Challenges and opportunities
Emissions would clearly need to peak from a climate change mitigation viewpoint. A recent study by the Council on Energy, Environment and Water (CEEW) outlines key progress indicators under alternative peaking and net-zero scenarios.
The scenarios with an earlier peak are more climate-friendly but the magnitude of the effort required is naturally greater. The commercial viability of carbon capture and storage (CCS) will also play an influential role in the pace of transition.
As the world’s third-largest emitter of carbon, India will play a crucial role in the transition towards a low carbon environment. With many major economies announcing net-zero targets, eyes are now on India to make a similar commitment.
A recent study by the Overseas Development Institute estimates India may lose up to 3-10 per cent of its GDP annually by 2100 with the poverty rate rising by 3.5 per cent by 2040 due to climate change. Heatwaves, erratic rains and rising sea levels are some of the likely causes. In other words, there are economic costs to India from climate change.
However, India’s path to carbon-neutrality will be more challenging than most given its state of development and huge infrastructure investment needs to achieve a low-carbon economy. While India has made decent progress towards decarbonisation, the transition needs to accelerate to bend the emissions curve. International support through financing and technology will in turn be key factors that influence the pace of India’s transformation.
Krystal Tan and Rini Sen are Economists at ANZ