India's climate challenge and the rise of a new green economy

As ecological tipping points loom closer, the discourse shifts from mere survival to prospering within a burgeoning green economy.
As ecological tipping points loom closer, the discourse shifts from mere survival to prospering within a burgeoning green economy.

Summary

  • India's current climate trajectory is characterized by increasingly frequent and severe weather anomalies, from the inundating floods in Mumbai to the relentless heatwaves across Rajasthan.

As the threats posed by climate change escalate, countries are having to navigate the challenge of balancing economic growth with environmental sustainability. India, with its large population and rising economic stature, is poised at the vanguard of this endeavour. 

As ecological tipping points loom closer, the discourse shifts from mere survival to prospering within a burgeoning green economy. 

India's current climate trajectory is characterized by increasingly frequent and severe weather anomalies, from the inundating floods in Mumbai to the relentless heatwaves across Rajasthan. These events affect millions and place substantial strain on national resources. 

Climate change presents a formidable threat to agriculture, which sustains over half of India’s workforce, posing challenges to food security and economic stability.

Yet, within these challenges lies an opportunity for India to transition toward a green economy. This shift could serve as a model for other developing nations, demonstrating viable pathways for economic expansion alongside sustainable practices. 

The foundation of this new economic paradigm encompasses renewable energy, sustainable agriculture, urban resilience, and green hydrogen.

Renewable energy, in particular, offers significant prospects. India is aggressively expanding its renewable capacity, with a target of achieving 500 GW from non-fossil sources by 2030. This shift towards renewable sources transcends policy initiatives, responding to market imperatives for sustainable and viable energy solutions. 

Solar power, advantaged by India’s geographical and climatic conditions, offers immense potential for growth. In 2023, India had 238,000 jobs in grid-connected solar PV (photo voltaic), an 18% increase from 2022; around 80,000 people worked in the off-grid solar sector (International Renewable Energy Agency, 2024). 

Furthermore, the decentralization of solar power could foster more balanced development by energizing remote locations, thus mitigating urban-rural disparities. 

Green hydrogen also plays a key role in India’s strategy. As a clean energy carrier, it can significantly reduce emissions in heavy-polluting industries like steel and chemicals. The National Hydrogen Mission aims to scale up production using electrolysis powered by renewable energy sources, setting the stage for a deep decarbonization of the economy. 

These solutions can support the transition of MSMEs (micro, small and medium enterprises) with the help of R&D labs tailoring green technologies to their needs.

Read more: India’s apex auto testing body looks to accelerate to the green lane

Sustainable agriculture and urban resilience remain pivotal. Techniques such as drip irrigation, recycling of water, uses of nano fertilizers, and the cultivation of drought-resistant crops should become standard with focus on precision agriculture, supported by government initiatives that need wider implementation. 

Urban planning must prioritize green buildings, effective transport planning (including public transport and integration of electric vehicles or EVs), and efficient waste management to adapt to the rapid pace of urbanization.

Economic incentives such as subsidies for green technologies, carbon credits, and green bonds are critical in facilitating this transformation. Recent governmental support for EVs is a promising advancement in reducing urban pollution and greenhouse gas emissions. However, more comprehensive financial mechanisms are needed to scale up these initiatives.

While the emphasis is on policies targeting climate change mitigation and adaptation, along with fostering a green economy, it is crucial not to overlook the importance of creating green jobs during this transition. 

These jobs will not only help reduce carbon emissions but also offer substantial employment opportunities in new sectors, fostering a just transition for workers moving away from traditional industries. Ensuring that this transition is equitable involves retraining programs, robust community engagement, and policies that support workers and their families.

While the challenges posed by climate change are daunting, they also present unique opportunities for India to lead the global transition to a green economy. 

By focusing on renewable energy, sustainable agriculture, urban resilience, and the integration of green hydrogen, India can safeguard its environment and economy while setting international standards for sustainable development. 

However, to truly capitalize on these opportunities, there is an urgent need for innovative green finance solutions. In India, estimates suggest that green financing needs amount to at least 2.5% of GDP annually. 

Read more: How global warming smashed all safety barriers in 2024

To meet the scale of investment required, public funds will be essential but insufficient. Leveraging private investment through green bonds and other sustainable investment vehicles can provide the necessary capital to drive these ambitious initiatives forward. 

Additionally, international financial cooperation and targeted funding from global institutions can help mitigate financial risks associated with transitioning to green technologies.

However, one of the critical challenges India faces is the limited support from international climate finance. The recent outcomes from COP29 have highlighted that while there is growing recognition of the need for climate action, the commitments for providing sufficient climate finance to developing countries remain inadequate. 

The decisions made at COP29 fall short of meeting the funding needs for developing economies like India, where the cost of transitioning to a green economy is substantial. Without substantial financial flows from international sources, India’s green transition could face significant obstacles, despite the country’s substantial efforts at the national level.

The path forward for India will require innovative approaches to green finance, ensuring a prosperous and sustainable future for all its citizens. The journey is complex and filled with challenges, but with dedicated effort and strategic planning, India can realize its green aspirations and emerge as a leader in the global green economy.

Vibha Dhawan is director general of The Energy and Resources Institute (Teri).

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