India at 1.4 tCO2/person in 2010 is one of the lowest emitters of greenhouse gases in the world. India’s emissions were less than one third of the world average of 4.5 tCO2/person, less than one twelfth that of the US. Yet, India is highly vulnerable to climate change, and has a deep interest in an equitable global agreement and took a leading role at the Conference of Parties in Paris.
To reduce emissions we can reduce energy use or use renewable sources. Energy efficiency is a major resource. While investments are required, it is economically attractive and pays for itself. Even with the emphasis on efficiency India must increase its energy supply. India’s target to set up 175 GW of renewable capacity by 2022 is a huge step forward. For India, the potential of renewables is vast; yet, coal will remain an important part of its energy needs.
But the capabilities of renewable energy in addressing the world’s needs are still limited. The non-availability of low-cost finance for renewable energy projects and the absence of a domestic manufacturing base impact the sector’s growth in India. To replace a one KW coal-based plant, which can generate 7,000 units/year, we need to invest in 4 KW of solar capacity as 1 KW of solar can generate only 1,600 units/year. Thus the upfront investment would be 6 to 8 times as large.
Herein lies the dilemma for India — investing in renewables means less investments for other sectors like health, education and infrastructure. India has used several instruments to promote renewable power. The Accelerated Depreciation scheme for wind power, for example, provides subsidies to set up wind-generated power plants.
Another is reverse bidding for feed-in-tariff for solar energy. This system invites bids from generators to set a price at which they can supply renewable electricity. Another instrument is Renewable Purchase Obligation (RPO), which requires a distributor to procure a prescribed fraction of electricity from renewable power either by generating it or by buying it to make up for shortfalls.
These instruments promote the growth of renewable energy. India will need to adopt a multi-pronged approach spanning sectors to combat climate change. Energy efficiency is a low hanging fruit and must have the highest priority. For sustainability, initiatives must be in place to make solar technology cost competitive with coal. India’s rain water harvesting programme and watershed development can have positive outcomes for agriculture.
The development of cellulosic ethanol — a biofuel derived from wood, grasses, or the inedible parts of plants — can increase India’s energy independence. India must mobilise private investment in technologies that support sustainable transport infrastructure to increase usage of public transport and reduce use of petroleum products.
Another would be to put in place an effectively calibrated RPO standard that will incentivise the private sector to make investments. What is also necessary is investment in research and knowledge sharing. There must be an institutional set-up for low-carbon or renewable technology with intellectual property rights shared as global public goods. Going forward, global collaboration will be the lynchpin for an effective and fair way to deal with climate change.
Kirit Parikh is chairman, Integrated Research and Action for Development and former member, Planning Commission
The views expressed are personal