The last 40 years have seen Asia rapidly develop at rates perhaps never seen before. Within several decades, average life expectancy has more than doubled, while per capita income has risen nearly eightfold in the region.
No country has enjoyed this growth boom more than India, which has experienced a remarkable 6.5% average annual growth since the 1970s – well above the global mean. Yet this growth – largely fuelled by a more developed manufacturing sector and greater industrialisation – has come with plenty of environmental baggage; as shown below, the carbon emissions from fuel consumed by India have risen dramatically since the 1980s (Figure 1), due to the emergence of a richer middle-class that possesses far higher living standards in recent times. Consequently, India is now the third-largest greenhouse gas emitter in the world, only behind the United States and China.
Furthermore, India is not immune to the effects of global warming. A rising global temperature could potentially spark extreme heat outbreaks and droughts in the South, which would likely devastate South India’s agricultural sector, while Mumbai and Kolkata – both densely populated cities – are highly vulnerable to a rise in the sea level and its extreme weather-related consequences, including more frequent storm surges and tropical cyclones.
This naturally leads us to India’s momentous pledge to go net-zero by 2070, marking an important shift towards recognising that climate action is necessary for all countries to follow, regardless of those culpable for historic emissions. This pledge is hugely significant for the world’s battle against climate change, as the Indian economy is projected to grow at an average of 6.5% every year until 2050 – far above the global average during this time. If this growth were instead to be fuelled by a larger manufacturing sector and higher energy consumption, the world would see an unsurmountable rise in emissions.
Yet the Indian government must also balance the need to accelerate growth, given that there is a demographic “bulge” of young graduates that will need employment, and whether India can deliver this will determine if it can develop into a middle-income country in the future. However, the two mechanisms that have historically delivered this growth for developing countries – urbanisation and industrialisation – are both highly carbon intensive. The challenge is, therefore, to find a way of accelerating India’s growth all while staying conducive to its net zero promises.
Economic policies for growth and net-zero:
There are three economic activities that account for just under 80% of India’s greenhouse gas emissions: energy, agriculture, and manufacturing, as demonstrated by the above chart (Figure 2). This article will explore several policies the Indian government could pursue in order to transform these sectors and lead the country to its net zero targets, all while maintaining persistently high growth rates in the future.
India consumes the third highest electricity globally, with the energy sector alone accounting for nearly around 40% of its total greenhouse gas emissions. Over the next decade, the nation’s energy consumption is projected to grow by 5% every year, as a result of higher consumption and overall growth, making government action on fossil fuel energy sources all the more pressing.
According to recent projections, reaching the net zero target by 2070 will require India to eliminate its reliance on the combustion of coal (which alone accounts for 65% of the nation’s fossil greenhouse emissions) by 2060, while its solar and wind capacity must grow to an estimated 7400 gigawatts by 2070, up from 100 gigawatts today. This will require substantial investment in new energy infrastructure in future decades. The government can support this by providing additional public financing, coordinating state-led efforts to drive energy market reforms, and promoting ‘carbon capture’ systems for existing coal power plants.
While India’s agricultural sector contributes significantly to climate change (accounting for 18% of greenhouse gas emissions), it is also severely impacted by its effects. Global warming poses significant hazards to India’s agrarian growth with more frequent heatwaves and greater inconsistency of rainfall. Coupled with a growing population that will necessitate higher food production, Indian agriculture must become more sustainable and reduce its emissions, all while meeting a rising demand for crops.
This is a significant challenge: the government must train and equip over 150 million farmers to implement greener farming practices. These practices include the provision of electrical farm equipment as opposed to diesel pumps, an uptake of sustainable animal husbandry (to cut methane emissions from livestock), and modernising rice cultivation (to reduce the use of nitrogen).
- Manufacturing and Infrastructure:
India’s outdated urban infrastructure substantially contributes to its greenhouse gas emissions, with per capita emissions of 2.6 tons of CO2 in cities more than 40% higher than the national average. With the country’s urban population of 480 million set to nearly double by 2050, it is necessary to build low-carbon urban infrastructure to avoid high pollution levels and depleting energy resources.
Efficient and greener urban planning can aid this, by creating larger green spaces across cities that can sequester carbon emissions more effectively, while tracking and enforcing the use of new low-carbon construction processes and building energy codes can significantly reduce CO2 emissions while being conducive to urbanisation. A nationally coordinated approach to urban planning is necessary for these reforms to take place, or else India will risk continued unplanned urban growth that can substantially tax the environment.
It is evident that the Indian economy will need to undergo a significant structural transformation to meet its climate targets without sacrificing its necessary growth as a developing country, requiring significant public and private investment. India was one of the few major nations to meet its Paris climate goals, but – as the article has highlighted – achieving the net zero target by 2070 will perhaps pose the greatest policymaking challenge the nation has encountered.
This article was written by Rohan Prakash, currently a student at the London School of Economics and Political Science, pursuing BSc Economics.