The eagerly awaited ‘Intended Nationally Determined Contribution’ (INDC) from one of the world’s biggest emitters has signalled that India is open for business with clear call for climate justice. For corporations and investors it provides pathways to channel their hard-earned money towards a cleaner future. CDP, together with other We Mean Business Coalition partners, welcomes the government of India’s measure to lay down a roadmap that help industry plan for the future in this rapidly growing economy.
As one of the fastest growing economies, India’s most effective contribution to climate change is to steer clear of the high carbon growth path. This can be attained through a sustainable development-led approach that promotes development and climate gains simultaneously. Many experts have highlighted that while energy use and emissions will invariably grow, they will do so at a decreasing rate as we ‘bend the curve’ of emissions by focusing on actions in specific sectors.
The INDC addresses these effectively and have done a commendable job in steering the development juggernaut away from high-carbon pathway. Its main components are:
- Reduction emission intensity to GDP target of about 35% by 2030 from 2005 levels
- achieve 40% commutative electricity installed capacity from non-fossil fuel based energy sources by 2030
- create of carbon sinks of 2.5 to 3 billion tonnes of CO2 equivalent through additional forest and tree cover by 2030
- Better adaptation with climate resilient agriculture and water conservation.
These broad outlines along with preparatory work done by various government departments bode well for the future. The government has calculated that it will require approximately $2.5 trillion at current prices meet these targets besides access to new technologies. This where the global cooperation will be tested.
A key component of the shift to a low carbon economy will be ‘Shifting the trillions’. The Copenhagen pledge of 2009 to mobilize US$100 billion per year by 2020 is key to build the trust necessary for a strong Paris Agreement. The We Mean Business coalition of global businesses and investors have pledged their part to leverage private climate finance. But minimizing dangerous climate impacts will require shifting trillions of dollars into low-carbon, climate-resilient investment. To accomplish this, we will look to the Paris outcome for clear policy signals such as carbon pricing, and partnerships with the private sector to reorient broader financial flows.
Over the years top companies reporting their emissions to CDP India have ably demonstrated their ability to decouple business growth from carbon emissions. Indian companies, along with their global peers, have overwhelmingly said that they are in favour of a global deal. More than 800 of the largest listed companies around the world favour a global commitment to tackle climate change, including 27 Indian entities. With INDCs in place, the pathways are better lit and, hopefully, the Paris agreement will illuminate them further.
It is remarkable that the central theme of the India’s INDC reflect the key message of the New Climate Economy (NCE) report published this summer which shows that the decarbonization of our global economy is possible at the same time as securing growth. The report Seizing the global opportunity: Partnerships for better growth and a better climate makes recommendations to achieve 96% of the greenhouse gas emissions reductions needed by 2030 to keep global warming under 2°C. This game-changing result can, however, be achieved only with international cooperation from policymakers, business, investors and other stakeholders.
India business associations like CII and FICCI have stated clearly that business have a key role to play, but are calling for a clear signal from the government. It bears noting that by 2030, given at the current rate of growth, India’s infrastructure will need to be tripled to keep pace. The moot question is whether this will be on a low carbon trajectory or business as usual.
International evidence shows there are clear benefits to green development. CDP’s Climate Performance Leadership Index, consisting of companies taking the strongest climate action, has outperformed the Bloomberg World Index of top companies by over 9 per cent over the past four years. And 53 of the Fortune 100 companies are together saving $1.1 billion annually by investing in energy efficiency, renewable energy and emissions reductions. FICCI has established a new “green bond” working group to examine how the country’s debt markets can enable the financing of smart infrastructure.
The present Indian government has dramatically up scaled its renewable energy target to 175 GW in the next seven years. Simultaneously India has been proactive to shepherd together the global community of ‘solar countries’ with over a 100 countries set to join PM Modi’s and his sunshine band in November just before the historic COP21 at Paris. It is proposed to launch InSPA (International Agency for Solar Policy & Application), a conglomeration of sunshine countries represent all major developed and developing economies between the tropics of Cancer and Capricorn, including China and Australia.
With the release of INDC, India has laid down a clear intent to act on climate change which will go a long way to dispel any notions of it being a reluctant participant. As a country profoundly vulnerable to climate impacts, an effective global climate agreement that promotes climate justice will help protect millions of rural farmers dependent on rainfed agriculture. As a rapidly growing economy, starting from a low economic base, India’s steer towards a greener path of development will provide new opportunities for business and help in safeguarding the planet.