With the ongoing rate, India’s net Green House Gas (GHG) emissions will rise to 11.8 gigatons of carbon dioxide equivalent by 2070 from the 2.9 gigatons in 2019, Mckinsey & Co said in a report.
However, India has the potential to create 287 gigatons of carbon space for the world if it accelerates its efforts to fight climate change, the report said, adding that this amounts to almost half of the global carbon budget for an even chance at limiting warming to 1.5 degree celsius.
“India’s decarbonisation will require an estimated USD 12.1 trillion (5.9 per cent of GDP) of green investments until 2050 for the ‘accelerated’ scenario,” it said.
Mckinsey said there are tailwinds which would be of help to a country like India, including reducing costs of renewables, electric vehicles and progressive policies.
However, there are challenges as well, including renewable capacity addition of 10 GW increasing to 40-50 GW per year, and the reduction needed in battery and hydrogen costs, it added.
The consultancy firm said over 80 per cent of India of 2070 is yet to be built, and underlined an urgency to act in the ongoing decade for the right kind of investments to come in 2030s and 2040s for an orderly transition.
It said India can cumulatively have USD 1.7 trillion forex savings till 2070 from reduced energy imports of crude oil and coking coal if it transitions well.
The country can also become a manufacturing and research and development base for cleantech, including electric vehicles, batteries and electrolysers, it said.
The firm’s senior partner Rajat Gupta said the benefits of a well-planned, orderly, accelerated transition would outweigh the downsides, given India’s growth outlook.
“But it would require the nation to act within this decade, using its growth momentum to build India right for the decades thereafter,” Gupta said, adding that while the actions can seem to be challenging, the journey is doable as most of the actions are economically viable.
The firm also suggested a ten-point agenda for accelerating the de-carbonisation, starting with laying out a detailed medium-term decarbonisation plan with sector-specific priorities and policy frameworks that provide the demand signals and a steady hand.
It also suggested the acceleration of the implementation of Compliance Carbon Markets within three years, enabling banks to support the transition catalysed by a green transition bank, higher adoption of renewables in the power sector and empowering a nodal authority to define a national land-use plan.
The consultancy also exhorted corporates to play on the “front foot”, evaluate investment opportunities that these green trends will unlock and align with India’s national plans or opportunities opened by decarbonisation of other countries.
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