Can we offer a credible strategy for the reduction of emissions?

The United Nations’ Intergovernmental Panel on Climate Change (IPCC) has warned that we are set to exceed the target of limiting global warming to 1.5° Celsius above pre-industrial levels. The outcome will be disastrous for the planet and India will be one of the worst sufferers.

The only good news is that if emissions can be drastically cut this decade, we may be able to get back to the 1.5°C limit after a temporary overshoot. Governments seem willing to act. The US, EU, UK, Japan and others, including developing countries, have endorsed the target of reaching net-zero emissions by 2050. Some nations have announced the intention of halving emissions by 2030.

These issues will be taken up this November in the CoP-26 meeting, when countries are expected to table concrete commitments. We must consider what India’s strategy should be for the meeting.

Traditionally, we have argued that expecting us to cut emissions is unfair because the main cause of global warming is the accumulation of greenhouse gases (GHGs) in the atmosphere and since most of this is due to the actions of developed countries, the burden of reducing emissions should fall mainly on them. Accordingly, in Paris in 2015, we limited our commitments to: (i) reducing the emissions intensity of our gross domestic product (which won’t reduce emissions if GDP is growing); (ii) increasing our share of non-fossil fuel-based electricity; (iii) creating additional carbon sinks through afforestation.

With the IPCC now signalling “code red” and many countries (including developing ones) agreeing on measures to reduce emissions drastically, we will be under pressure to do the same. Should we also agree? There are good reasons for doing so. This is because the central assumption underlying our traditional position, that accepting a reduction in emissions will undermine our development objectives, is no longer valid. Technological changes now make it possible to get almost all the energy we need without any emissions.

An effective strategy for reducing emissions would involve action on four fronts: (a) increasing the efficiency of energy use in all sectors to reduce our total demand for energy, (b) shifting from fossil fuels towards electricity as the final energy carrier in different sectors, combined with (c) moving away from fossil fuels to renewables, mainly solar and wind, for power generation. These steps can be combined with a fourth: (d) removing emissions from the unavoidable use of fossil fuels through technologies such as carbon capture or by afforestation.

There is considerable scope for moving away from fossil fuels to electrification in many areas. This is most notable in transport, where all kinds of passenger vehicles including city buses can be electrified. Railways are already being electrified and the process could be completed in the next few years. However, long-distance freight transported by road, air transport and shipping are examples of areas where the use of fossil fuel cannot be avoided for some time.

It is also not possible with present technology to eliminate fossil fuels in industrial processes requiring high temperatures, or in those needing fossil fuel as feedstock, such as cement, steel and fertilizers. However, commercial breakthroughs in the production of green hydrogen in the coming decades may make a big difference.

Although India’s shift towards green electricity has begun—and the ambition we have shown in this area has been lauded—the extent of expansion needed for decarbonization will be much larger. Increasing the share of renewables will pose problems for grid management because of its intermittent nature. Battery storage at grid scale will be essential to stabilize supply to match demand, and this will involve additional costs. Since the scale of India’s demand for batteries for grid stabilization and for electric vehicles will be huge, we need to plan systematically to attract investment in the production of technologically-advanced batteries to meet our domestic demand as well as for exports.

Substituting thermal electricity with green electricity can only work if it is cost effective. The cost of renewable power has been falling and this trend is expected to continue. The relevant cost comparison is after including the cost of battery storage needed, but fortunately, green electricity is getting competitive even on this basis.

The energy transition needed implies wide-ranging changes in many areas. It will also call for close collaboration between the Centre and states. Space does not allow covering the extent of the changes we will have to deal with, but readers interested could look at the presentation made by me and my co-author Utkarsh Patel at a webinar organised by the Centre for Social and Economic Progress (bit.ly/3lUiDH5).

What does all this imply for India’s position at CoP-26? One of the studies we reviewed, by the Council on Energy, Environment and Water, suggests that India could achieve GDP growth averaging about 6% over the next 30 years with emissions increasing for a while, peaking around 2040 and reaching net-zero by 2070. Other studies present different trajectories. Niti Aayog should be tasked with reviewing studies, consulting stakeholders, and produce a credible transition plan for consideration by the government.

An important part of the transition should be the phasing out of coal-based generation. We have 258GW of coal-based capacity, including what is under construction. If all this capacity remains on stream for the normal life of plants in India of 40 years, we will not get rid of coal-based plants until 2063. However, if we start decommissioning older plants (say, more than 25 years old) which are also inefficient, we could greatly reduce the volume of coal capacity in later years.

This transition will require massive investments. The IPCC has estimated that the developing world as a whole will need $600 billion per year up to 2050 for the energy sector alone. India will need $150 billion per year, or about 1.8% of GDP. Some of this will have to come from the central government or its public sector undertakings and some from states, but most from private investors.

This is where the international community can most effectively demonstrate its commitment to save the planet. The performance in delivering on the Paris Agreement’s promise of $100 billion per year from 2020 onwards has been poor. CoP-26 must scale up the promise and also deliver concrete results in terms of enabling and directing multilateral development banks to support all aspects of the energy transition.

On our part, we should put forward a proposed emission-reduction strategy, based on Niti Aayog’s review of available studies, and offer an emissions trajectory conditional upon a global package that includes adequate access to financing. India could show real leadership in this area.

Montek Singh Ahluwalia is former deputy chairman, Planning Commission and currently distinguished visiting fellow at the Centre for Social and Economic Progress.