India can lead the world in sustainable growth
A quarter-century of growth has transformed the lives of millions of Indians and offered India its rightful place on the global stage. India, now the sixth-largest economy, is predicted to move up three places by 2030.
This rapid growth trajectory also places India at the heart of the most critical question of the environmental movement — can developing nations, which collectively generate the majority of global growth in the coming decade, reduce their carbon footprint while realising their economic potential?
India is currently among the top three nations in energy use, though way down the list on per capita basis. Its energy demand will grow the most on the planet over the next 20 years. Interestingly, it is not just economic growth driving this demand.
According to the International Energy Agency (IEA), the population of India is anticipated to grow by 270 million over the next two decades — resulting in an increased demand for carbon-intensive industries such as cement and steel to house the population. India is also vulnerable to the climate crisis, notably due to the melting of the Himalayan glaciers and changes in the monsoon pattern. For a country aiming to become a $5 trillion economy and beyond, it is imperative to move towards a low-carbon and regenerative economy.
In 2019, India ranked fourth globally in installed renewable power capacity, with solar and wind power leading the way. Prime Minister (PM) Narendra Modi has set a goal to generate 450 gigawatts of renewable energy by 2030 — this will represent five times the current capacity and amount to 60% of its total electricity generation from non-fossil fuel sources as against its Paris pledge to reach 40% by 2030.
Solar energy could be India’s salvation. With about 300 sunny days a year, India has the potential to lead the world in solar electricity, which will be less expensive than existing coal-fired power by 2030, even when paired with battery storage.
This will require the development of utility-scale renewable energy projects with innovative regulatory approaches that encourage pairing solar with other renewable technologies and storage to offer “round-the-clock” supply. The other would be attracting foreign investments in renewables.
PM Modi’s call for “high speed, large scale, concrete action” to combat the climate crisis at the recent summit, hosted by United States President Joe Biden, and his open invitation to global partners for building sustainable solutions reaffirm India’s interest in nurturing cross-border collaboration and innovation to accelerate climate action.
The choices made now and in the coming years by the Indian government and the people will affect the world. But the sustainable route won’t be easy or economical. The IEA report says transforming from today’s policy choices to a sustainable development scenario would require a transition on a scale no country has achieved in history. It would also require considerable innovation, strong partnerships, and vast amounts of capital.
India should be up to the challenge. The IEA report states that the nation’s fuel import bills are likely to triple in the next two decades under current policies. At the same time, India is seen emerging as the renewables and storage powerhouse and is one of the few countries on track to meet most of its Paris targets. If the country follows a more sustainable path of reducing emissions and increasing its share in non-fossil-based fuel for electricity generation, its import bills can be reduced substantially, offsetting the investments in renewables.
Of the world’s 2,000 largest public companies, at least one-fifth (21%) now have net-zero commitments, representing annual sales of nearly $14 trillion. Even in India, companies have stepped up their climate initiatives. According to the Standard Chartered SDG Investment Map, India alone offers a private investment opportunity of over $700 billion in clean energy. The private sector has a significant role in transforming the core of their business and delivery models and building collaborative partnerships that will support them in achieving sustainability goals and ensuring inclusive growth for all.
It’s becoming increasingly clear that we are in a period of transformation. It takes bold and decisive leadership to unlock the potential, widen the perspective, tune in to broader systemic needs, and ultimately build partnerships that help deliver for the greater good. India is blessed to have an extraordinary reservoir of business and public leadership talent committed to a cleaner and brighter future. The 2030 milestone offers a crucial plot of the sustainable development goals opportunities for private sector investors looking to invest for impact and improve the lives of millions of Indians in the coming decade.
India has shown the world how to lift millions of people out of poverty and provide a better quality of life. With its transition to clean energy, India can become the model for nations around the globe by creating a pathway to sustainable growth, rising prosperity, environmental justice and a clean energy future.
Osvald Bjelland is founder and president, Xynteo, a leadership advisory company. Sanjiv Mehta is chairman and managing director, Hindustan Unilever Limited
The views expressed are personal