India is at risk. With a coastline of more than 7,000km and a Himalayan landscape of over 2,000km, India ranks high on the global vulnerability index for climatic disasters. In the last two decades, we have witnessed over 400 disaster events, resulting in a death toll of over 200,000 people and estimated losses of over $200 billion. The impacts have only worsened in the last two years, compounded by the pandemic.
While we continue to embrace decarbonization goals despite these perils, the global energy crisis created by the Ukraine War still looms large over the economy. The war has led not only to an increase in global crude oil prices, but also the diversion of multilateral aid originally earmarked for climate finance for developing nations. It is therefore only logical that our global position on climate change would be underpinned by the need to prioritize our own energy security while also driving global efforts towards climate action.
From Glasgow to Sharm El-Sheikh: Last year, CoP-26 had issued a clarion call for all countries to “phase down" the use of fossil fuels. Global emissions rose by 6% in 2021 to their highest level ever, as the world economy rebounded strongly from the covid crisis and relied heavily on coal to power that growth.
India aims to enhance its non-fossil energy capacity and meet 50% of its energy demand from renewables by 2030, but in the short term it has relied on imports of subsidized coal. India’s ‘Panchamrit’ goals also include reducing total projected carbon emissions by 1 billion tonnes and carbon intensity of the economy by 45% by 2030, over the 2005 levels.
However, this low-carbon transition comes with a colossal price tag. For example, to meet its 2030 renewables capacity target alone, India needs an investment of $250 billion. The massive financing needed to achieve these climate goals warrants tapping into multiple resource pools.
There have been several laudable initiatives by the government to bridge this gap. For example, the upcoming national emission trading system and sovereign green bonds are great opportunities to channelize green finance towards climate mitigation.
The Union Budget for 2022-23 prioritized the transition towards a circular economy. With an allocated expenditure of over $80 million on green recovery packages, a production linked incentive (PLI) scheme could open up green job markets in domestic manufacturing of solar energy and green hydrogen.
The Reserve Bank of India recently joined the Network for Greening Financial Systems (NGFS), a move that is expected to create significant momentum across lending institutions around minimizing climate-induced financial risks. This will inevitably push corporate houses to track their climate action more closely and make more robust climate disclosures.
In fact, through targeted action and policy nudges, corporate India can play a greater role in meeting India’s climate financing gap. Indian industry generates corporate social responsibility (CSR) funds upwards of ₹30,000–35,000 crore in a year; however, funds directed towards climate change and the environment form the lowest share of CSR spending. With an appropriate push from the ministry of corporate affairs under the CSR Amendment Rules, these funds could be funnelled towards adaptation and community resilience projects while ensuring corporate environmental responsibility towards society.
According to a recent World Economic Forum-PwC report, businesses need a climate strategy that integrates climate-change adaptation and net-zero transformation and mainstream resilience considerations into business decisions, and make comprehensive and clear climate disclosures.
India also needs to expedite the adoption of green technologies to transition towards decarbonization in hard-to-abate sectors. As we look to the West for green technology transfers, our homegrown startup ecosystem also promises to accelerate India’s net-zero path by bringing in innovative low-cost solutions; for example, waste management technology and renewable energy-powered transportation.
Startups also provide affordable climate-tech innovations to solve complex problems; for example, helping governments set up early warning systems, helping corporates monitor their emissions, and nudging consumer behaviour towards making climate-conscious choices during online purchases.
While the government’s Startup India platform provides a solid launch pad for such innovators, large corporations can also drive accelerator programmes to help scale up affordable climate tech to solve Indian problems.
India at CoP-27: At this year’s CoP, India has assumed the strategic theme of promoting individual responsibility towards climate action through its Mission LIFE (‘Lifestyle for Environment’). This movement aims to transform individuals into pro-planet people by having them adopt sustainable lifestyles and minimize their carbon footprints.
While leadership summits are over and as climate negotiations continue over the next few days to lay out a blueprint for climate action by nations, it is expected that India will continue its focus on creating a regional consensus for positive climate action and avenues for leveraging new technology. In particular, the country will push for adaptation themes such as loss-and-damage financing, building back better with resilient infrastructure and communities, nature-based solutions, regional cooperation on extreme weather data, and early warning systems.
Climate change, after all, is a global crisis—one that can only be solved through concerted action by nations and people.
Sanjeev Krishan & Sambitosh Mohapatra are, respectively, chairman and leader-ESG, PwC India
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