India's Path to Prosperity: Balancing Economic Growth and Environmental Sustainability
India's ambition to meet the energy demands of its 14 billion people has led to increased coal and oil consumption However, the country also holds immense potential for renewable energy sources, paving the way for a greener and more prosperous future
More than 50 years ago, the then Prime Minister of India, Indira Gandhi, addressed the daunting task faced by developing nations: to achieve industrialization without causing harm to the environment.
"At one end, the wealthy criticize our persistent poverty, and on the other, they caution us against their own practices," she stated at a United Nations conference in Stockholm in 1972, marking the first global event to prioritize environmental concerns.
"We want to avoid further impoverishing the environment, but we cannot ignore the serious poverty that affects many people," she added.
Her words are more relevant than ever. The conflict between economic growth and environmental protection is central to global discussions on how to address the increasingly urgent climate crisis.
Speaking at the opening session of the COP28 climate talks in Dubai on Friday, India's current prime minister, Narendra Modi, emphasized the importance of giving all developing countries "a fair share in the global carbon budget" - the amount of planet-warming carbon pollution the world can emit and still avoid climate catastrophe. Despite the Earth heating up to dangerous levels, the UN noted that many governments continue to perceive coal, oil, and gas as sources of economic development, energy security, and geopolitical power.
The 2030 global fossil fuel production is projected to exceed the limit needed to restrict the global temperature rise to 1.5 degrees Celsius above pre-industrial levels, according to a recent report by the UN Environment Programme. India is expected to be a significant factor in this excessive production, aiming to double its domestic coal production by 2030 to meet the demands of its 1.4 billion population.
But even as the worlds most populous nation clings to coal with one hand, there are some signs that it is attempting to chart a more sustainable course with the other.
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The UNEP report highlighted India’s substantial investments and ambitious goals for renewable energy. The report noted that as the world's fastest-growing major economy, India has allocated over $4 billion in this year's national budget for the energy transition.
Other international organizations have also observed India's increasing aspirations for green energy. According to a report by the International Energy Agency in October, the country is entering a new phase of energy development with a long-term goal of achieving net zero emissions. In 2021, Modi committed to India reaching net zero emissions by 2070, which is later than developed economies but still a significant goal for the country.
Revamping India's energy sector, much like many other aspects of the country, is expected to be tumultuous and complicated. However, its impact on the worldwide energy market and efforts to curb global warming will be significant.
According to Siddharth Singh, an energy investment analyst at the IEA, if India successfully achieves its goal of reaching net zero emissions by 2070 and meets its other national targets, it could help limit the global average surface temperature rise to 1.7 degrees Celsius by 2100.
Achieving this doesn't have to hinder growth. Singh mentioned that there are already indications of a decreasing connection between economic progress and carbon emissions. According to the IEA report, if the country fulfills its commitments, its carbon emissions would decrease by more than 40% by 2050, while its GDP would increase fourfold during the same timeframe.
Modern India is yet to be built
India is the worlds third-largest energy consuming country, although its energy use and emissions per person are less than half the world average, IEA data shows.
The demand for energy is increasing rapidly due to rising incomes, with 80% of the demand being met by coal, oil, and solid biomass. The IEA predicts that South Asia will experience the largest energy demand growth of any country over the next three decades. This is not surprising given the country's expected economic milestones, as it is projected to become the world's fifth-largest economy and achieve an annual growth rate of at least 6%. By 2035, it may be only the third country with an annual GDP of $10 trillion.
Singh stated, "India's urban population is projected to increase annually for the next 30 years, equivalent to adding a city the size of London each year." This rapid growth will result in a substantial increase in the construction of residential, commercial, and retail buildings.
The Modi government is actively working to enhance domestic manufacturing, leading to a surge in infrastructure development across the country, including roads, bridges, ports, and railways. This increase in infrastructure will result in a significant rise in demand for coal and steel, major contributors to carbon emissions.
The demand for electricity is expected to increase significantly in the coming years due to a variety of factors, including improving living standards and climate change. Climate change has led to deadly heatwaves in India, resulting in a sharp increase in the ownership of air conditioners. According to the IEA, by 2050, India's total electricity demand from residential air conditioners is projected to surpass the total energy consumption of the entire African continent.
Coal accounts for almost 70% of the countrys electricity generation and is not likely to change in the near future.
A loader fills a dump truck at the coal mine, operated by South Eastern Coalfields, in Chhattisgarh.
Anindito Mukherjee/Bloomberg/Getty Images
The future of fossil fuels is a highly contested issue at COP28, with some advocating for a "phase-out" and others calling for a "phase-down" approach. India has expressed that a complete phase-out is currently not feasible, citing the need for nuclear energy and viable energy storage. R.K. Singh, India's power minister, stated that the country will not be rushed into reducing its reliance on coal.
Giant green goals
"We refuse to do this... we refuse to sacrifice power availability for our development, even if it means increasing coal-based capacity," stated the minister in November.
India's current stage of development offers a distinctive chance to avoid the environmental mistakes made by more affluent nations. Despite initial reluctance, the country eventually signed the Paris climate agreement in 2015, joining over 190 other nations in committing to curb global temperature increases to below 2 degrees Celsius, and ideally to just 1.5 degrees above pre-industrial levels.
The promised pledges have not been fulfilled yet. The world is on track to reach nearly 3 degrees of global warming, despite meeting current climate policies, as warned by the United Nations. The Modi government has established ambitious objectives.
By the end of this decade, it is promised that renewable energy will meet 50% of India's energy needs. The government has also set a target of 500 GW of non-fossil fuel electricity generating capacity by that period, which is a significant increase from about 173 GW last year.
The Adani Group's solar power panel assembly plant in Mundra, India.
Saumya Khandelwal/The New York Times/Redux
India has initiated a program to encourage domestic manufacturing in key areas such as solar modules and advanced chemistry cell batteries. If successful, this initiative could position India as a dependable exporter of solar modules, as stated in the 2023 report by the IEA. According to Singh, India already ranks as the world's fourth largest producer of wind and solar PV electricity, and is expected to become the third largest next year. In the context of its development, India's clean energy goals are certainly commendable.
If Asias third largest economy fulfills its commitments, it could pave the way for a new model of sustainable growth, one that enables developing nations to achieve prosperity while prioritizing environmental sustainability.
Green billionaires
Large corporations are eager to take advantage of the environmentally friendly opportunity. India's wealthiest individuals, such as Mukesh Ambani and Gautam Adani, are investing significant amounts of money in clean energy, despite the fact that they built their fortunes on fossil fuels.
According to Tim Buckley, director of the Sydney-based think tank Climate Energy Finance, there has never been a more opportune time for India to pursue sustainable growth. This is due to two primary factors: the global surge in investment in clean technologies following Ukraine's invasion by Russia, and the substantial decrease in the cost of solar energy.
But there remains a significant shortfall in funding. According to the IEA, energy investments must almost triple by the end of this decade in order for India to be on track to achieve its zero emission goals. The Modi government is urging wealthy nations to step up their efforts in climate financing.
Indias richest man Mukesh Ambani is investing billions into clean energy.
Dibyangshu Sarkar/AFP/Getty Images
The developed world committed over ten years ago to provide a minimum of $100 billion annually to developing countries to support their shift to sustainability and to address the challenges of the climate crisis. Despite being reaffirmed in the 2015 Paris Agreement, this goal has yet to be achieved. During his address at COP on Friday, Modi cautioned that prioritizing self-interest will only bring about global darkness.
Hopefully, India's extensive bureaucracy will take heed of that message. "We need to see more proactive measures and a sense of urgency trickling down in line with Modi's commendable focus on renewables," Buckley commented. "India must ensure that there is a coordinated effort in the implementation of these ambitious targets to ensure they are met."
