Challenges to India’s Climate Goals

Source: This post on the Challenges to India’s Climate Goals has been created based on the article “India’s climate goals: Navigating a complex dilemma” published in “Business Standard” on 13^th January 2024.

UPSC Syllabus Topic: GS Paper 3 Environment – Conservation.

News: The article discusses the challenges in front of India, especially its electricity policies, in transitioning to non-fossil energy. It also highlights other negative outcomes of India’s electricity policies.

A detailed article on UNFCCC COP28 can be read here.

The 2023 UN Climate Change Conference (COP28) concluded with a statement calling for the phase-out of fossil fuels.

However, achieving these climate targets will be difficult without immediate and decisive action by India, the world’s third-largest greenhouse-gas (GHG) emitter. India accounted for 7.6% of global GHG emissions in 2022.

What are the challenges in front of India in transitioning to non-fossil energy?

1. Taxation Policy on Petroleum Products: India reduces taxes on petroleum products when global prices increase and raises them when prices drop (countercyclical taxation). This resulted in a low effective carbon price in India. Lower prices prevent shift to costlier renewable sources.
2. Electricity Pricing and Subsidies: Electricity, which accounts for 34% of India’s emissions, is heavily subsidised in India (Subsidies mean fossil energy appears artificially cheaper than it actually is).
3. Difficulties in Reforming Electricity Pricing: Reforming electricity pricing is difficult as electricity prices are not set by one central authority, but by the states and UTs. Additionally, the expectation of subsidised power has become part of the country’s politics.
4. Lack of Clean-Energy Investments: Heavy subsidisation strains state governments’ finances – which prevents clean-energy investments.

What are the negative outcomes of India’s electricity policies?

1. Depletion of Water: In agricultural regions, it has contributed to the rapid degradation and depletion of water resources.
2. Health Issues due to Emissions: Reliance on fossils (such as coal) for power generation causes severe pollution-related health problems.
3. Populism leading to even more Subsidies: In Indian politics, the popularity of electricity subsidies as a tool for winning elections may lead to competitive populism between state governments, leading to even more subsidies.

What should be done?

1) For the transition to renewables to be economically feasible, renewable energy and storage must be cheaper.

2) International financial support will be required for renewable energy and storage projects in developing countries.

Question for practice:

Transitioning to non-fossil energy for India would be an uphill task. Comment.