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India’s starting position in the race to reach net zero is not comparable to the fiscal space of the four leading economies of the world, including the European Union (EU), Japan, the USA, and China, but it stands out in the ability to position itself well in the industrial era, according to a report.
The new report “Competing in the New Zero Carbon Industrial Era” prepared by the think tank Strategic Perspectives compares the performance of the five major economies- the US, China, Japan EU and India on zero-carbon technologies. The report shows that the net zero transition policies have significantly strengthened competitiveness, energy security and future economic prosperity.
Details of the Report
It also points out a few positive development points that indicate and display that India is on the right track in the race to net zero emissions. According to the report, the first point is that India is among the few countries that are on track to meet its Nationally Determined Contributions target, but it will need to invest heavily in USD 12.7 trillion to reach net zero emissions by 2050.
India remains the fastest-growing economy in the world, especially after the economy of China slowed down the pandemic, and this made India reach fifth place among the world’s leading advanced economies. Secondly, India is making progress in incorporating solar and wind into its electricity generation, almost doubling its share from the 2017 figures, which is 5 per cent to 9 per cent.
Thirdly, the electric vehicle industry is expected to grow at a compound annual growth rate of 49 per cent between 2022-2030, creating 5 million jobs by 2030. Fourthly, pro-transition policies like the Energy Conservation Act are giving input to the investors and the industry. As far as the international public financial flows in concerned, India was the top nation for two years (USD 2.9 million) and 66 percent for solar energy, as the report states.
While China and the EU continue to dominate the wind sector, the US and India are closely following each other in terms of manufacturing capacities and can continue to get the market share as their domestic policies are implemented. The report adds India cannot be compared on equal footing with other economies given its entirely different entry position on economic development.
India’s G20 and Energy
During this G20, India is likely to push for the green development agreement, which will include climate finance, LIFE circular economy, accelerating the Sustainable Development Goals (SDG), energy transitions and energy security.
The G20 is a moment where India and its strong presidency can set up a chance to seize the democratic dividend and herald its emergence as an economic power of the future. It will be a USD 3.7 trillion-dollar economy in 2023 and maintain an edge over the United Kingdom (UK) as the fifth largest economy in the world.
Regarding India’s position towards reaching its green goals, Aarti Khosla, the Director of Climate Trends, has expressed Coming ahead of the G20 analysis is a comprehensive assessment of policies and sentiments towards sustainable green technologies. The significant progress in India towards the green goals shows the commitment to scaling up renewable energy and implementation across several environmental policies and wins in energy efficiency.
As a country that will witness massive industrial growth over the next few decades, it must focus on several areas, such as innovation, research and development, as well as creating an environment that draws in investments and reduces dependency on China. Breaking down sectors where clean technology can be game-changing and ensure the upskilling of the systems and workforce is what will ensure real energy transitions.
As the role of the G20 Presidency, it has the responsibility to balance its role to lead this growth and the transition agenda amidst the geopolitics to ensure that it can be the voice of the Global South.
Views of Energy Experts
Vibhuti Garg, the director of South Asia in the Institute for Energy Economics and Financial Analysis, said that India is looking at massive requirements of the deployment of renewable energy for the decarbonisation of not only the power sector but also the government has big plans for adding electric vehicles and also promoting green hydrogen as a clean energy solution for transport and other industries.
“Traditionally, India has been relying on imports of fossil fuels and now, with renewable sources of energy, relying on imports for the downstream supply chain. The focus is on changes, and we as a country, are building a huge base for the domestic manufacturing of modules, cells, wafers and batteries, along with electrolysers etc. India would need access to the best in technology and for building the supply chain to improve the efficiency of the products and access to low-cost financing, Garg said.
In a world where one lead or risk being left behind, manufacturing zero-carbon technologies turns into a precondition for industrial growth, innovation and competitiveness. Zero-carbon technologies have the potential to replace fossil fuels faster than some might realise.
This means that setting ambitious phase-out dates at COP28, as well as domestically, is not something merely aspirational but rather a reflection of the direction in which major economies are going. Targeted financial support or new economic partnerships are crucial to ensure all countries can join the technology race and afford a just energy transition, he added.
Neil Makaroff, Director of Strategic Perspectives, said, “The net-zero industrial race between major economies is on. China’s industrial leadership has proven successful in driving growth and job creation, prompting the US to launch the IRA. Countries that miss the train on the net-zero transition will likely lag behind in industrial development, remaining heavily dependent on costly gas, oil and coal. While Europe is rapidly deploying renewables, heat pumps and electric vehicles, it cannot rest on its laurels.”
“To maintain its position in the global race to net zero, it is time to turn the European Green Deal into a major reindustrialisation plan. Building factories for solar panels, batteries, and heat pumps will not only secure Europe’s net-zero transition, it will also create quality jobs,” he added.
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