IMF: India’s plans to curb emissions by 2030 on right path

The International Monetary Fund (IMF) has released a paper stating that India’s current plans might help it reach its emission goals by 2030. But, from 2031 onwards, there could be a rise in greenhouse gas emissions until 2040. The paper suggests more actions are needed, even though they might have some downsides.

India’s goal is to cut down its GDP’s emission intensity by 45% from what it was in 2005 by 2030. The paper looks at the effect of policies on five sectors that emit a lot - power, farming, manufacturing, transport, and homes - and the steps taken to lower emissions in these areas.

The paper reviews current policies that support the making and use of renewable energy. These include schemes like Production Linked Incentive (PLI), Renewable Purchase Obligations (RPOs), Perform Achieve and Trade (PAT), and a new policy for trading carbon.

The IMF paper stresses that India needs to do more to reach the goal of net-zero emissions by 2070, a promise made at the COP26 climate conference.

Even though India is the third biggest emitter of greenhouse gases globally, it has the lowest emissions per person among G20 countries. Because India’s modern economic growth started later than in advanced economies, it has contributed only about 3% to the total historical greenhouse gas emissions.

The paper notes that India’s plans for big growth in the next 20 years could move it from being a lower-middle-income country to a higher-middle-income one. With this expected rise in average incomes, the electricity demand is also expected to go up, driven by businesses and homes needing things like air conditioners and fridges.

India’s coal and industry increase emissions

India faces challenges in reducing greenhouse gas (GHG) emissions, with key sectors contributing to its carbon footprint. The electricity sector, relying heavily on coal, constitutes nearly 40% of total emissions. Coal contributes over 70% to electricity output. The industrial sector, encompassing metals, minerals, machines, rubber, and plastics, contributes around 22% to India's GHG emissions, with reported inefficiencies compared to similar sectors globally.

Agriculture contributes 14% to GHG emissions, primarily from livestock's enteric fermentation, methane from rice cultivation, and nitrous oxide from manure and residue burning. Despite a decline in cattle population since 2014, the sector remains a significant source of methane emissions, constituting about 74% of the country's total and impacting temperatures. Additionally, the agriculture sector consumes 20-25% of the country's electricity, mainly for irrigation on 40% of arable land.

India's transport sector, predominantly reliant on oil, contributes approximately 9% to the nation's GHG emissions. Road transport is the primary source, responsible for 90% of sectoral emissions.

The prevalence of smaller vehicles, especially two- and three-wheelers, helps lower the sector's emissions intensities. Despite a rise in electricity use in the transport sector, its overall share of final transport fuel consumption has decreased due to increased petrol and diesel consumption.

Homes use biofuels, increasing coal electricity

In the residential sector, contributing 4% to national GHG emissions, solid biofuels remain the primary fuel source. However, rising electricity consumption, driven by improved access, poses a dual challenge as electricity generation is predominantly coal-powered despite being a cleaner household fuel source.

India actively seeks to transfer low-carbon technology and share patents from developed nations, particularly in sectors like industry and energy efficiency. Additionally, the country looks for concessional international climate finance to support certain industries or segments facing financial challenges in adopting low-carbon technologies.

India's electricity demand is projected to rise from about 1500 TWh in 2020 to almost 5500 TWh in 2040. Current policies involve expanding renewable energy, nuclear, and hydropower sources to meet 44% of total electricity demand in 2040, with coal still contributing 49%, deviating from the net-zero emissions trajectory by 2070.

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