World Economic Forum in collaboration with Kearney and Observer Research Foundation
India is at the cusp of two significant transformations. The first is its economic transformation. India will soon be the most populous country in the world – and will be home to one of the youngest populations in the world. The country is also home to a large population that lives below the poverty line. A rapid and equitable economic growth will be critical to meet the growth and lifestyle aspirations of 1.4 billion people. The manufacturing sector will need to grow to supplement the impressive services sector economy and cater to the large population living off the agrarian economy.
The second is its green transformation. India’s per capita energy use today is lower than most nations, its use of materials such as iron is still modest, and its manufacturing sector is still relatively under-developed. Unlike developed nations with mature greenhouse gas (GHG) infrastructure, India is yet to build a lot of its GHG inventory. However, as India grows, so will its GHG footprint. While India’s growth will need to factor in higher consumption levels across its population, it has a unique opportunity to leapfrog this journey through low/no emissions technologies.
In this paper, we build the case for why India’s green transformation is an attractive, vital and mandatory component of its overall economic transformation. A Green New Deal for India will necessarily implicate the five sectors that contribute to almost all its GHG emissions:
Pillar 1 – Energy: The energy sector accounts for ~40% of India’s GHG emissions, with coal being the dominant source of total fossil CO2 emissions. Decarbonizing the energy sector is a foundational priority for India’s energy sector and will require a three-pronged approach: replace fossil fuels with renewables; reduce fossil CO2 emissions from legacy infrastructure through enhanced efficiencies; and remove unavoidable carbon emissions through carbon sequestration.
Pillar 2 – Mobility: The mobility sector is heavily reliant on oil and contributes to almost half of India’s oil demand. A green transformation of mobility will need a shift in modal mix from road to rail, as well as a broad-based fuel diversification approach to encourage sustainable fuels (biofuels, CNG, LNG) in the immediate term, electrification in the medium term and hydrogen-based heavy mobility in the long term.
Pillar 3 – Industry: Manufacturing is a key contributor to India’s GHG emissions, with the iron and steel, cement, and chemicals and fertilizers sectors having the highest CO2 footprint. A radical decarbonization of these sectors will need demand-management measures such as circular economy acceleration; continued energy-efficiency improvements; electrification of heat; carbon capture, utilization and storage; low-carbon fuels such as biomass and hydrogen; and innovative technologies with non-fossil feedstock.
Pillar 4 – Green Buildings, Infrastructure and Cities: India’s top 25 cities contribute more than 15% of its estimated GHG emissions. India’s transition to greener cities, buildings and infrastructure will need a rethink of its approach to urban planning with a focus on transit-oriented urban development and an emphasis on low-carbon buildings and infrastructure construction.
Pillar 5 – Agriculture: The agriculture sector is the largest contributor to nitrous oxide (N2O) and methane emissions. To reduce agriculture emissions, India will need a national campaign to empower, educate and enable more than 100 million farmers in adopting precision agriculture, sustainable animal husbandry and green energy.
In addition to the five sectoral pillars, India will need four cross-sectoral enablers for its green transition. These include an accelerated approach to green technology innovation, an overarching framework to catalyse green finance, an integrated approach to carbon, capture, utilization and storage, and a plan for climate adaptation.
Across the five pillars and the four enablers, we estimate that a Green New Deal for India could represent upwards of a $15 trillion economic opportunity by 2070, with the potential to create more than 50 million net new jobs. With concerted action, $1 trillion of this opportunity could potentially materialize within this decade.
In this context, we argue that it is now time for a Green New Deal for India. The government, the private sector, investors, civil society organizations and individual citizens need to step forward and accelerate the Next Green Revolution.
Since the Paris Agreement on climate change in 2015 there have been major changes to the context surrounding the global effort to combat climate change. Across the world, efforts towards “green new deals” have intensified — policy packages that combine measures towards decarbonization and adaptation with those that would increase livelihoods and create wealth.
In other words, there is a new expectation that the green transition will not be a drag on economic prosperity, but indeed the engine for an economic transformation that will increase inclusion and growth. Much of this updated ambition for the future is based not on changes in the political discourse but on technological and financial innovation that make the Paris promises seem relatively unambitious.
India’s commitment at Paris represented a significant shift in its traditional approach to global climate negotiations; it reflected a new optimism about the country’s growth path and its place in the world. Political leaders at both state and central levels have, since then, decided that investment in the green transition could create economic growth momentum that has been missing for some years.
This white paper will lay out a framework for creating green growth momentum in India. There are two horizons we have in mind: the short to medium term, to 2030; and the longer term, to 2070. We believe that if the drivers and enablers of growth we outline in this paper are kept in mind, India can leverage green growth to add $1 trillion to GDP by 2030 – and a massive $15 trillion by 2070.
Read the full report here.
This White Paper was first published on 8 November 2021, in Mission 2070: A Green New Deal for a Net Zero India | World Economic Forum (weforum.org)