Why India needs a Green Deal

News: To address the pressing challenges of today like emission and equity, there is a need for political will and effective implementation of the Indian Green Deal.

What are the problems faced by India?

On the one hand, India is facing many extreme weather events like severe droughts in Maharashtra, incessant rains, and flooding in Chennai, and Delhi on a complete lockdown because of the pollution and many others. While on the other, dealing with an unprecedented economic crisis.

To overcome this crisis, India needs to adopt a sustainable, just, and inclusive path. If the Indian government judiciously implements the 10% of the GDP as the Atmanirbhar package for Covid recovery. If this amount is spent judiciously on Indian Green Deal (IGD), then India can stay ahead of the climate change curve.

What is the proposed Indian green deal, and how will it help?

For India to achieve net-zero targets by 2070, the beginning can be made by focusing on high carbon footprint sectors. So, 10% of the GDP should be split into three parts — 5% for infrastructure development, especially rural infrastructure; 3% for the care economy; and the remaining 2% for green energy.

Jobs: The IGD will help to absorb not only the unemployed but also have the potential to generate extra jobs. If the amount committed to green energy in IGD was spent on the fossil fuel sector, it would have generated only 2.4 million jobs. But the green economy is a Win-Win as that would have generated 8 million jobs.

Curb carbon emissions: The green energy programme would result in curbing India’s total carbon emissions by 0.8 gigatonnes by 2030 as compared to the projections based on the Stated Policies Scenario (STEP) by the International Energy Agency (IEA). This program has two components – efficiency and clean renewable energy. Energy efficiency is important as India’s energy intensity is very high and can result in a saving of almost one-third of the energy.

How should India finance the initiative?

The real challenge is financing, as making available 10% of GDP for 10 years is difficult for a developing country. There are two ways to finance this – taxing the elite or a global transition package from the greatest emitters.

For example, India’s carbon emission stands at 3% as compared to the USA is 25%. This global inequality can be addressed by the global carbon tax settlement process which may yield about $270 Bn for India.

At the national level, the richest 10% of Indians emit five times more than the poorest. This inequality can be addressed by making a revenue-neutral policy where taxes are increased on luxury items, belt and inheritance taxes, carbon tax etc. To compensate for the regressive nature of carbon tax, carbon dividends like free electricity, free ration can be given.

Source: This post is based on the article “Why India needs a Green Deal” published in Indian Express on 17th January 2022.