Three challenges that need to be managed to make net-zero emissions a reality in India

Joint opinion piece by Kevin Rudd, Ban Ki-moon and Arvind Panagariya.

India's decision last year to step up its climate action and commit to net-zero emissions took the world by surprise. But it is also squarely in the country's own interest. And should the Narendra Modi government enhance its climate leadership in the coming years, these benefits could be maximised for the Indian people.

India now aims to reduce the emissions intensity of its economy by 45% by 2030 and reach net-zero by 2070. Driving near-term reductions in India will be a shift to 50% non-fossil power generation capacity by 2030, including the build-out of 500 GW of non-fossil sources. These are welcome initiatives.

How India chooses to act on climate is a very big deal. If the world's third-largest polluter drops all 'ifs', 'ands', 'buts' and - despite its low per-capita income - wholeheartedly joins the global effort to save the only planet we have, it is bound to capture the imagination of those countries that remain sitting on the fence. Formally submitting India's targets to the UN will, therefore, be important.

Opportunity in Extremity
And the opportunity is there to be seized. Depending on the decisions taken in the next few years, reaching net-zero by 2070 could boost the Indian economy by as much as 4.7%, or $371 billion, by 2036, according to research by Cambridge Econometrics commissioned by the High-Level Policy Commission on Getting Asia to Net Zero, a body convened by the Asia Society Policy Institute. It would also create as many as 15 million additional Indian jobs by 2047.

But in a fast-growing economy battling multiple crises - poverty, food and water stress, weather extremes, air pollution - the transition, obviously, must be shaped to support just and sustainable development. This means a series of challenges will need to be managed.

Access to finance is a big one. Getting India to net-zero by 2070 requires around $10 trillion in economy-wide investments, according to the same modelling. International finance would free up Indian resources to mitigate negative impacts on product prices and household consumption.

Jobs are another one. While the transition will create more jobs, inevitably, some will need to transition. These workers will need support to learn new skills - and find jobs within their communities - to avoid being left behind.

India can get ahead of these challenges now by showing international investors just how serious it is about fulfilling its climate commitments. This will de-risk finance, supercharge India's transition and make India more resilient. To do so, GoI will need to constructively overcome three main obstacles:

Ensuring a just and equitable transition. Workers, businesses and local governments that currently depend on fossil fuels for profit will need to be supported to adapt and thrive in a net-zero economy. A national action plan could ensure that clean energy and infrastructure projects, and the value chains driving them, benefit the people who stand to lose out otherwise. This also includes investing in adaptation and resilient infrastructure, which could further supplement economic gains.

Addressing technical challenges to the transition, including infrastructure upgrades and carbon pricing regulation. For example, India's commitment to instal 500 GW of clean power generation by 2030 requires massive investments in solar, wind and other renewables, plus upgrades to transmission and distribution grids. India could leverage blended finance to reduce both investment risks and the costs of solar mini-grids. And investing in a robust monitoring, reporting and verification system could ensure credibility as India moves toward carbon pricing to make it an effective incentive for cutting emissions.

Tapping into economies of scale - including India's large population and growing clean technology production - to create a global low-carbon manufacturing hub. India has already launched initiatives to promote the manufacturing of solar photovoltaic modules and green hydrogen, which could, in turn, drive the shift to clean steel, cement and aluminium production. This could enable India to tap into markets being shaped by strict climate policies, such as the US under the new Inflation Reduction Act and the EU with its proposed carbon border adjustment mechanism.

Showcase Green Timetable
The time is ripe for India to formalise and implement its 2030 and 2070 emission targets, and to continue to strengthen them. As host of both the G20 and Clean Energy Ministerial in 2023, India can showcase its action and encourage other countries to follow suit, cooperate and invest.

In the coming years, India will likely find it hard to compete for finance with other Asian economies eyeing net-zero emissions like Japan, South Korea and China. Meanwhile, the impacts of climate change and pollution will continue to hamstring development. Seizing these opportunities and grappling with these challenges could help with that.

The benefits for further and faster action in India are compelling. The independent research commissioned by the High-level Commission shows that despite the domestic challenges, stopping new coal-fired power projects now and ending unabated coal power use by 2040 would be the most effective means of reaching net-zero closer to the mid-century. And doing so could lead to an even greater economic boost of up to 7.3%, or $470 billion, and 20 million additional jobs by 2032.

So far this year, record-shattering heat led India to ban wheat exports, causing international prices to rise, while workers sweltered in factories and industrial activity was paused to manage power shortages. Elsewhere, heavy floods disrupted bus and train services, led schools to close, heightened the risk of disease outbreaks and caused power outages. Meanwhile, rampant air pollution is cutting the average Indian life expectancy by six years, and as many as 13 in Delhi, and costing $95 billion a year.

Net-zero is India's route to healthy, sustainable and just development. For India, there is no better moment to seize than today.