Opinion
Three concrete outcomes for India’s G20 presidency
Summary
Besides leading by example, what can India do to raise the bar on energy efficiency?The year 2022 has been a year of hope and despair. A severe slowdown in global economic activity combined with high inflation has pushed many sections of the population into a cost-of-living crisis. The Russia-Ukraine conflict, the hovering shadow of the covid pandemic, and climatic shocks have all contributed to the ongoing economic crisis. In India, retail inflation has been above the Reserve Bank of India’s tolerance limit of 6% for most of 2022, fuelled by high food and fuel prices. Against this backdrop, India can leverage its G20 presidency, assumed on 1 December, to raise ambitions and shape global action on energy efficiency, which will be central to addressing the key priorities of energy affordability, security, and transition.
G20 countries represent 80% of global energy consumption and 85% of global gross domestic product (GDP). Given its potential to enhance economic productivity while limiting energy use, energy efficiency has been a special G20 focus, be it the Pittsburgh Summit (2009), Brisbane Summit (2014) or Hangzhou Summit (2016). In 2022, under Indonesia’s presidency, “boosting energy efficiency measures to realise its potential as a first fuel" was one of the nine principles in the Bali Common Principles in Accelerating Clean Energy Transition (COMPACT).
India is well positioned to put these principles into action, given its strong track record on energy conservation and efficiency. The country already has a well-functioning standards and labelling programme, has managed to transform its lighting market through the Ujala scheme, and is the first nation with a comprehensive national cooling action plan. In August, the country submitted its enhanced ambitions for climate action, including the reduction of its GDP’s emissions intensity by 45% by 2030 over 2005 levels, up from the previous commitment of 35%. On 12 December, Indian Parliament passed the Energy Conservation (Amendment) Bill, 2022, strengthening the country’s legal framework to enable carbon markets and nudge consumers on reducing our energy and carbon footprint.
Besides leading by example, what can India do to raise the bar on energy efficiency? As we step into 2023, here’s a wish list of three concrete outcomes for India’s G20 presidency.
First, a consensus on setting national targets for energy intensity improvements: The global rate of improvement in energy consumption per unit of GDP must increase by three times to meet Sustainable Development Goal 7.3 by 2030. With its dominant share in global energy consumption, the G20 must take the lead in creating a roadmap to meet these global goals through national and collective progress. As with national net-zero and renewable energy targets, sector-specific energy efficiency targets based on their circumstances and capabilities can provide a strong policy signal to the market.
Second, deeper financial collaboration on energy efficiency: Achieving enhanced targets would require financial instruments to unlock investments in energy-efficiency. The G20 has made notable progress on this front. For example, the 2017 Energy Efficiency Toolkit highlighted important tools, actions and case studies for policymakers to enhance capital flows to energy efficiency. However, energy efficiency investments need to grow by 3.6 times from 2021 levels by 2030 to realize the global 2050 net-zero goal as per the World Energy Outlook 2022. This is higher than the growth in investments required in any other clean energy vertical. India must focus on forging a partnership to mobilize capital flows at scale to enhance energy efficiency in critical demand sectors, specially buildings and industries that are capital intensive and have a large potential for technical lock-in.
Third, leverage Mission LiFE (Lifestyle For Environment) to stimulate collective global action on responsible energy consumption: The year 2022 saw power utilities in California asking consumers to curtail electricity consumption to avoid grid failure. Japan and some EU members continue to ask consumers to conserve energy as peak winter approaches. Shifting consumer behaviour has clearly emerged as one of the primary levers to manage a tedious energy supply situation. Noting the importance of sustainable lifestyles in the CoP-27 decision text was a clear endorsement of its importance by all parties to the UN Framework Convention on Climate Change. Using India’s Mission LiFE as a platform, the G20 must seek to reshape social norms around energy consumption, mobilize consumers to make informed purchase and usage choices, and unlock new energy efficiency markets through enabling policies, research and innovation.
Unlike their industrialized counterparts, demand for energy in developing countries will continue to grow as more people get access to reliable energy and the services it provides, such as cooling, cooking and mobility. Ensuring its most efficient and sustainable use is critical to an equitable transition to clean energy. For the first time, the G20 presidency will be held by developing countries for two years in succession.
India, as a strong voice for the Global South, must build on the progress made in Bali, leave a legacy of its own, and keep the momentum going into Brazil in 2024 and South Africa in 2025.
Shalu Agrawal & Dhruvak Aggarwal are, respectively, a senior programme lead and a programme associate at the Council on Energy, Environment and Water (CEEW).
