[ad_1]
Although India’s per capita emissions are relatively low (1.8 tonnes of CO2e per capita), it is still the third largest single emitter in the world. India has pledged to reach net zero by 2070. This goal cannot be achieved without urgent action during this decade, and could be accelerated by India’s recent ascension to the G20 presidency. Reaching net zero could also benefit India through lower energy costs, enhanced energy security and growth in future industries.
This is not easy. On the current trajectory, India’s emissions are set to increase from 2.9 GtCO2e per year to 11.8 GtCO2e in 2070. According to a recent McKinsey report, to effectively decarbonize he down to 1.9 GtCO2e by 2070, India will need to spend a total of $7.2 trillion on green initiatives by 2050. technology adoption.
A deeper decarbonization — an “accelerated scenario” that brings emissions to just 0.4 GtCO2e, or close to net zero, by 2050 — will require a total of $12 trillion in green investment by 2050. Under this scenario, India could produce 287 gigatonnes (GT) of carbon. This is almost half of the global carbon budget, giving us an equal chance of limiting warming to 1.5 degrees Celsius.
Decarbonization will change many things, from how we source energy to how we manufacture materials. From how to grow food to how to move around. From how to dispose of waste to how to use land.
An orderly transition to net zero could help decarbonise India and create a growth engine. To give just one example, India could save as much as $3 trillion in foreign exchange by 2070 if it transitioned to a predominantly renewable (and hydrogen) based energy and materials system (mainly crude oil and coking coal). ). Although the investment is large, most of the reduction projects are in-the-money.
This is because India is in a special place. Three quarters of India’s buildings, infrastructure and industrial capacity in 2050 are yet to be constructed. You have the choice to invest in today’s technology or invest in the future. Investing in the future requires India to take urgent action on regulation, technology development and technology adoption in this decade to make the right investments.
This is what India has done before. In renewable power, good policies, strong institutions and industrial capacities built over the past decade have provided India with a platform to scale up by a factor of 4-5 in this decade. India has other advantages as well. For example, a high tax on motor fuel equates to an imputed carbon tax of $140 to $240 per tonne of carbon dioxide. This allows electric vehicles to compete with petrol and diesel vehicles and explains the recent rapid growth of electric two-wheelers.
Such an ‘orderly’ transition for India is not only desirable but necessary. The risk of chaotic migration is significant. Consider the recent predicament due to coal shortages as demand rebounded after the pandemic. We outline four rarely-discussed ideas for an orderly transition in India.
Develop a 5-, 10-, and 25-year national decarbonization plan. High-emission industrial assets like steel mills cost billions of dollars to build and operate in his 30 to his 50 years. Green routes require a higher upfront investment and can also result in higher overall costs. Still, policies that enable carbon prices or blending mandates can make the economy viable. Such policies need to be maintained steadily and require coordination across sectors such as power, hydrogen and steel. A national decarbonization plan will enable timely investment decisions. Failure to act now to develop and deliver such a plan will result in more fossil fuel-driven infrastructure being built and India being locked into higher emissions for decades to come. Without a decarbonization plan, companies may not invest enough in capacity building for fear of being stranded later, leading to shortages, inflation and increasing import dependence – a chaotic transition.
Next, define the country’s land use plan. India risks running out of land for her twin goals of growth and decarbonisation. For example, McKinsey estimates that renewable power and forest carbon sinks will require an additional 18 million hectares of land. India needs to maximize barren land for renewable energy, urbanize vertically, improve agricultural productivity and increase forest density. This forms the case for establishing a national authority to set land use guidelines in consultation with the states.
Third, accelerate compliance with carbon markets. Carbon pricing creates demand signals that accelerate emissions reductions, especially in hard-to-reduce sectors. Let’s illustrate this with steel, whose demand could increase eightfold by 2070. Much of the new production capacity could now be added using high-emission coal. Carbon emission prices make more expensive raw steels competitive with high emission steels. For example, a carbon price of $50 per tonne could make green steel more cost-competitive by 2030, leading to the potential for low-emission technologies to create his next 200 million-tonne capacity. .
Companies can aim to play at the forefront by investing in opportunities in recycling, hydrogen, biomass, electrolyzers, rare earths, battery materials and battery manufacturing. Some of these opportunities take time to mature. On the other hand, companies can invest in opportunities opened up by the decarbonization of other countries, such as exporting green hydrogen derivatives such as ammonia.
India needs imagination, realism, determination and a sense of urgency to forge an orderly path to net zero. In this decade, we must prepare things, build momentum, and take steps to build India right for the next generation.
Gupta is a senior partner and Unni is a partner at McKinsey & Company in India. They are co-authors of Decarbonizing India: Charting a Path to Sustainable Growth.
[ad_2]
Source link
