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India Between Solar Energy and Coal: From a “Green Image” to a “Green Façade”?

India Between Solar Energy and Coal: From a “Green Image” to a “Green Façade”?
 Christophe Jaffrelot
Senior Fellow - India, Democracy and Populism
 Hemal Thakker
Student of International Relations and Environmental Studies, Sciences Po

At the 2009 Copenhagen summit, India was part of a coalition of countries - along with the US and a few so-called "emerging economies" - which was not as interested as Europe in taking climate change seriously. Nonetheless, at the COP21 in 2015, it played a very constructive role alongside Europe and others. Prime Minister Modi and former President Hollande on this occasion initiated a Solar Alliance that was intended to help poor countries invest in renewable energy. Since then, New Delhi has been praised for its green image. Western as well as Indian observers have considered Narendra Modi as "a potential global climate leader that is capable of setting the agenda on climate-related issues, as evidenced by his proclamations in the run-up to the 2015 Paris Summit, even while reminding the developed countries that ‘treating the nature well comes naturally for Indians’…".

Through its first Intended Nationally Determined Contributions (INDCs), India is supposed to reduce its carbon footprint by 33 to 35% from 2005 levels by 2030. In Paris, it also pledged to include an electric power capacity target of 40% installed from renewable energy resources, and it committed to creating a carbon sink of 2.5 to 3 billion tons of CO2 equivalent through additional forest and tree cover. Yet, the country is currently the third biggest CO2 emitter, behind China and the United States. Doubts about India’s climate commitment were also reinforced when, during a G20 meeting in July 2021, New Delhi rejected the G7 objective on net-zero emissions by 2050. It also recently missed a key meeting aimed at preparing for the COP26 in London. A couple of days away from the beginning of the COP26, more than 100 countries have pledged to reach carbon neutrality by the middle of the century. This includes China, which has committed to go carbon neutral by 2060. India, on the other hand, has not announced a net-zero target. While New Delhi has heavily invested in renewable energy in recent years, it does not appear to have any long term plan aimed at drastically reducing its emissions, as is currently evidenced by its heavy reliance on coal. 

Investing in renewable energy… 

India has made a name for itself globally in relation to its massive investments in solar energy. In August 2021, the Ministry of New and Renewable Energy (MNRE) announced that the country had achieved the milestone of installing 100 gigawatts (GW) of renewable energy capacity. About 78% of the 100 GW is derived from large-scale wind and solar power projects. According to the Climate Action Tracker, "installed capacity of renewables has increased to 98.8 GW in July 2021, up from 39 GW in 2015. This includes 41 GW of solar and 39 GW of wind energy, with net capacity additions of 12.4 GW of solar and 3.2 GW of onshore wind between 2019 and 2021".

India is on track to accomplishing only 65 to 69% of its planned renewable target of 175 GW installation by 2022. 

While this represents a significant milestone, India is on track to accomplishing only 65 to 69% of its planned renewable target of 175 GW installation by 2022. This comes in spite of Modi’s reiteration at the United Nations of India’s commitment to achieve 450 GW of renewable energy capacity by 2030. These elements are outlined in India’s updated Intended Nationally Determined Contributions (INDCs) for the COP26.

What’s more, even if India did meet these objectives, its current policies and actions are only in line with a limitation of global temperatures under the 2°C mark, which stands above the Paris agreement’s 1.5°C goal. According to European observers in charge of climate negotiations with India, this is largely a result of the country’s lack of a long-term plan to decarbonize its economy, partly due to the crucial importance that economic growth bears on the national agenda, and even if that growth comes at the expense of the environment.

This is evident from some of the contradictions that still characterize India’s policies towards renewable energies. Some efforts could easily be ramped up today, as is the case for rooftop solar installations, an area that has not been exploited to its full potential at the national level. In the transport sector, the Niti Aayog (the successor of the Planning Commission of India) estimates that about 1.7 billion tons of CO2 could be avoided if India adopted greener policies. For instance, India already set a target of a 30% share of electric vehicles (EV) in new sales for 2030. Yet, according to the Climate Action Tracker, the share of EV sales (including two and three wheelers) at the national level would need to stand between 80 and 95% by 2030, and 100% by 2040, for it to be compatible with the Paris Agreement.

… but even more in fossil energy

While in the past seven years India has invested ₹5.2 trillion ($70 billion) in renewable energy, investments in the fossil fuel industry still accounted for up to ₹245 trillion ($3.3 trillion) despite a 4% drop between 2015 and 2019. 

Coal directly benefits from these investments. Its production is expected to increase to one billion ton by 2024, from current levels of 716 million tons in the 2020-2021 fiscal year (which begins on April 1st and ends on March 31st). According to the Central Electricity Authority, coal capacity is projected to increase from 202 GW in 2021 to 266 GW by 2029 and 2030. India is home to the second largest coal-fired power plant pipeline in the world. Its coal production is increasing and is on track to reach a record high 700 million ton in 2020 and 2021. Furthermore, in June 2020 and for the first time ever, the government launched an auction for the private sector with 41 coal mining blocks. This should further intensify the pressure on India’s ecologically fragile forests, as most of its coal mines are located in jungle territory.

In spite of the important environmental consequences of these investments, the Indian government is not disincentivizing them, quite the contrary. Coal subsidies still stand 35% higher than renewable subsidies, and coal-fired power generation receives indirect financial support from the government through an exemption from income tax and land acquisition at a preferential rate.

Currently, India’s reliance on coal is the main reason for the country’s refusal to seriously envision decarbonization.

Currently, India’s reliance on coal is the main reason for the country’s refusal to seriously envision decarbonization. When rating India’s targets based on modelled domestic pathways, the think tank Climate Action Tracker labels India’s performance as "highly insufficient". That is quite simply because coal still represents 70% of the country’s energy supply. According to a BP study, in 2040, coal will still represent 48% of the primary energy consumption of commercial fuels in India, while renewable energy will account for only 16%. Granted that the growth rate of the economy remains the same, this means that the country’s CO2 emissions will have doubled to 5Gt by 2040. At that point, India’s share of global emissions will have increased from 7% today to 14%. Other studies even suggest that the doubling could occur prior to 2040, or even 2030

In the face of these accusations, the Indian government bases its argument on four points. First, that Western countries are historically responsible for climate change. Secondly, that India’s per capita CO2 emissions remain very low. Thirdly, that growth is the country’s top priority. And finally, that the more economically developed countries are not spending the $100 billion they committed to at the 2009 Copenhagen summit, to help less developed countries advance coherent decarbonization strategies (only $80 billion were allocated to these goals last year). All this is true, but so is the fact that India’s energy transition would work in the country’s national interest. Should the Modi government refuse to engage in this process, short-term economic growth will not be sustainable and human security will ultimately risk being at stake, as dozens of millions of villagers and fishermen will be forced to relocate around the country.



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