Date : 03/11/2023

Relevance: GS Paper 3 – Environment and Ecology

Keywords: CHGs, Macroeconomy, IEA, EVs

Context-

India, the world's third-largest emitter of greenhouse gasses (GHGs), released 3.9 billion metric tons of carbon dioxide equivalent in 2021, contributing 7 percent to global emissions. Amidst escalating climate concerns, investments in climate technology are crucial for transformative solutions.

I. Climate Challenges in India:

India faces significant challenges due to major GHG emissions from coal combustion (50 percent) and agriculture (approximately 50 percent). The need to address these emissions is amplified by the demand for sustainable economic growth.

Climate Change and Its Far-reaching Impact on India’s Macroeconomy

Climate change poses a significant threat to India's economy, affecting both the supply and demand sides of the macroeconomy. This global phenomenon disrupts various sectors, leading to adverse consequences on agriculture, fisheries, public health, infrastructure, industrial output, energy demands, and financial services.

1. Impacts on Agriculture and Livelihood:

Climate change disrupts crop cycles, leading to low agricultural yields due to altered temperature, precipitation patterns, and extreme weather events. This directly impacts the rural economy, pushing inflation in urban areas. The fisheries sector faces challenges as rising sea temperatures alter fish distribution, impacting fishermen's livelihoods.

2. Health Costs and Human Impact:

Climate change increases the incidence of diseases, affecting vulnerable groups and straining public health resources. Between 2030 and 2050, climate change is expected to cause approximately 2,50,000 additional deaths annually due to various climate-related factors, according to WHO.

3. Infrastructure Damage and Economic Disruptions:

Physical infrastructure like roads, bridges, and power plants suffer due to climate-related events, disrupting economic activities. Damaged infrastructure leads to increased maintenance costs and economic losses. For instance, India incurred significant economic damage due to floods, accounting for 10% of global losses in the past decade.

4. Industrial Output and Energy Demands:

Climate change raises operational costs and reduces profits in industries, contributing to job losses. Additionally, increased temperatures drive up energy usage, intensifying the energy crisis in India, as highlighted by the International Energy Agency (IEA).

5. Industrial Output and Energy Demands:

Climate change raises operational costs and reduces profits in industries, contributing to job losses. Additionally, increased temperatures drive up energy usage, intensifying the energy crisis in India, as highlighted by the International Energy Agency (IEA).

6. Financial Services Under Pressure:

Financial services face challenges due to increased credit risk caused by climate-related events, impacting borrowers' ability to repay loans. This situation leads to potential loan defaults and credit losses. Furthermore, climate change disrupts insurance claims and travel and hospitality services, affecting businesses' profitability.

Transformative Climate Solutions:

• Disruptive Climate Technologies: Key opportunities lie in disruptive technologies that replace carbon-heavy industrial processes. Electric vehicles (EVs) have proven impactful, emitting less than 50 percent of GHGs compared to fossil fuel-powered vehicles, especially when coupled with renewable energy sources. Innovations in agriculture, such as methane conversion and cultivated meat production, significantly reduce emissions.
• Digital Technologies: Digital platforms optimizing supply chains, reducing wastage, and ensuring transparent access to sustainable products are paramount. For instance, digital solutions in agriculture minimize wastage and reduce GHGs. These technologies promote technology-driven sustainability.
• Data Collection and Analysis: Accurate measurement of carbon emissions is vital. Remote sensing technology empowers farmers and organizations to comprehend their environmental impact. Integration of software- and hardware-led methodologies enhances environmental data tracking, vital for compliance with reporting requirements.

Adaptation and Resilience Strategies:

• Parametric Insurance Solutions: Innovative parametric insurance against climate-related damages offers protection to vulnerable communities. This approach ensures financial security amidst unpredictable climatic conditions, fostering resilience.
• Technological Innovations: Intelligent platforms, utilizing genomic and phenotypic data, create climate-resistant seed varieties. This innovation accelerates seed development, a critical aspect of agricultural adaptation.

Recommendations for Stakeholders:

- India faces a unique challenge, balancing rapid growth with increasing carbon emissions.
- Achieving sustainable and greener growth requires active participation from all stakeholders in the ecosystem.
- Government involvement is crucial, necessitating the development of favorable policies, R&D funding, grants, and stringent regulations to reduce GHG emissions.
- Industries should be incentivized to embrace climate-positive opportunities by adopting green solutions and collaborating with startups for technology transfer and scalability.
- Startups play a pivotal role and should be encouraged to create India-specific climate solutions that can be replicated in other emerging markets.

India's Strategic Initiatives in Combating Climate Change

• Panchamrit:

India has outlined a comprehensive approach to climate action, encapsulated in its "Panchamrit" strategy, comprising five key elements:

1. Achieving 500 GW Non-fossil Energy Capacity by 2030: India aims to significantly expand its non-fossil energy sources, promoting sustainable energy generation and consumption.
2. 50% Renewable Energy Usage by 2030: India targets meeting half of its energy needs through renewable sources, fostering a shift away from fossil fuels.
3. Cutting Carbon Emissions by 1 Billion Tonnes by 2030: India is committed to reducing its total projected carbon emissions, contributing substantially to global efforts in mitigating climate change.
4. Reducing Carbon Intensity by 45% by 2030: India plans to decrease the carbon intensity of its economy by 45% from 2005 levels, promoting energy efficiency and green technologies.
5. Achieving Net Zero Emissions by 2070: India aims to balance its greenhouse gas emissions with removals, ensuring a net-zero emission status by 2070, aligning with global climate targets.
• National Action Plan on Climate Change:

India's National Action Plan on Climate Change focuses on raising awareness among diverse stakeholders, including government agencies, scientists, industries, and communities. It emphasizes the imminent threat posed by climate change and advocates measures to combat it. This proactive approach underscores India's commitment to addressing climate challenges through education, collaboration, and sustainable practices.

Conclusion

India stands at a pivotal moment, balancing economic growth with carbon emissions reduction. Investments in transformative climate solutions not only mitigate climate change but also foster innovation, ensuring a harmonious coexistence of progress and planet. As India charts its sustainable future, these comprehensive, people-centric strategies pave the way for a greener tomorrow.

Source: Indian Express