Why has India, over the past year, essentially abandoned its traditional approach of pitting clean energy and climate action against development in favor of preparing an aggressive effort to decarbonize its economy? I believe there are four key reasons.
First, the impacts. India, which houses a third of the world’s poor, will be at the frontline of climate change impacts as floods and droughts become more frequent and deadly, and yields for most crops decline. The 2009 monsoon season was a harbinger, bringing rains six times their normal volume and causing the worst floods South India has experienced in over a century. Shifts in temperature and precipitation patterns could trigger major repercussions for India’s agricultural sector. Temperature increases of as little as 0.5–1.5 degrees Celsius might trim yield potentials for wheat and maize by two to five percent. Ambitious global action to reduce the emissions that fuel climate change is very much in India’s interest.
Second, the politics. India wants to establish itself as a leading diplomatic player and a responsible global power, and to avoid always playing second fiddle to China. Leadership on climate change provides one pathway to this goal. Domestic politics also dictate that India improve its energy security in the face of soaring fossil fuel imports by developing alternatives. Today, coal and oil provide the umbilical cord for India’s energy supply, fueling 87 percent of all power and electricity. However, deployment of renewable energy, especially wind, is rising rapidly. And the government also has ambitious plans to boost nuclear power from its current three percent of installed electricity capacity, though it should be cautioned that similar plans over recent decades have failed to materialize.
Third, poverty reduction. Approximately 400 million rural Indians lack electricity and, for many, extending the national grid is prohibitively expensive. Enter distributed generation in the form of community-based, self-sufficient biomass and solar power. As the prices of these clean alternatives decline, distributed generation will increasingly become the obvious choice, not only for meeting basic household needs, but also for improving the productivity of businesses owned and operated by the poor, especially in rural areas. Moreover, clean energy can create new jobs, companies, and markets that can help stimulate more inclusive and sustainable growth in India.
Fourth, and perhaps most important, the economics. India is realizing that green energy can be cheap energy. The upfront costs of making buildings more efficient or switching to electric, two-wheel vehicles are outweighed over time by lower operational costs, producing a net economic as well as environmental benefit. Beyond that, India’s governing elite and many in the corporate sector see a big opportunity in the emerging, clean-energy market. Ashutosh Pandey, chief executive of Emergent Ventures India, one of the country’s largest consultancies, says his firm is diversifying into advising companies on investing in energy efficient technologies and renewable energy resources. “Companies see sustainability as a core issue now, and not just CSR [corporate social responsibility],” he told the Hindustan Times. “We are helping formulate many strategies around this. We are also investing in renewable energy within India, which is easily one of the most attractive markets today.” In the race to produce low-carbon products, India is also well placed to occupy a specific niche: namely, leveraging its ability to manufacture products cheaply, sometimes known as frugal engineering. India has a track record in developing $2,000 cars (the Tata Nano), $30 cataract surgeries, and most recently a $35 prototype tablet computer. Its entrepreneurs could equally turn their talents to creating cheap clean energy products to serve both the massive domestic market and other emerging economies.
India’s Green New Deal