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Experts argue that making the just energy transition a public concern is crucial to achieving the net zero emissions target by 2070 in India. They emphasize the need to significantly increase climate finance for this transition and integrate private finance into the Global Financial Architecture and the Green Climate Fund.
Asian countries, namely Japan, India and the United Arab Emirates, hold the G7, G20 and UNFCCC COP28 presidencies respectively this year, providing platforms to address climate change, energy transition and finance.
COP28, scheduled for November-December, will include the first Global Stocktake (GST) under the Paris Agreement. This milestone is expected to highlight the gap between climate action and commitments, driving GST reform forward. India has taken a leading role in advancing the financial institutions reform agenda and aspires to be a key player in the global energy transition.
Climate finance action
Climate think tank Climate Trends and the Observer Research Foundation recently hosted a webinar to discuss these possibilities.
During the opening address, Jayant Sinha, BJP MP from Hazaribagh, stressed the importance of climate finance action and establishing a new global financial architecture. He acknowledged that Hazaribagh, home to a 4,000 MW coal-fired power generation plant, poses challenges for a just transition as it plays an important role in India's fossil fuel economy.
Sinha added that to achieve net zero emissions by 2070, coal use must be phased out between 2045 and 2050, and this can only be achieved through climate finance.
He said, "India and the Global South are in dire need of climate finance action. As far as India is concerned, it will have to spend $50 to 100 billion more on climate financing immediately".
"Talking about the total capex capital, it would be $65 billion. If we have to decarbonize ourselves by the year 2070, money will have to come from the Global North. Along with money, more advanced technology will also be needed. The private sector needs to invest more and more. If we can get the right mix of investments, it will be easier to get the trillion dollars we need. If we can create a new global financial architecture, we will have access to a lot of climate finance from the Global North. We have to create such an environment that the flow of private sector finance can also be better. I think it will be discussed in Paris and COP28 as well" he added.
Global climate change concerns
RR Rashmi, Distinguished Fellow, The Energy and Resources Institute (TERI), stressed the need to reform the global finance architecture, saying "Bonn has exposed the flaws. The issue of finance will be an important point in future talks. The global financial architecture must be reformed, incorporating flows of private finance into the Global Financial Architecture and the Green Climate Fund. Availability of Financing is not the only concern; we must ensure that this financing is available at favorable rates, and that the government bears the climate risk to better manage it."
He further added that the equitable energy transition goes beyond financial flows. Rashmi stressed the need to establish a negotiating framework that allows for low-carbon development and prioritizes adaptation. She called for comprehensive funding for adaptation and suggested improving the Global Inventory (GST).
Regarding Prime Minister Narendra Modi's visit to the United States, Rashmi expressed her hope for positive results. However, he highlighted the uncertainty surrounding global climate change concerns. She believed that American-Indian relations would boost the technology, particularly if accompanied by venture funding.
Aarti Khosla, Director of Climate Trends, highlighted the importance of India's role in international climate discourse and policy. She stressed the need to close the gap between science and policy, attributing the lack of success in climate change action plans to this gap. Khosla also stressed the importance of establishing a financing mechanism for loss and damage.
Climate finance allocation
Vaibhav Chaturvedi, a member of the Energy, Environment and Water Council, emphasized the concept of a just energy transition.
He acknowledged that while many people support the idea, the challenge is defining what this transition entails. Chaturvedi argued that a just transition should not only be part of finance, but also incorporated as a national strategy and a concern of the people.
Dhruv Purkayastha, India Director of the Climate Policy Initiative, discussed the liability aspect of increasing climate finance, referring specifically to the operation of Special Drawing Rights (SDRs).
He suggested that unused SDRs in developing countries should be directed to countries at risk. Purkayastha stressed that the $100 billion currently allocated for climate finance is insufficient and that the Multilateral Development Banks (MDBs) are not being fully used.
Neha Kumar, India program manager of the Climate Bonds Initiative, argued that a just energy transition cannot be based solely on an equitable approach. She emphasized the significant opportunity associated with thematic debt capital. Kumar noted that emerging economies, especially India, have been able to raise approximately $30 billion for mitigation and adaptation over the past nine years.
Achieving netZero by 2070
He stressed that the yields of current projects are not attractive to private investors, and the government must address the associated problems to tap the market potential. Amit Bhatt, India Managing Director of the International Council for Clean Transport, said that the urgent need to decarbonise the transport sector to achieve NetZero by 2070. Converting all road transport vehicles to zero-emission vehicles by 2045 is crucial.
Girish Sethi, Senior Fellow at the Institute for Energy and Resources, discussed the challenges and opportunities of decarbonising the steel sector. India aims to produce 130 million tons of steel while pursuing decarbonization targets.
He added, India lacks internationally available advanced steel production technology, and the country's steel plants are heavily dependent on coal. In the cement and brick manufacturing sectors, India faces technological challenges despite its influence in these areas. For example, brick manufacturing based on renewable energy is not yet established globally.
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