India needs $834 billion to implement low carbon growth plans

Planning Commission report highlights huge challenge facing new government, but stresses need to act


By Ed King

India will need to invest US$ 834 billion to place its economy on a low carbon trajectory by 2030, a report published in April by the national Planning Commission reveals.

It says the country will require “massive” changes to the energy mix to lower the carbon intensity per unit of GDP by 42%, as opposed to 22%, which is its ‘business as usual’ scenario.

Coal and oil use will need to decline 20%, while gas demand will rise 10%. Solar capacity will need to be increased from 2GW to 11GW, wind from under 1GW to 118GW.

“This diverts resources from other needs, and may not be possible to sustain if the growth is not fast enough,” says the document, which was signed off by Montek Singh Ahluwalia, Deputy Chairman of the Commission.

It continues: “International help, in both finance and technology, would therefore be critical to support India’s pursuit of Low Carbon Strategies.”

But highlighting India’s acute vulnerability to climate impacts, the report says a low carbon growth strategy is “essential” and says it is in the national interest to “accelerate” UN talks on a global climate deal.

Political will

The 144-page report highlights the challenges facing any Indian government seeking to achieve high levels of growth while ensuring the country’s greenhouse gas emissions do not spiral out of control.

India already has renewable energy strategies in place, but the report highlights how these will need to be radically boosted, as will the country’s flagging hydropower and nuclear programmes.

And in a warning that could set the government on a collision course with the country’s huge extractive industries, it recommends raising the nation’s forest cover targets.

It remains unclear what the attitude of the incoming government led by Narendra Modi will be.

Elected on the back of promises to drive economic growth and cut red tape, the initial outlook for India’s climate targets look bleak, but analysts RTCC has spoken to say he is likely to promote the share of renewables in the energy mix.

This study emphasises the importance of any new administration looking at a variety of indicators other than GDP when formulating policies, if it wants to achieve what it terms ‘sustainable growth’.

“It is no longer possible to pursue growth, inclusion and sustainability as independent imperatives. Faster, sustainable and more inclusive growth can only be realised, when all these goals are pursued together, in a unified framework, as systematic components of a well thought out growth strategy,” the report says.

UN contribution

The study offers few clues to the ambition of any emission reduction pledge India could make ahead of a proposed global climate change deal, set to be signed off at a UN summit in 2015.

In 2010 the government committed to reducing emission intensity levels 20% by 2020 over 2005 levels, but has always rejected accepting any absolute emissions target, arguing it needs ‘carbon space’ to develop.

At 1.4 tCO2/person in 2010, India’s emissions are less than one third of world average of 4.5 tCO2/person, a quarter of China’s and one twelfth that of the US.

Any ambitious UN target will likely require assurances that India will gain financial support and access to key low carbon technologies, above and beyond what it has already.

In his column on the Business Standard website Indian environmental commentator Nitin Sethi argues Modi could even take a tougher line at UN talks than the Congress government he replaced.

“As of now it is not expected to take any dramatically different view of the climate negotiations than the governments before,” he writes.

“In the Parliamentary debates earlier, when in opposition, the right of centre BJP has hammered the government as much as the Left parties for deviating from the negotiating lines drawn by political consensus.”

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