Number Theory: Four charts which explain India’s Net Zero Emission challenge

The world marked zero emissions day on the September 21 to raise awareness on greenhouse gas (GHGs) emissions that lead to the climate crisis. It came within months of the release of the latest IPCC Climate Change 2022 report, which signals a Code Red for humanity. The findings from the report suggest that human activities are unequivocally responsible for a warming climate and, if drastic action is not taken, the world will soon reach a point of irreversible damage. The timing of the report could not have been better. Just five months before the release of the report, in November 2021, 140 countries, including India, made a pledge to reach net zero emissions at the 2021 United Nations climate change conference in Glasgow, also known as COP26.

India made a five-point commitment in its pursuit of achieving net-zero emissions. By 2030, it aims to increase the non-fossil energy capacity by 500 GW, fulfil 50% of its energy demand with renewable energy, reduce 1 billion tonnes of CO2 and decrease carbon intensity to less than 45%. It further aims to achieve the target of net-zero emissions by 2070. Can India achieve these targets? Here are four charts that explain what it will take to meet this challenge.

Business as usual will not do

India is currently the third-largest emitter in the world behind China and the US, and eight-largest when historical emissions are taken into account (Carbon Brief, 2021). Figure 1 shows the trend in its annual CO2 emissions since 1850 and the projections till 2030 under a scenario of current climate actions and policies. In 2019, India’s total annual CO2 emissions was 2.63 billion tonnes, which is projected to reach close to 4 billion tonnes in 2030. To put this into perspective, the country has to emit a maximum of 0.4 billion tonnes of CO2 in the next decade to meet its 2030 commitment. This seems unlikely under the current climate action and policy scenario given that the average growth rate of CO2 emissions in the past decade was 5%.

Number Theory: Four charts which explain India’s Net Zero Emission challenge

What is the biggest source of GHG emissions in India?

One of the main drivers for historical emissions in India, and globally, has been the use of carbon intensive sources for energy production. Figure 2 shows the contribution of various sectors and industries to GHGs. The largest single source of greenhouse gas emissions is the fossil fuel industry, or the burning of coal, natural gas and oil for electricity and heat production, transportation and in industrial processes (chemical, metallurgical, minerals), accounting for 73% of total GHG emissions in the country. About 23% of GHG emissions come from the agriculture, forestry and land-use sector, which are mainly in the form of crop and livestock cultivation, crop burning, manure and deforestation. Finally, only 4% of the greenhouse gas emissions come from other energy sectors such as fuel extraction, refining and processing.

Number Theory: Four charts which explain India’s Net Zero Emission challenge

India lags behind major countries in share of renewables in total energy production

Transitioning to a net-zero world will require structural changes in the economic processes of production and consumption. The energy sector holds the key, as it is the source for more than 70% of the total greenhouse gas emissions. Replacing fossil fuels with renewable energy and increasing the share of renewable sources in energy production offers a way forward. Indeed, most of the countries historically responsible for cumulative CO2 emissions (the UK, the US, Germany, China) have all taken massive strides in this direction by opting to invest in clean energy technologies in the last decade (see Table 1). For India to follow suit, it will have to overcome the dual problem of increasing its investments in clean energy and efficiency, while at the same time gradually phasing out fossil fuels from its energy basket.

Number Theory: Four charts which explain India’s Net Zero Emission challenge

Bridging this gap requires a boost to current pace of addition of renewable energy capacity

In the light of this discussion, a policy imperative to realize carbon neutrality is to emphasize transition to renewable energy and decarbonize the energy sector. It can be noted that India aims to achieve a renewable energy target of 175 GW by 2022) and 450 GW by 2030 in the total energy mix (IEA 2020). In this target, the short-term goal of renewable energy (RE) of 175 GW comprises 100 GW of solar, 60 GW of wind, 10 GW of biomass-based, and 5 GW of small hydropower power plants, which is equivalent to 21% of total electricity production. However, Table 2 below clearly indicates that the country falls behind the short-term target with cumulative achievement of renewable energy at 116 GW as on August 31. If production of renewable energy continues at the abysmal rate which is given for five months (April-August 2022), then the total annual renewable energy production on average would only be 14,860 MW (14.8 GW) for the current year.

Number Theory: Four charts which explain India’s Net Zero Emission challenge

The country, therefore, needs to aggressively pursue RE production through various mechanisms such as a well-developed market structure and financing instruments for RE, strengthening technological infrastructures, creating enabling framework to incentivise private capital flow into the renewable sector, and so on. Production of renewable energy should be pursued as a separate objective and not merged with the larger umbrella of power sector where funds for RE would be crowded out by loans earmarked for conventional power projects.

Kedar Kulkarni and KC Adaina teach economics at Azim Premji University