clean technologies.
Associated Reading from CEEW
India’s Intended Nationally Determined Contributions: Renewable Energy and the Pathway to Paris; http://ceew.in/search_result.php?catid=6
Access to Clean Cooking Energy and Electricity: Survey of States, http://ceew.in/publication_detail.php?id=275