Nearly a month since the COP26 climate summit began in Glasgow, England, many unanswered questions remain. For starters, it’s now quite clear that Prime Minister Narendra Modi’s announcements at the COP have not been converted into India’s new NDC (Nationally Determined Contribution) towards mitigating climate change.
Each of the announcements that Modi made at the summit were landmark ones for a developing country like India: generating 50% of its energy needs through renewable energy (RE) by 2030, 500 GW of installed non-fossil fuel energy capacity by 2030, reducing the emissions intensity of India’s GDP by 45% (from 2005 levels), also by 2030. India also set an absolute target of reducing carbon emissions by one billion tonnes by 2030.
Perhaps the one aspect of Modi’s speech that wasn’t paid as much attention was the demand for $1 trillion in climate finance from developed nations to aid this transition. As we know, with regards to climate finance, COP26 was ultimately a failure. The shortfall in $1 billion per year finance promised by rich countries not bridged. Important decisions on developed nations providing compensatory finance to poorer countries for loss and damage, as well as those related to adaptation finance, were set aside for at least another year.
In this context, it might be unlikely that India will actually turn Modi’s announcements into its revised NDC until these issues of finance are resolved. Outside the COP process, there have been some moves to provide India with climate finance. In early September, the Bloomberg LP-led Climate Finance Leadership Initiative (CFLI) India was formed to channel private investment to help India reach its climate goals. The CFLI envisages a shortfall of $649 billion in climate finance and hopes to plug that gap. A few days ago Germany announced new commitments worth over €1.2 billion to India by way of climate finance.
But such commitments might be far from providing the necessary quantum of finance. On 12 October, the Delhi-based climate policy organisation Council on Energy, Environment and Water (CEEW) released a report that broadly surmised that the earliest feasible date for India to reach net zero emissions was 2070. This was echoed in Modi’s speech when he set the same year as India’s net zero target.
Now, according to a new study released by CEEW on 18 November, India would need cumulative investments of $10.1 trillion to achieve this net zero target. “Our analysis finds that a transition to net-zero emissions would require mammoth investment support from developed countries. Developed countries must ramp up hard targets for climate finance over the coming years. Also, on the domestic front, financial regulators like RBI and SEBI need to create an enabling ecosystem for financing India’s transition to a green economy,” said Arunabha Ghosh, CEO, CEEW. It’s fairly clear now that any fresh climate ambition from India will now be dependent on how soon developed nations and private capital start meeting the country’s climate finance needs.