What India Could do Now to Make Progress Against Climate Change? : Daily Current Affairs

Date: 09/09/2022

Relevance: GS-3: Conservation, environmental pollution and degradation, environmental impact assessment Disaster and disaster management.

Key Phrases: Phasing Out of Coal Capacity, Multilateral Development Banks, Phasing Out of Diesel Locomotives, State Level Climate Action Plans, Expansion of EV- Charging Networks, Setting Up Minimum Energy Efficiency Standards

Why in News?

Climate change is truly a global problem in the sense that no country alone can influence the outcome and thus, all countries need to mount a global response.

What should be India’s strategy for managing climate change:

The major targets for managing climate change were announced by India at CoP-26 at the Glasgow summit which include:
1. a long-term commitment to reach net zero by 2070;
2. a shorter-term objective of reducing the emission's intensity of GDP by 45% over our 2005 level, by 2030;
3. raising India’s non-fossil fuel-based electricity generation capacity (mainly solar and wind) to 50% of the total by 2030.
The target of taking renewable electricity (RE) capacity to 450GW by 2030 is a critical supply-side element of India's strategy and many steps are needed to be taken to realize it.
The success in these targets demands interventions in many areas, with different ministries of the Centre working in tandem with each other.
Coordination will also be necessary across different levels of government (Centre, states, and cities) and also with the private sector, which plays a major role.
A 10-year program detailing what we intend to do in each major sector needs to be focused on which would help increase public consciousness and generate a public debate on aspects of the strategy. These details will serve as domestic targets to monitor closely and ensure we are on track to achieve our goals.

Specific targets that can be set for the first 10 years:

Phasing out of coal capacity: Achieving net zero emissions implies the elimination of unabated coal-based power plants not having carbon capture and storage facilities before 2070. For this, peak coal use target can be specified perhaps around 2030.
A date can also be set for peak economy-wide CO2 emissions, sometime in the 2030s.
Mobilization of financing from multilateral development banks(MDB): The poor financial health of power distribution companies (discoms) discourages private investment in expanding RE capacity since it poses payment risks. MDB involvement might reassure states, which could be encouraged to set targets for privatizing parts of the distribution system.
Collaboration between central and state regulators: RE is an intermittent source of power, and increasing its share in total electricity supply will require innovative electricity regulation and grid management practices. Central and state regulators have to collaborate closely. Regulatory changes aimed at improving grid flexibility should be a top priority in the first 10 years, which would encourage expansion of RE later.
Green Hydrogen: Growth of green hydrogen could be supported by setting offtake targets for major industries that can shift to it.
Phasing out of diesel locomotives: The Indian Railways with its net zero target of 2030 would require the entire traction to be electric
Expansion of EV- charging networks: Separate target/s should be set for increasing the share of EVs in new auto sales of 2-,3- and 4-wheelers, and also for expanding EV-charging networks. Here a date can be set after which the sale of new internal-combustion-engine vehicles is banned.
Setting up minimum energy efficiency standards: Our minimum energy efficiency standards for popular household appliances should be reviewed and higher standards need to be set periodically.
State level Climate action plans: State governments should be encouraged to prepare climate action plans for cities and rural areas. These must have targets for expanding public transport networks, water harvesting facilities, etc.
Carbon tax: Cap-and-trade systems are a substitute for carbon taxation and the Energy Conservation Bill 2022 makes a provision for introducing such systems. The 10-year plan can involve studying the pros and cons of the two systems. There is a strong case for introducing a carbon tax, encouraging switching over to renewables.
Afforestation: Progress towards the Paris target of afforestation needs to be ensured as it helps not only in mitigating climate change by sequestering carbon, but it also helps in adaptation by supporting water conservation.

Do you know?

Difference between Cap-and-trade systems and carbon taxation:

A carbon tax sets the price of carbon dioxide emissions and allows the market to determine the quantity of emission reductions.
Cap-and-trade sets the quantity of emissions reductions and lets the market determine the price.

Which of the two is better?

Cap-and-trade sets the allowable quantity of emissions, which can then be used to estimate the decline in the rise of global temperature and the resulting benefits.
It is not known in advance the effect that any particular carbon tax level will have on emissions and therefore on estimated benefits.
Both cap-and-trade and a carbon tax are subject to uncertainty about costs.
However, cap-and-trade has the advantage of making clear, through a market price for emissions, the actual cost of a stipulated quantity of emissions reductions.
Furthermore, the market price for CO2 allowances under cap-and-trade automatically and continuously adjusts for changes in abatement cost over time as changes take place in the prices of fossil fuels, the demand for electricity, and the rate of technological change.
Frequent changes in a carbon tax to adjust the tax level to the changing cost of abatement are likely to be administratively difficult and politically divisive.

How to finance the transition to a carbon-neutral economy?

Financing is a major issue because de-carbonization commitments made at CoP-26 involve massive investments in the energy and related sectors.
Estimates of the amount needed for developing countries excluding China come close to 4% of GDP, or almost $1 trillion per year by 2025.
There is no prospect of resources on that scale being available from external sources.
Developing countries will have to accept that a large portion of this amount, say 45%, would have to be mobilized domestically.
This would reduce the international contribution to $550 billion which is to be a combination of public and private flow.
Public flows can be used to leverage private flows through creative forms of blended finance and risk mitigation.
The problem is that even this reduced amount of public flows is five times the level expected under BAU (Business-As -Usual)

Conclusion:

The G7 countries still seem willing to consider funding on this scale.
The upcoming G20 Summit under the Indonesian presidency will provide some indication on this issue.
The G20 presidency will then pass on to India in 2023, followed by Brazil and South Africa.
It will be a test of developing countries’ global economic diplomacy to see if progress can be made over the next three years.
Whatever the outcome on financing, a roadmap for the transition with an associated investment cost should be laid out by all the developing countries.

Source: ORF-Online

Mains Question:

Q. Climate change is a global problem in the sense that no country alone can influence the outcome and thus, all countries need to mount a global response. In this context, what should be India’s strategy for managing climate change? (250 words).